Category: Physician Income

What Are Physicians Willing To Give Up To Achieve Universal Healthcare?

One of the things that has troubled me for more than a decade is the way the medical profession declares that we favor an equitable distribution of healthcare resources and yet do little or nothing about it.  In 2002, the Physician Charter on Medical Professionalism in The New Millennium was published.  I will not bore you with the details here, but 2 provisions are important.  Commitment to improving access to care and commitment to adjust distribution of finite resources are clearly stated.  Physicians are exhorted to “individually and collectively strive to reduce barriers to equitable healthcare” and to be public advocates “without concern for the self-interest of the physician or the profession.”

This charter was signed by essentially every medical society and specialty organization that you can think of.  From the American Medical Association to the American Academy of Orthopaedic Surgeons and the American College of Radiology and on and on.  And yet, apart from lip service supporting improved access to health care, we have seen essentially no action. (I will be happy to entertain examples of such action in the comment section.)

We have theoretically signed on to the principles of universal healthcare and yet we have also been adamant in opposing and successful in preventing universal healthcare adoption. As a physician, I can find many malefactors for the lack of progression to universal healthcare in America. I don’t need to name them. You know who they are. And they will fight change with a white-hot intensity. As physicians, we can, and do, say “Why should we offer up anything when nobody else is willing to?” Maybe that is fair, but then why have the Charter? Why sign on to the Charter?

I can come up with many reasons why the medical profession has failed America in this area, but I have concluded that most important is that if we are forced to have a real conversation about universal healthcare, we will be asked to give something up and we are not prepared to do that. But until the medical profession steps up, is there really any hope? 

The transition to universal healthcare will involve some pain to all of us in the healthcare industry.  (Well, most of us anyway.  I expect nurses, respiratory therapists, and many other categories of healthcare workers to deservedly make out a bit better, at least!)  The question will be about how the pain will be divided.  This terrifies physicians.  It especially terrifies the highest-paid physicians.  It also causes angst among the lowest paid physicians and medical students.  Uncertainty is deadly to health care reform.

Consequently, I have been trying to figure out a way to have a conversation about this that makes sense and is fair to everybody.  As an aside, I have been telling my generational colleagues, this is not about us.  If we made sweeping changes legislatively tomorrow, most of us would be retired or at least close enough to it for any significant economic damage to happen to us.

While on my journey in cognitive science, I came across the philosophy of John Rawls.  Rawls was famous for his Theory of Justice, published in 1971.  At its heart is this: “A just society is a society that if you knew everything about it, you’d be willing to enter it in a random place.”  Rawls proposes the thought experiment in which we place ourselves behind a Veil of Ignorance, not knowing our position in society, and then construct the society.

Rawls was one of the most influential philosophers of the 20th century and it is horribly reductionist of me to sum his work up in a few sentences, but for our purposes this will suffice.  Imagine creating a physician reimbursement system and medical school tuition scheme not knowing whether you will be entering it as a radiologist, pediatrician, hospital or health plan administrator, orthopedic surgeon, or a medical student.  You do not know if you will be entering at the beginning of your career or at the end of your career.  How would you design the system?  How much would medical school tuition be?  At Georgetown?  At Wright State?  How much would a neurosurgeon make?  How much would a psychiatrist make?  What would be just?  What would be fair?

I propose Rawls’ construct is a strong starting point.  I can fairly confidently predict that many, if not most physicians will reject out of hand even contemplating this idea.  Fear and uncertainty are potent emotions against change, or even contemplating change.  But I think we can find a core of willing participants, and we can make an amazing experiment happen.  We can bring these people together and have this conversation.  Even if the result is just a conversation, it is a beginning.  It is the beginning of a discussion of what we as physicians expect from our profession and what we expect from ourselves as professionals. Are we to “individually and collectively strive to reduce barriers to equitable healthcare” and to be public advocates “without concern for the self-interest of the physician or the profession?”  Or are we to just continue to pay lip service to these ideals?

