Although they are illegal, physician cartels already exist. Numerous cases settled by the FTC and the Justice Department show that these cartels typically involve a large percentage of doctors in a particular area and that they win fee increases of as much as 30% - 40%.

Nevertheless, when CBO estimated the cost of H.R. 1304, it assumed that only one-third of all doctors would join cartels and that they would collect only 15% more in fees than they otherwise would. Even using these unrealistically low assumptions and assuming that the bill would sunset after three years, CBO estimated that the bill would increase direct federal spending on health care by more than $2.6 billion over 10 years. This windfall for physicians, if spent directly on additional medical services over the same 10-year period, could purchase:

• over 450,000 days of treatment in a neonatal intensive care unit;
• more than 35 million mammograms;
• over 19 million units of blood;
• more than 14 million colonoscopies; or
• more than 56 million PSA prostate cancer tests.

Programs serving poor people will be hardest hit by H.R. 1304. CBO estimates that the higher fees collected by physicians will cost the Medicaid and S-CHIP programs more than $2.4 billion over the 10-year period. This same $2.4 billion, if spent directly on providing coverage to children during this period, would provide health insurance coverage to 140,000 children every year over the same 10-year period.