On the front page of Today’s Wall Street Journal is an article entitled, “Medical Specialties Hit by a Growing Pay Gap”.
A few passages worth thinking about:
"Many in health-policy circles have focused on how the current health-care payment system is helping create shortages among primary-care doctors, internists and others on the front lines of medicine. But often lost is how the system is endangering some of the country’s most highly trained specialties as well."
"… Medicare implemented a new system to set standard fees for physicians’ services and procedures. The system’s aims were to clamp down on prices and, ironically, narrow the disparity between the bread-and-butter office visit and more-expensive specialty procedures. (emphasis mine) Over time, private insurers have taken their cue from Medicare to set their reimbursements, too."
And one more…
"Medicare officials say the government program tries to address cost disparities by continually reviewing its fee schedule but says it relies a lot on medical-specialty societies to raise such issues."
"We want to make sure that payment is appropriate and that includes not underpaying," says Terrence Kay, senior adviser to the director of the Center for Medicare Management.
“We want to make sure that payment is appropriate and that includes not underpaying,”
So how does that control costs? Medicare is fighting a loosing battle trying to operate in a money driven system while trying to contain expenses. It isn’t going to happen.
Wouldn’t implementing a value-based payment system instead of a procedural-based payment system eliminate most of the screwed up incentives mentioned in this article?
If physicians are rewarded more generously for performing expensive technologically advanced procedures, of course they will migrate to specialties that do so.
I wouldn’t necessarily say that these (sub-) specialists are underpaid (maybe some of them, esp. in costly metrpolitan areas) … just that some surgical and “procedural” specialties are greatly OVERpaid. I do not see a reason why so many physicians make 10x the average US household income. Of course, this pales in comparison to excesses in CEO compensation.