This discussion dovetails with a TED talk by Dan Ariely called How Equal Do We Want To Be? You’d be surprised. He explores economic inequality and what we think we know about economic inequality, the reality of income inequality and finally what we would ideally like income inequality to be. Please follow the link to the next portion of this writing…

Medicine’s Top Earners Are Not the M.D.s – NYTimes.com

THOUGH the recent release of Medicare’s physician payments cast a spotlight on the millions of dollars paid to some specialists, there is a startling secret behind America’s health care hierarchy: Physicians, the most highly trained members in the industry’s work force, are on average right in the middle of the compensation pack.
That is because the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine.
The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.

And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation. In a deal that is not unusual in the industry, Mark T. Bertolini, the chief executive of Aetna, earned a salary of about $977,000 in 2012 but a total compensation package of over $36 million, the bulk of it from stocks vested and options he exercised that year. Likewise, Ronald J. Del Mauro, a former president of Barnabas Health, a midsize health system in New Jersey, earned a salary of just $28,000 in 2012, the year he retired, but total compensation of $21.7 million.
The proliferation of high earners in the medical business and administration ranks adds to the United States’ $2.7 trillion health care bill and stands in stark contrast with other developed countries, where top-ranked hospitals have only skeleton administrative staffs and where health care workers are generally paid less. And many experts say it’s bad value for health care dollars.

Medicine’s Top Earners Are Not the M.D.s – NYTimes.com

Doctors Abusing Medicare Face Fines and Expulsion – NYTimes.com

 

WASHINGTON — The Obama administration is cracking down on doctors who repeatedly overcharge Medicare patients, and for the first time in more than 30 years the government may disclose how much is paid to individual doctors treating Medicare patients.

Marilyn B. Tavenner, the administrator of the Centers for Medicare and Medicaid Services, said that “recalcitrant providers” would face civil fines and could be expelled from Medicare and other federal health programs.

In a directive that took effect on Jan. 15 but received little attention, Ms. Tavenner indicated that the agency was losing patience with habitual offenders. She ordered new steps to identify and punish such doctors.

A recalcitrant provider is defined as one who is “abusing the program and not changing inappropriate behavior even after extensive education to address these behaviors.” Cases will be referred to Daniel R. Levinson, the inspector general at the Department of Health and Human Services, who has authority to impose civil fines and exclude doctors from Medicare, Medicaid and other programs. 

Federal officials estimate that 10 percent of payments in the traditional fee-for-service Medicare program are improper. That would suggest at least $6 billion a year in improper payments under Medicare’s physician fee schedule. But Malcolm K. Sparrow, a Harvard professor and an expert on health care fraud, has said the losses could be greater because the official statistics “fail to accurately capture fraud rates” in Medicare.

A new section of the Medicare manual encourages the use of fines to penalize doctors who generate a pattern of claims for goods and services that they know or “should know” are not medically necessary. Providers can also be barred from Medicare if they bill the program for “excessive charges” or for services substantially in excess of patients’ needs.

In a new report, Mr. Levinson said Medicare officials and contractors should focus on doctors with the highest Medicare billings because they often received improper payments. He said that about 300 doctors received more than $3 million each in yearly Medicare payments and that one-third of them had been singled out for special reviews because of questionable billings.

Doctors Abusing Medicare Face Fines and Expulsion – NYTimes.com

Patients’ Costs Skyrocket; Specialists’ Incomes Soar – NYTimes.com

 

CONWAY, Ark. — Kim Little had not thought much about the tiny white spot on the side of her cheek until a physician’s assistant at her dermatologist’s office warned that it might be cancerous. He took a biopsy, returning 15 minutes later to confirm the diagnosis and schedule her for an outpatient procedure at the Arkansas Skin Cancer Center in Little Rock, 30 miles away.

That was the prelude to a daylong medical odyssey several weeks later, through different private offices on the manicured campus at the Baptist Health Medical Center that involved a dermatologist, an anesthesiologist and an ophthalmologist who practices plastic surgery. It generated bills of more than $25,000.

