Category: Physician Income

An Interview With Thomas Russell for Health Affairs

Health Affairs Blog link to full interview.

John Iglehart, one of the Founders of Health Affairs posts an interview with surgeon and retiring Executive Director of the American College of Surgeons. There are quite a few pleasantly surprising moments in the interview, which I’ll bullet here, but you can go read on your own.

  • Q. I would assume that more than a few surgeons regard such activity as an intrusion into the independent practice of medicine. Is there a generational difference among surgeons in their willingness to cooperate or at least participate in these kinds of initiatives?
    Russell: Absolutely. The younger surgeons have trained in an environment in which they to expect that the quality of care they deliver will be measured and evaluated, so they don’t really have any difficulty participating in these activities. It’s some of the older physicians who entered practice in a more autonomous era who struggle with these new forms of oversight.
  • First, let me say that the surgical community is not homogeneous, and they’re all over the map on reform. The College has a split membership. Some surgeons think that the status quo is just fine and that greater oversight and accountability are unnecessary. They view them as intrusions into the autonomy of a sovereign profession, while others are all in favor of reform.
    There is at least one matter on which I think we mostly agree, and that is the fact that we have to do something to fix our broken payment system. So, the number-one change that I would like to see emerge from the health care reform debate is fundamental, long-term improvement in how physicians are paid, so that they really are being paid for providing cost-effective, high-quality services.
  • Iglehart: Would that mean, according to your vision, an abandonment of the fee-for-service payment model and going to an alternative model, or some kind of a hybrid?
    Russell: I recently addressed a large group of surgeons and asked them whether they are paid a salary, and most of them raised their hands. Throughout the nation, more surgeons are becoming salaried professionals. Most academic surgeons as well as those in integrated delivery systems—such as the Mayo Clinic, Geisinger, Kaiser, and many others, including Veterans Affairs—are on salary. So are doctors who are employed by the VA. I think it’s safe to say that more than 50 percent of the nation’s physicians are paid a salary. And, some of the happiest doctors whom I’ve met are the salaried ones because they don’t have to deal with the hassles of malpractice insurance, including the high premiums they pay, or coding, or any of the other administrative burdens that confront physicians who are in private practice and reimbursed through the complicated fee-for-service system.
  • We also need to look in a very thoughtful, ethical way at rational – I’m not using the word rationing, I’m using the word “rational”–ways to improve end-of-life care.
    In addition, the medical and surgical professions need to develop protocols for the best ways to approach diseases. We need policies about when scans, such as a CTs and MRIs, are indicated, and to make sure they are not unnecessarily repeated by another physician. And we must develop standardized ways of treating diseases so that every health care professional involved in coordinating a patient’s care is addressing the condition in the most cost-effective way that follows the scientific evidence.
  • For instance, I think that the Number One way to help patients avoid frivolous trips to the ER is to educate them about where they should turn to receive appropriate care for nonemergency conditions and to make certain they have access to primary care physicians. [We do a poor job of getting people into PCPs– cmhmd]
  • Here’s how this maldistribution of surgeons has arisen. About 80-90% of medical school graduates who pursue surgery as a specialty begin their residency training in general surgery. After five or six years of residency, and at ages 32 to 34, many pursue additional training in a fellowship that will allow then to focus on just one type of disease or organ that general surgeons treat and operate on. That is to say, they become super-specialized in breast surgery, minimally invasive surgery, bariatric surgery, cardiac surgery, or cancer surgery. So they’re taking themselves out of the pool of professionals who can perform the broad range of general surgery procedures. And, most of this highly specialized surgery is performed in large cities, so these surgeons are not typically accessible to rural patients.
  • Organized medicine and many Republican legislators have long argued in favor of capping awards for noneconomic damages, but I don’t believe the nation will ever reach a consensus on that proposal, although a few states have implemented the limits. I think instead more efforts should be made to educate, in this case surgeons, about how to avoid or better manage risk by staying within their scope of practice. Communication with the patient and his or her family throughout the surgical experience is also key to helping these individuals understand why there was a negative outcome. When a mistake is made, apologize, if you practice in a state that has passed legislation providing legal protections for saying, “I’m sorry.”
    Very important, too, is for the profession to develop evidence-based best practice protocols and for physicians to follow them closely. In my era, we objected to this form of standardization and called it “cookbook medicine.” But, as calls for accountability have increased, lawmakers should consider setting policies that protect physicians who adhere to professionally developed protocols. In these cases, if a patient sues because of a bad outcome, the physician can respond with a legitimate defense: ”Look, I followed the protocol that we all agreed was best practice. I’m sorry for the bad outcome, but a bad outcome does not equal malpractice. [Except for this and people like Bernadine Healy, who should know better -cmhmd]

Thanks to Mr. Iglehart and Dr. Russell for the informative interview.

