physician pay

With the recent release of two mainstream exposes, one in the Washington Post and another in the Washington Monthly, the American Medical Association’s (AMA) medical procedure valuation franchise, the Relative Value Scale Update Committee (RUC), has been exposed to the light of public scrutiny. “Special Deal,” Haley Sweetland Edwards’ piece in the Monthly, provides by far the more detailed and lucid explanation of the mechanics of the RUC’s arrangement with the Centers for Medicare and Medicaid Services (CMS). (It is also wittier. “The RUC, like that third Margarita, seemed like a good idea at the time.

For its part, the Post contributed valuable new information by calculating the difference between the time Medicare currently credits a physician for certain procedures and actual time spent. Many readers undoubtedly were shocked to learn that, while the RUC’s time valuations are often way off, in some cases physicians are paid for more than 24 hours of procedures in a single day. It is nice work if somebody else is paying for it.

Two days after the Post ran its RUC article on the front page, it reported that the AMA is already visiting Congress in force, presumably to protect its role defining the value of medical services for Medicare. The question now is whether Congress will take steps to remedy the situation.

Continue reading “Why Congress Should Pass the Accuracy in Medicare Physician Payment Act”

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The RUC is an easy target. The RUC is flawed. But the RUC is not the problem. Several bloggers have written extensively about the RUC – How the RUC Escaped a Challenge to Our Deeply Flawed Reimbursement System and US Senate Subcommittee Asks What the RUC is About.

In no way can I defend the payment schedules that the RUC has proposed to Medicare. I can defend their recent changes. Radiology payments decreased last year; interventional cardiology payments decreased last year; and many other procedures have decreased dramatically. The relative payments are still wrong (in my opinion), but the RUC actually has been responsive to criticism. They have increased primary care payments (admittedly not enough).

But if one studies the problem carefully enough, one must decide that the idea of paying per episode almost must lead to gaming the system. Forget the RUC, the entire idea of time independent episode based payment must lead to worse medical care and higher costs. If physicians can make more money by doing more, then some will.

Practice administrators push primary care physicians to see more patients each day. If we can decrease the time spent per patient from 20 min to 15 min then we could see up to 8 more patients in an 8 hour day. Our overhead has not changed – hence the marginal financial benefits are huge.

But any honest physician will tell you that the result is rushed medical care. Do we want our surgeon trying to do 5 surgeries today rather than 4? Do you want to be the 5th patient? Continue reading “The RUC is a Symptom. RBRVS is the Disease”

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On January 7, a federal appeals court rejected six Georgia primary care physicians’ (PCPs) challenge to the Centers for Medicare and Medicaid Services’ (CMS) 20-year, sole-source relationship with the secretive, specialist-dominated federal advisory committee that determines the relative value of medical services. The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is, in the court’s view, not subject to the public interest rules that govern other federal advisory groups. Like the district court ruling before it, the decision dismissed the plaintiffs’ claims out of hand and on procedural grounds, with almost no discussion of content or merit.

Thus ends the latest attempt to dislodge what is perhaps the most blatantly corrosive mechanism of US health care finance, a star-chamber of powerful interests that, complicit with federal regulators, spins Medicare reimbursement to the industry’s advantage and facilitates payment levels that are followed by much of health care’s commercial sector. Most important, this new legal opinion affirms that the health industry’s grip on US health care policy and practice is all but unshakable and unaccountable, and it appears to have co-opted the reach of law.

The RUC exerts its influence by rolling up the collective interests of the nation’s most powerful medical specialty societies and, indirectly, the drug and device firms that support and benefit from their activity. The RUC uses questionable “methodologies,” closed to public scrutiny, to value medical services. CMS has historically accepted nearly 90 percent of the RUC’s recommendations without further due diligence. In a damning October 2010 Wall Street Journal expose, former CMS Administrator Tom Scully described the RUC’s processes as “indefensible.”

Continue reading “How the RUC Escaped a Challenge to Our Deeply-Flawed Reimbursement System”

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We physicians like to think that we are really different from other workers.

We physicians, perhaps thinking back to that medical school application essay we all wrote, really believe that we went into this career to simply help others.  We physicians truly believe that we always put our patients first.Because we sincerely believe all of the above, we are shocked when someone like Uwe Reinhardt points out that collectively we act just like any other worker in the economy.