“I felt like I was a hostage,” said Ms. Little, a professor of history at the University of Central Arkansas, who had been told beforehand that she would need just a couple of stitches. “I didn’t have any clue how much they were going to bill. I had no idea it would be so much.”

Ms. Little’s seemingly minor medical problem — she had the least dangerous form of skin cancer — racked up big bills because it involved three doctors from specialties that are among the highest compensated in medicine, and it was done on the grounds of a hospital. Many specialists have become particularly adept at the business of medicine by becoming more entrepreneurial, protecting their turf through aggressive lobbying by their medical societies, and most of all, increasing revenues by offering new procedures — or doing more of lucrative ones.

Patients’ Costs Skyrocket; Specialists’ Incomes Soar – NYTimes.com

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care: Minding the Gap

 

Importance Health care costs in the United States are rising rapidly, and consensus exists that we are not achieving sufficient value for this investment. Historically, US physicians have been paid more for performing costly procedures that drive up spending and less for cognitive services that may conserve costs and promote population health.

Objective To quantify the Medicare payment gap between representative cognitive and procedural services, each requiring similar amounts of physician time.

…

Results The revenue for physician time spent on 2 common procedures (colonoscopy and cataract extraction) was 368% and 486%, respectively, of the revenue for a similar amount of physician time spent on cognitive care.

Conclusions and Relevance Our analysis indicates that Medicare reimburses physicians 3 to 5 times more for common procedural care than for cognitive care and illustrates the financial pressures that may contribute to the US health care system’s emphasis on procedural care. We demonstrate that 2 common specialty procedures can generate more revenue in 1 to 2 hours of total time than a primary care physician receives for an entire day’s work.

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care:  Minding the Gap

JAMA Network | JAMA | Views of US Physicians About Controlling Health Care Costs

 

Physicians’ views about health care costs are germane to pending policy reforms.

Objective To assess physicians’ attitudes toward and perceived role in addressing health care costs.

…

Results A total of 2556 physicians responded (response rate = 65%). Most believed that trial lawyers (60%), health insurance companies (59%), hospitals and health systems (56%), pharmaceutical and device manufacturers (56%), and patients (52%) have a “major responsibility” for reducing health care costs, whereas only 36% reported that practicing physicians have “major responsibility.” Most were “very enthusiastic” for “promoting continuity of care” (75%), “expanding access to quality and safety data” (51%), and “limiting access to expensive treatments with little net benefit” (51%) as a means of reducing health care costs. Few expressed enthusiasm for “eliminating fee-for-service payment models” (7%). Most physicians reported being “aware of the costs of the tests/treatments [they] recommend” (76%), agreed they should adhere to clinical guidelines that discourage the use of marginally beneficial care (79%), and agreed that they “should be solely devoted to individual patients’ best interests, even if that is expensive” (78%) and that “doctors need to take a more prominent role in limiting use of unnecessary tests” (89%). Most (85%) disagreed that they “should sometimes deny beneficial but costly services to certain patients because resources should go to other patients that need them more.” …

JAMA Network | JAMA | Views of US Physicians About Controlling Health Care Costs

Special Deal by Haley Sweetland Edwards | The Washington Monthly

Another piece on the RUC. Follow the tags to learn more…

Over the past few years, a few well-placed health care figures from both parties have spoken out—at least once they’ve left office—about how crazy this system is. “The RUC is really just a giant cabal run by the AMA,” Thomas Scully, former head of the CMS under George W. Bush, told me. “A private trade association should not have that sort of control over the biggest spending account in the government. It’s an outrageous travesty of democracy.” Bruce Vladeck, former head of the CMS under Bill Clinton, agrees, calling the RUC “a significant part of the problem.”

There have also been scathing reports issued by the Government Accountability Office, and by MedPAC, the agency that advises Congress on Medicare-related issues, as well as some hard-hitting investigative reporting by the Wall Street Journal and the Center for Public Integrity. In 2011, a bipartisan panel participated in a Senate roundtable, during which three former heads of the CMS took turns lamenting the RUC.

