<\/p>\n
\nOrthopedists.<\/em><\/strong> A 2011 survey revealed that orthopedists enjoy a median salary of $514,000<\/a>. This is the net physician income after office overhead has been paid. Overhead costs averaged 46.3 percent for orthopedic surgeons in 2000<\/a> and accounted for 45 percent of revenue in 2012<\/a>. (This is slightly better than the 50 percent overhead that my practice averages.) Therefore, the gross practice revenue per orthopedist currently is just over $934,000 with an average overhead cost of $420,000. According to data provided by the American Academy of Orthopaedic Surgeons<\/a>, orthopedic patients by payer are as follows: Medicare\/Medicaid\u201431 percent; the uninsured\u201417 percent; commercial insurance\u201434 percent; and other sources, such as worker\u2019s compensation\u201418 percent. Essentially, half of the average orthopedist\u2019s payment sources are commercial insurance of some type, one third are Medicare or Medicaid, and one sixth is self-pay; this last category\u2014patients paying for their own care\u2014typically contributes only a small amount to practice revenue.<\/strong><\/em><\/p>\n
<\/strong><\/em>We can test the claim that physicians lose money on their treatment of Medicare patients or make only $8 an hour treating such patients by substituting Medicare reimbursement for the commercial reimbursements to a doctor\u2019s practice. Would orthopedists truly make $8 an hour or would their practices be bankrupt if all payers used Medicare\u2019s reimbursement schedule? Remember, this is the articulated position of much of the orthopedic community and a common defense against reimbursement reductions.<\/p>\n
According to a comprehensive analysis by the consulting firm, Milliman<\/a>, in 2008, on average, commercial insurance paid 130 percent of Medicare\u2019s reimbursement, or, seen a different way, Medicare paid 78 cents for every dollar of commercial reimbursement for physicians\u2019 work. If we reduce the $467,000 in commercial insurance payments to a typical orthopedist\u2019s practice by 22 percent to reflect lower Medicare payments, we obtain $364,000. Adding this back to the Medicare\/Medicaid and self-pay portion of practice incomes yields a new gross revenue figure of $831,000. This would be the average orthopedist\u2019s practice income if Medicare\u2019s pay scale were universally used.<\/p>\n
Taking out $420,000 in overhead, we see that an orthopedist surviving solely on Medicare reimbursements would receive $411,000 in take-home pay, or approximately $100,000 less than we actually enjoy with the current mix of insurance payers. While I agree that this is a steep reduction, it is abundantly clear that such reimbursement would by no means bankrupt a practice or yield an hourly wage anywhere close to $8 per hour. Therefore, such statements are gross hyperbole.<\/p>\n<\/blockquote>\n