The classic 1986 letters between the Princeton professor Reinhardt and former New England Journal of Medicine editor Arnold Relman highlight the tension between how we think of ourselves and how we act.

Relman thinks physicians are special and he asks Reinhardt the following question:

“Do you really see no difference between physicians and hospitals on the one hand, and ‘purveyors of other goods and services,’ on the other?”

Reinhardt is ready with a long answer that should be read in its entirety.  The short answer is that doctors act like any other human beings. A portion of his answer includes the following:

“Surely you will agree that it has been one of American medicine’s more hallowed tenets that piece-rate compensation is the sine qua non of high quality medical care.  Think about this tenet, We have here a profession that openly professes that its members are unlikely to do their best unless they are rewarded in cold cash for every little ministration rendered their patients.  If an economist made that assertion, one might write it off as one more of that profession’s kooky beliefs.  But physicians are saying it.”

Continue reading “The Battle for the Souls of American Doctors”

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Somewhere near where you live, a couple will discover this week that they are infertile and that if they want biological children of their own, they are going to need in vitro fertilization (or IVF).  According to treatment protocol, the woman will need to take powerful medicines to ramp up her production of fertilizable eggs.  One monthly cycle of this treatment will run around $12,000.  But most couples require more than one cycle to achieve their goal of carrying a child to term.  In other words, this couple could easily be looking at a bill exceeding $30,000 or $40,000.

And did I mention that this money could all come out of their own pockets?

Because not all insurance companies pay for in vitro fertilization.

No worry though.  Their infertility physician informs them about a company he has worked with that specializes in infertility loans.  He even offers to have his office staff help the couple fill out the necessary paperwork.  Thanks to this assistance, the couple secures the loan and, with luck, will soon be rewarded with a healthy baby.

Continue reading “Are In Vitro Fertilization (IVF) Clinics Scamming Customers?”

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Governor Patrick signed a new healthcare law today aimed at cost containment, and the rhetoric soared assuring all that Massachusetts has “cracked the code on healthcare costs.” Unfortunately, with no debate on the underlying bill in the House of Representatives and only little debate in the State Senate, the 349-page statute, which was released just 14 hours before the legislative final vote, is little understood and brimming with unintended consequences.

Real cost-containment is only possible when we encourage patients to reward low-cost, high-quality providers with their business.  We’ve said it over and over again throughout this process.

Instead, the law being signed today re-imagines and repackages so many failed top-down approaches from the past. The acronyms may have changed, but this bill looks a lot like past approaches that trusted government, not patients, to drive big, systematic changes in how we purchase healthcare. For some reason our state policymakers expect completely different results this time around.

Rather than provide financial incentives for individual patients to take charge of their own medical care, this legislation rearranges the system based on accountable care organizations (ACOs) and governmentally-imposed changes in payment methods.  Real-life evidence that these approaches contain costs is mixed at best; as a result, the law misses the mark by a long shot and will not lead to long-term, sustainable containment of health care costs.

Continue reading “Will Government-Directed Healthcare in Mass. Really Contain Costs?”

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In a new study published in JAMA, my colleagues and I found that even after accounting for productivity, women working as physician researchers at American Medical Schools are paid $13,000 less per year than their male colleagues, a difference that amounts to hundreds of thousands of dollars over the course of their careers.

But does this difference stand as evidence of discrimination?

Many claims of gender inequity in pay have suffered from an apples vs. oranges problem.  For example, consider gender disparities across different careers.  Many traditional male careers, like construction work, pay better than traditionally female careers, like nursing and teaching.  It’s plausible that these disparities result, at least in part, from societal bias about how relatively important it is for men and women to make enough money to provide for their families.  However, these disparities could also result from more justifiable factors.  Maybe the physical demands of the work differ in important ways, or perhaps the marketplace is simply responding to supply and demand.

Medical experts have long noticed gender disparities in physician pay.  Traditionally male fields like neurosurgery pay substantially more than fields preferred by more women, such as general pediatrics.  If women are voluntarily choosing lower paying fields—perhaps for lifestyle reasons or maybe because they don’t value money as much as men do—then it’s arguable that we should not fret over pay disparities.  It’s America, after all, where people have the right to choose.