Yet, for the most part, the RUC continues to operate exactly as it always has—behind the scenes, without anyone, including actual doctors laboring in the clinics and hospitals across the country, even really knowing about it. (This spring, Scully told me that he went to lunch with a very high-ranking official at the CMS who had no idea how the RUC actually worked.)

The Affordable Care Act, for its part, includes a few lines that could potentially, if incrementally, limit the RUC’s power. But in general, it doesn’t much change the way the reimbursement system works. Taking on the RUC would have “started a nuclear war with the AMA,” as Scully put it, and alienated other key political allies that the administration needed to pass the law to begin with. Fixing the RUC, however, is essential to fixing health care in this country.

Special Deal by Haley Sweetland Edwards | The Washington Monthly

How a secretive panel uses data that distorts doctors’ pay – The Washington Post

An “expose” on the RUC and physician payment structure. Follow the tag for “RUC” at the bottom to learn more, and “Physician Income” to learn more about what a fair income is, and “IPAB” for a potential solution…

So how much does a physician make on a basic colonoscopy?

A good place to look is Pennsylvania, where the state tracks medical procedures and the profits of the doctor-owned surgery centers.

Even in an otherwise down-at-the-heels former coal town, the procedure can be big business.

At Schuylkill Endoscopy, located in a tidy green building behind the McDonald’s in Pottsville, Pa., three doctors performed thousands of colonoscopies in 2011, taking in more than $700,000, along with hundreds of thousands more for other similar procedures. On top of those physician fees, the endoscopy clinic, which is owned by two of the physicians and a management company, took in $1.5 million in operating profits in 2011, according to state records.

“I am very comfortable — very grateful,” said one of the owner-doctors, Amrit Narula, who lives in a modern-style, 5,000-square-foot house atop a ridge here.

Like other doctors interviewed for the story, Narula noted that he has no role in setting the Medicare value. He does not lobby Medicare and has never filled out one of the RUC surveys. He agreed that the time estimates in his field sound exaggerated.

By itself, the professional fee for a colonoscopy makes him about $260 an hour after his expenses. (That’s a figure that’s based on the clinics’ mix of patients and the Medicare assumptions about overhead.)

Is that too much? In the past, the loudest criticism of the point system has come from primary care physicians who think their work has been undervalued.

The median salary for a gastroenterologist was $481,000 in 2011, according to data from the Medical Group Management Association. By contrast, the median salary for a pediatrician was $204,000 and that of a general internal medicine doctor was $216,000. Those kinds of disparities are leading medical students away from primary care, critics say.

“I didn’t know they got that many RVUs [points] for a colonoscopy — that’s kind of amazing,” said Cynthia Lubinsky, a family practitioner in the next county over from Narula. “Do I believe that the payment system is fair? I would have to say no.”

How a secretive panel uses data that distorts doctors’ pay – The Washington Post

“Seismic shift” lifts primary care’s impact on hospital revenues – amednews.com

“Seismic shift” lifts primary care’s impact on hospital revenues – amednews.com

For the first time, primary care physicians are driving more revenue on a per-doctor basis to hospitals than are specialists, according to a survey of hospital chief financial officers by physician recruiting firm Merritt Hawkins. It’s expected that this result is not a fluke, but a reflection of the growing emphasis on primary care by hospitals and the health care system in general.

Uwe E. Reinhardt: Debating Doctors’ Compensation – NYTimes.com

 

Debating Doctors’ Compensation

By UWE E. REINHARDT

Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

Two themes run through the comments on previous blog posts that touched on the payment of the providers of health care. The first is that American doctors are paid too much. The second is that they are paid too little.

Could both propositions be right? Let us explore the issue by looking at some numbers.

A nice discussion of physician compensation with some rather eye opening graphs for the uninitiated!

Uwe E. Reinhardt: Debating Doctors’ Compensation – NYTimes.com