House Bill Effects on Physician Income

I had a piece in the Pittsburgh Post-Gazette today on physician support of health reform.

A sadistic friend posted it on Sermo. Weee!

The subject of the effect on physician income came up on our Doctors for America and I said:

I often ask my colleagues who 1.) complain about Medicare rates and 2) say all care for the uninsured should be via charity by physicians , “Wouldn’t you rather get paid a bit less and have everyone covered so you have more paying patients?”

I doubt anyone has done an analysis of what the net effect of this would be, but perhaps the net effect would be neutral or positive, I don’t know. BUT as the NEJM survey said, most of us find it acceptable to take lower reimbursements if everyone is covered.

Our terrific Media Mogul, Mandy Krauthammer-Cohen, MD, of course, had a great bit of information:

Some additional food for thought. If you look at the Lewin group analysis….which does have a conservative bias given it is owned by United Health…physicians will actually make more money under health reform with a public option.

Testimony by Lewin states: “In the first year of the program (when public option is only opened to small businesses with less than 10 employees), physician income would increase by $10.9 billion. This reflects the reduction in uncompensated care for uninsured people as well as increased health services utilization for newly insured people. It also reflects the House bill provisions that would increase Medicaid reimbursement for primary care services to Medicare payment levels. Thus, the reductions in payment for people who shift to the public plan are outweighed by increases in reimbursement for Medicaid, reductions in uncompensated care and revenues from increased service use for newly insured people. Average net-income per physician wouldincrease by $15,237 in 2010 under this scenario.”

Read the whole testimony here.

This American Life HC Reform Part 2

This American Life:

This week, we bring you a deeper look inside the health insurance industry. The dark side of prescription drug coupons. A story about Pet Health Insurance, which is in its infancy, and how it is changing human behaviors—for example, if you have the pet health insurance, you bring your pet to the vet more often, and the vet makes more money and…well, you can see the parallels. And insurance company jargon, frighteningly decoded.

Prologue. Host Ira Glass describes the crazy world of medical billing, where armies of coders use several contradictory different systems of codes…and none of it makes us healthier. (5 minutes)

Act One. One Pill Two Pill, Red Pill Blue Pill.
Planet Money’s Chana Joffe-Walt explains why prescription drug coupons could actually be increasing how much we pay, and prevent us from even telling how much drugs cost. (13 1/2 minutes)

Act Two. Let’s Take Your Medical History.
Alex Blumberg and Adam Davidson recount how four accidental steps led to enacting the very questionable system of employers paying for health care. (11 1/2 minutes)

Act Three. Insurance? Ruh Roh!
Planet Money correspondent David Kestenbaum investigates the growing popularity of pet
insurance, and what it reveals about insurance for people. (14 minutes )

Act Four. Sorry Johnny… It’s Only Business.
This American Life producer Sarah Koenig reports on a very surprising reason why insurance companies dump members, and how this reasoning contradicts President Obama’s argument for what will lower health care costs. (11 1/2 minutes)

Again, a very interesting program to follow up on last week’s episode.

In Act IV, the interview with Uwe Reinhardt is very thought provoking. Specifically, he talks about the power of suppliers (i.e., hospitals) in the insurer-provider tug of war, and about Maryland’s “All Payer System,” which I will try to learn more about and pass along when I do…

MP3 of Part 2

MP3 of Part 1 is not offered directly at the website. You can subscribe to the podcast and then download yourself here: http://feeds.thisamericanlife.org/talpodcast

TIME – A Healthier Way to Pay Doctors

From Time Magazine

With the effort to rein in health-care costs increasingly framed as an unhappy trade-off in which insurers either slash benefits or raise premiums, some in Washington are beginning to ask a question long considered off-limits: Do we simply pay doctors too much?

The truth is, we pay them all wrong.

Doctors themselves could tell you that — particularly primary-care providers (PCPs), the foot soldiers of the U.S. medical system. New doctors graduate from medical school lugging up to $200,000 in student loans. Paying that off takes a big bite out of even a low-six-figure salary. Add to that the high costs, long days and billing headaches involved in running a practice, and it’s no wonder so many family docs are trading up to specialties like orthopedics or neurology, where the pay can be three times as great and the hours a whole lot shorter. Only 3 out of 10 doctors in the U.S. now are PCPs, compared with 5 out of 10 elsewhere in the world. Those family physicians who remain find themselves in a constant money chase, meeting their monthly nut with the help of the revenue they make by prescribing tests — X-rays, CT scans, EKGs — that may or may not be strictly necessary but generate a lot of separate billing.

