• This is a rush transcript from "The Journal Editorial Report," October 31, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," it's back: The House and Senate both roll out health care plans with a public option, as dissident doctors make plans of their own. Is a revolt brewing against the Democrat's friends at AMA?

    And the spin is already starting. So just how nervous is the White House about Tuesday's governor's elections.

    Plus, as college costs continue to soar, is a three-year degree the answer?

    Welcome to the "Journal Editorial Report," I'm Paul Gigot.

    The public option came back this week with a vengeance, with both Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi unveiling plans that include some form of a government-run health insurance program. It's a sore spot for many physicians, who argue that the government's involvement diminishes the quality of care they can give their patients.

    The American Medical Association irked many of its members earlier this year by endorsing a plan by House Democrats that included a public option. And next weekend, a dissident group of doctors plans to try to force the AMA to drop its support for the health care overhaul. They're introducing a resolution at the AMA's semi-annual meeting that calls the legislation crafted so far, quote, "anathema to doctors and patients."

    Dr. Donald Palmisano was the president of the AMA from 2003 to 2004. He's a spokesman now for the Coalition to Protect Patients' Rights, a group of more than 10,000 physicians.

    Dr. Palmisano, welcome, thanks for being here.


    GIGOT: Now you've got the House and Senate bills introduced this week. Should they pass?

    PALMISANO: No, they should not pass in their present form. Physicians, certainly the physicians that I work with, want to see health system reform. They want to put the patient in control, the right to buy across state lines, the right to own insurance.

    GIGOT: Buy insurance across state lines, yeah.

    PALMISANO: They don't want more government involvement. In fact, the AMA policy — I'm not speaking for the AMA, but I was there for many years when the policy was passed. It says that there will be no further government involvement in the practice of medicine. and the goal is for people to own their own policy. The goal is for people to get tax credits and for people to be the decision maker with the physician as trusted advisor. These bills do not do that. They increase taxes in the long run and they decrease availability of care for patients.

    GIGOT: I want to get to the AMA later, but this public option idea is really — is described by the people who are for it as Medicare for all or Medicaid for all. Why do some doctors have a problem with Medicare? It gets down to the question of reimbursements, does it not, for charging less, paying less, than the actual service costs?

    PALMISANO: Yes. Well, first off, governments should not be in the business of price fixing. Whenever you have price fixing, what you get from recorded history is decreased availability of the product or the service.

    GIGOT: That's the way Medicare works.

    PALMISANO: Yes, that's the way Medicare works. But it wasn't that way in the beginning, in 1965. I make that point in my book on leadership. In 1801 — section 1801 says no federal interference in the practice of medicine. And then later, the government said, oh, well, that's where we started, but we soon have to change. So physicians don't have a lot of confidence that what passes in these giant bills will be followed. In fact, they're concerned that some things will be followed that will destroy liberty. and the second thing is that the things that look goodwill be removed from the bill later.

    GIGOT: So you don't think — you think that if this passes, those price controls that are now part of Medicare will spread throughout the insurance system and the practice of medicine. Do you think that is going to actually affect the quality of care?

    PALMISANO: Absolutely. It doesn't matter if you have insurance, if you can't find a doctor in your hour of need. Everybody can have a Medicaid card. What good is it if there's no longer a neurosurgeon in your community? What do you do if you have a patient with a Medicaid card, and a physician that treats Medicaid patients, but can no longer stay in practice because the cost of delivering the service is more than the money received? So you lose those individuals and you end up with long lines and rationing.