Continue reading “Are Female Physicians Underpaid?”

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How physicians are paid and what services they choose to recommend are key drivers of today’s escalating health care costs. The Society for General Internal Medicine (SGIM) has convened an independent commission to assess physician payment and physician-influenced expenses as well as issue recommendations on how to reform physician payment to restrain health care costs while at the same time optimizing patient outcomes. The 13-member National Commission on Physician Payment Reform will work together over the upcoming year, with a final report expected in early 2013.

Payment incentives and systems directly impact medical services that physicians provide as well as the overall approach to their patients. For example, the current fee-for-service system aligns payment with services provided rather than overall care outcomes. While the Commission will examine existing formulas that determine physician payment, such as the Resource-Based Relative Value Scale (RBRVS), we will also investigate promising payment methods that could lead to higher quality of care and better patient outcomes. More specifically, the Commission will evaluate optimal incentives and safeguards surrounding the three principal forms of physician payment: fee-for-service, capitation, and salary, as well as variations of these forms such as episode-based payments, global payments, pay-for-performance and partial capitation that attempt to incorporate quality into the equation.

The Commission appreciates that many have already put considerable effort into payment reform.  We would like to complement, not duplicate, these efforts.  We will review new approaches in the Affordable Care Act designed to constrain costs, including bundled payments and Accountable Care Organizations, as well as disincentive payment strategies that penalize providers for avoidable costs. We will also draw on the factual findings of The Medicare Payment Advisory Commission.  A key difference is that the National Commission on Physician Payment Reform will look at the entire physician payment system, including both public and private payers.

Continue reading “Commission Tackles Physician Payment Reform”

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We’ve discussed it before. Why are costs so much higher in US healthcare compared to other countries? The Washington Post has a pointless article which seems to answer with the tautology costs are high because healthcare in America costs more. How much more? Well, we spend nearly twice as much per capita as the next nearest country while failing to provide universal coverage.

In the WaPo article they make a big deal of the costs of individual procedures like MRI being over a thousand in the US compared to $280 in France, but this is a simplistic analysis, and I think it misses the point as most authors do when discussing this issue. The reason things costs more is because in order to subsidize the hidden costs of medical care, providers charge more for imaging and procedures. For instance, Atul Gawande, in his New Yorker piece “The Cost Conundrum” wonders why it is that costs are higher to treat the same conditions in rural areas and in a major academic centers like UCLA than at a highly specialized private hospitals like the Mayo Clinic? I think the reason is it’s not nearly as expensive to administer and provide care for a select group of insured midwesterners at the Mayo than it is to provide care to the underserved in the poor areas of inner-cities and in poor rural locations.

Continue reading “What Is the Cause of Excess Costs in US Health Care? Take Two”

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I’ve heard a lot of shocking things since arriving in England five months ago on my sabbatical. But nothing has had me more gobsmacked than when, earlier this month, I was chatting with James Morrow, a Cambridge-area general practitioner. We were talking about physicians’ salaries in the UK and he casually mentioned that he was the primary breadwinner in his family.

His wife, you see, is a surgeon.

This more than any other factoid captures the Alice in Wonderland world of GPs here in England. Yes—and it’s a good thing you’re sitting down—the average GP makes about 20% more than the average subspecialist (though the specialists sometimes earn more through private practice—more on this in a later blog). This is important in and of itself, but the pay is also a metaphor for a well-considered decision by the National Health Service (NHS) nearly a decade ago to nurture a contented, surprisingly independent primary care workforce with strong incentives to improve quality.

Appreciating the enormity of this decision and its relevance to the US healthcare system requires a little historical perspective.

As I mentioned in a previous blog, the British system cleaves the world of primary care and everything else much more starkly than we do in the States. All the specialists (the “ologists,” as they like to call them) are based in hospitals, where they have their outpatient practices, perform their procedures, and staff their specialty wards. Primary care in the community is delivered by GPs, who resemble our family practitioners in training and disposition, but also differ from them in many ways.

Continue reading “The British Primary Care System and Its Lessons for America”

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