——–

In his Sept. 9 speech to Congress, President Obama singled out Geisinger and Utah’s Intermountain Healthcare as examples of organizations that are learning to do things right. He could have cited others too: the Cleveland Clinic, the Mayo Clinic, Kaiser Permanente. What these providers have in common are the creative ways they’re doing away with fee-for-service and replacing it with an imaginative mix of systems that cost less, keep patients healthier and make doctors happier. “We need a transition to rewarding the actual value of care,” says Dr. Elliott Fisher, director of population health and policy at the Dartmouth Institute. “For now, our payment system is getting in the way.

Swiss Model for Health Care Is Gaining Admirers – NYTimes.com

Swiss Model for Health Care Is Gaining Admirers – NYTimes.com:

ZURICH — Like every other country in Europe, Switzerland guarantees health care for all its citizens. But the system here does not remotely resemble the model of bureaucratic, socialized medicine often cited by opponents of universal coverage in the United States.

Swiss private insurers are required to offer coverage to all citizens, regardless of age or medical history. And those people, in turn, are obligated to buy health insurance.
That is why many academics who have studied the Swiss health care system have pointed to this Alpine nation of about 7.5 million as a model that delivers much of what Washington is aiming to accomplish — without the contentious option of a government-run health insurance plan.

In Congress, the Senate Finance Committee is dealing with legislation proposed by its chairman, Max Baucus, Democrat of Montana, which would require nearly all Americans to buy health insurance, but stops short of the government-run insurance option that is still strongly supported by liberal Democrats.

Two amendments that would have added a public option to the Baucus bill were voted down on Tuesday. But another Senate bill, like the House versions, calls for a public insurance option.

By many measures, the Swiss are healthier than Americans, and surveys indicate that Swiss people are generally happy with their system. Switzerland, moreover, provides high-quality care at costs well below what the United States spends per person. Swiss insurance companies offer the mandatory basic plan on a not-for-profit basis, although they are permitted to earn a profit on supplemental plans.

And yet, as a potential model for the United States, the Swiss health care system involves some important trade-offs that American consumers, insurers and health care providers might find hard to swallow.

The Swiss government does not “ration care” — that populist bogeyman in the American debate — but it does keep down overall spending by regulating drug prices and fees for lab tests and medical devices. It also requires patients to share some costs — at a higher level than in the United States — so they have an incentive to avoid unnecessary treatments. And some doctors grumble that cost controls are making it harder these days for a physician to make a franc.

The Swiss government also provides direct cash subsidies to people if health insurance equals more than 8 percent of personal income, and about 35 to 40 percent of households get some form of subsidy. In some cases, employers contribute part of the insurance premium, but, unlike in the United States, they do not receive a tax break for it. (All the health care proposals in Congress would provide a subsidy to moderate-income Americans.)

The German system also does fine without a “public option,” and is my favorite model, but this type of advance will take us a few years, but I think we will get there eventually. Having a successful public plan pulling the private insurers, including the not-for-profit-in-name-only ones, into some sanity will help tremendously. The bold, italicized part above is really the key to real reform and universal access: “Swiss insurance companies offer the mandatory basic plan on a not-for-profit basis, although they are permitted to earn a profit on supplemental plans.”

Another interesting tid-bit:

As in the United States, practitioners typically are paid on a fee-for-service basis, rather than on salary. But they make less than their American counterparts. According to the O.E.C.D., specialists in Switzerland earn three times more than the nation’s average wage, compared with 5.6 times for American specialists. General practitioners in Switzerland make 2.7 times more than the average wage, versus 3.7 in the United States.

So specialists:PCP income here in the US is $1.51: $1
Switzerland is $1.11:$1.00
Interesting…

Doctor Self-Referrals Part of Health-Care Cost Trend – washingtonpost.com

Doctor Self-Referrals Part of Health-Care Cost Trend – washingtonpost.com:

“In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

“The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging — and drawing insurance reimbursements for each of those patients.”

It is clear some oxen have to be gored, or at least hobbled, to “bend the curve.” Let’s start being explicit about where to do this. Private insurers, over-utilizing physicians, drug and equipment manufacturers and suppliers. Let’s start the hard discussions, please.

Doctors Oppose Giving Commission Power Over Medicare Payments – WSJ.com

Doctors Oppose Giving Commission Power Over Medicare Payments – WSJ.com:

But doctors are objecting to proposals that would allow a federal commission to set the size of Medicare payments to doctors, hospitals and other health-care providers. Under a proposal from White House budget director Peter Orszag, if the president accepted the commission’s recommendations, they would automatically take effect unless Congress acted to block them.
Doctors’ objections to the commission idea highlight the difficulty of maintaining the support of different health-care constituencies when the focus turns to controlling costs.
Surgeons would ‘vigorously oppose’ legislation that gave an unelected executive agency power to set Medicare rates, said the American College of Surgeons, which claims more than 74,000 members, in a letter to House Speaker Nancy Pelosi last week. Several surgical-specialty societies also signed the letter.
The AMA, which claims 250,000 members, said a commission shouldn’t be authorized to set Medicare payment rates for physicians. ‘If the solution is we’re just going to have a big board that will make draconian slashes, that’s not getting at the root cause of what the problem is,’ said AMA President J. James Rohack.

This is interesting. First, reimbursements are virtually set now by an unelected board, the RUC, made up largely of the highly paid, procedure based specialists.

Second, I just heard Chuck Grassley on NPR this morning saying the House and Kennedy Bills did nothing to bend the curve. This is what is required to bend the curve. Put up or shut up. Bending the curve isn’t some magical thing where everyone gets to keep making as much money, on the same trajectory as they do now.

And it’s worth pushing back on the AMA in particular. They’ve been talking a good game about what needs to be done to improve health care, reluctantly (because of fear of retribution, I suspect) pointing out whose oxen to gore, but they’ve been very silent about what physicians will be required to give up in all of this.

I frankly don’t expect to have to give up much, (I’m 49) and what I do give up will occur over ten to twenty years and so accommodation will be made by the “youngsters,” those going into and coming out of medical school and residencies now). They are the the physicians who will actually be affected by this. The old guys pissing and moaning are ready to retire soon, so shouldn’t be holding the country hostage to their reactionary, out dated ideas of what medicine should be about.

UPDATE: I was researching Medcare for a talk on the 44th anniversary of the program, and it is worth mentioning that one of the things LBJ had to do to pass Medicare was to cave to the American Medical Association and American Hospital Association, essentially giving them whatever was required to stop opposing the legislation. This had good and bad effects: lots of hospital construction, advances in medicine, and huge revenue boosts for hospitals and doctors.

On principle, we should not cave to get reform, but on a pragmatic level, fear works and the erosion in support for reform is evidence of that. But let’s call BS, at least, on Grassley and the other reborn deficit hawks: If you want to bend the curve, then you have to make some tough choices.

Health Affairs – 2 articles on the cost of private insurers to the system

Two articles from Health Affairs regarding the cost of Private Health Insurers, for profit and not for profit, to physicians’ practices, bottom lines, time and aggravation.

Peering Into The Black Box: Billing And Insurance Activities In A Medical Group — Sakowski et al. 28 (4): w544 — Health Affairs:

“Billing and insurance–related functions have been reported to consume 14 percent of medical group revenue, but little is known about the costs associated with performing specific activities. We conducted semistructured interviews, observed work flows, analyzed department budgets, and surveyed clinicians to evaluate these activities at a large multispecialty medical group. We identified 0.67 nonclinical full-time-equivalent (FTE) staff working on billing and insurance functions per FTE physician. In addition, clinicians spent more than thirty-five minutes per day performing these tasks. The cost to medical groups, including clinicians’ time, was at least $85,276 per FTE physician (10 percent of revenue).”

What Does It Cost Physician Practices To Interact With Health Insurance Plans? — Casalino et al. 28 (4): w533 — Health Affairs: “Physicians have long expressed dissatisfaction with the time they and their staffs spend interacting with health plans. However, little information exists about the extent of these interactions. We conducted a national survey on this subject of physicians and practice administrators. Physicians reported spending three hours weekly interacting with plans; nursing and clerical staff spent much larger amounts of time. When time is converted to dollars, we estimate that the national time cost to practices of interactions with plans is at least $23 billion to $31 billion each year.”

ACC aghast at proposed cuts to cardiology payments in Medicare physician fee schedule for 2010

ACC aghast at proposed cuts to cardiology payments in Medicare physician fee schedule for 2010:

“Baltimore, MD – The US Centers for Medicare & Medicaid Services (CMS) has announced its planned 2010 Medicare Physician Fee Schedule (MPFS), colloquially known as ‘the update,’ which includes proposals expected to result in an overall payment cut of 11% for cardiology [1].”

Offered without comment, except to say scroll down and read the comments of the ACC members…

Health Care Renewal: A Letter from the RUC, and My Reply

Health Care Renewal: A Letter from the RUC, and My Reply

This is a terrific, comprehensive review of the committee that places value on the things physicians bill for.

It is clear why procedure based specialists do so very, very well, and primary care docs constantly get the short end of the stick.