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“Spread the Wealth” Controversy Hits Doctors

By now you know that Senator Max Baucus (D-MT) has offered a “Call to Arms” for health care reform by way of a 98-page policy document. There is much to think about in Baucus’ proposal, so you might have missed the section where he talks about increasing payments to primary care providers at the expense of compensation for specialists. But in the future, keep your eyes peeled for developments around this proposition—because supporting primary care is going to be a complex and controversial undertaking.

Baucus rightly recognizes that primary care is “undervalued” in our health care system. The Medicare reimbursement schedule—which is the model for private insurers rates—pays a lot more for removing a wart than it does, say, for talking to patients about their medications. Doing something to a patient (procedural care) is compensated much more than is doing something with a patient (cognitive care). The result is that generalists, including family practitioners, internists, primary care providers (PCPs), geriatricians and palliative care specialists make a lot less than proceduralists.

Today the average annual salary of a radiologist is $354,000, and at the high end they make $911,000. Orthopedic surgeons pull in $459,000 to $1.352 million; cardiovascular surgeons average $558,719 to $852,000. By contrast, internists report average salaries of $176,000; after years of experience, they can hope to make $245,000. In the middle of her career, the typical pediatricians can expect to earn $175,000; later, she may move up to $271,000. The average family practitioner may gross $204,000, at the high end he can look for $299,000.

Following the recommendations of an April Medicare Payment Advisory Commission (MedPAC) report, Baucus wants to restructure the reimbursement system to place more value on primary care. Part of this plan is to offer bonus payments to PCPs by making a list of services that qualify as primary care services (“evaluation and management visits”) and boosting payments to doctors who deliver these services. These increased payments would be “budge-neutral”—meaning that hikes in PCP payments would be coupled with corresponding cuts in some specialists’ payments.

On the one hand, Baucus is right. PCPs and, more broadly, generalists, should be paid more for their services. The work they do is absolutely essential: coordinating care lowers health care costs by preventing unnecessary or duplicate tests and prescriptions, and helps to keep tabs on chronic illnesses—which are responsible for 75 percent to 80 percent of our heath care bill. But Baucus will have a fight on his hands, since giving more to PCPs means giving less to specialists.

The ever-reliable Kevin M.D. has already begun chronicling the burgeoning “civil war” between primacy care physicians (PCPs) and specialists on his blog. He highlights a dispatch from Bob Doherty, blogger for the American College of Physicians, from the American Medical Association’s House of Delegates meeting on Monday. Doherty notes that “many of the physicians lining up at the microphones have expressed support for [increased] primary care [payments]—as long as it doesn’t involve redistribution of dollars among physicians.” Uh-oh.

“It is not a good sign that some physician specialty societies already are drawing such lines in the sand,” says Doherty—and indeed they are. After MedPAC issued its recommendations in April, the American College of Surgeons—along with thirteen surgery subspecialty associations like the American Association of Neurological Surgeons, the American Academy of Ophthalmology, and the American Association of Orthopaedic Surgeons—wrote a letter to the commission declaring its “strong opposition” to budge-neutral increases in PCP payments. Trading a primary care bump for specialty cuts would “address the challenges facing one aspect of medicine at the expense of all others,” say the surgeons. In a blog post this month, one associate professor of cardiology at Northwestern University goes even further, calling the Baucus/MedPAC plan an attempt to “steal from the rich (specialists) and give to the poor (generalists).” This one’s going to get ugly.

Reality Check

Part of the anger no doubt stems from the fact that many specialists must undergo an extra two to three years of training to gain expertise in their chosen field. Given that they’ve studied longer, shouldn’t they make more money? Maybe. But how long can two extra years of school translate into three times the money? Isn’t there a point where the collective benefits of a doctors’ work also should  influence how much she is  paid, just as much—if not more—than years of schooling?

If your answer to this question is “yes,” then you’ll find the following numbers disturbing: between 1997 and 2006, annual compensation of dermatologists increased by 97 percent; for gastroenterologists, 78 percent; and for radiologists, 65 percent. Over this same period, however, pediatricians saw a jump of just 32 percent; internists 30 percent; and family medicine generalists a mere 21 percent. Specialists don’t just make more money than other doctors—over time, they also make more money faster than others. It’s hard to see how extra schooling can rationalize these numbers.

Given this state of affairs, it’s perhaps unsurprising that medical school graduates aren’t keen on becoming PCPs. In 1990, 9 percent of graduating medical students planned to work in primary care/internal medicine; a  September University of California-San Francisco survey of 1,200 med students puts that proportion at a mere 2 percent today.

Moreover, we know that the financial incentives in our health care system encourage physicians to over-treat in certain areas. Back in January, Maggie reported on the “turf wars” that the Happy Hospitalist described in hospitals where doctors fight when it comes to performing very lucrative procedures. Colonoscopies, for example, pay nicely, and doctors vie to do them.  Meanwhile, the U.S. Preventive Services Task Force recommends that patients have a colonoscopy only every ten years “on the basis of evidence regarding the natural history of adenomatous polyps.”

Yet, just last year, the New York Times pointed to a study suggesting that colonoscopies are performed too often. According to the research, “60 percent of the time” patients have a new colonoscopy “sooner than the guidelines called for by the American Cancer Society and the American Gastroenterological Association.

“Not surprising,” commented blogger Kevin M.D., “since they are well-reimbursed.” This suggests that patients might benefit if Medicare took a close look at fees for procedures that we know are being done more often than evidence-based guidelines would suggest.

Working Conditions

But will extra pay really bring us the number of new generalists that we need?  Undeniably, cash is part of the cost-benefit equation that doctors and freshly-minted MDs consider when thinking about their future.  According to the 2008 Survey of Primary Care Physicians, administered by the medical search firm Merritt, Hawkins, and Associates, 47.12 percent of internists, family practitioners, and pediatricians feel that their net income from practice is “disappointing.” Further, a whopping 72.86 percent of PCPs think that the financial viability of their practice over the next one to three years is poor, shaky, or mixed.

These aren’t comforting numbers. But, at the same time, 44.58 percent of respondents said that their net income from practices was “appropriate”—almost as many as reported disappointment with their earnings. Yet while primary care providers are split in their financial pessimism, they’re less divided about their overall unhappiness with primary care.  Merritt, Hawkins, and Associates reports that 60 percent of PCPs would choose another field if they could do it all over again.

This dissatisfaction probably has much to do with the day-to-day reality of primary care. No matter how much it pays, primary care and generalist medicine is very time-consuming and laborious. It’s ongoing work that is focused on communication, coordination, and prevention, and it’s after-hours effort that involves regularly consulting with patients and doctors.

Primary care is not episodic like surgery: a surgeon sees one patient for five hours to perform a distinct, well-defined procedure. At the end, he can feel enormous satisfaction in a job well done. By contrast, consider the never-ending task of providing primary care for Medicare patients, who visit physicians an average of 57 times a year and see an average of 14 different physicians. That’s a lot of coordination and administrative legwork. Unsurprisingly, the UC-San Diego survey showed that administrative burdens—paper work, the constant demands of the chronically ill, and the after-hours attention required to coordinate it all—are some of the major reasons why med students are not going into primary care.

These realities won’t go away, and we should be careful not to think that throwing money at doctors will definitively push them toward a particular field. The pace, character, and duration of the work is just as important as how much a doctor makes from it.

No doubt, more pay would make the burdens of primary care delivery more palatable. But we will need other reforms as well.  For example, Baucus, like President-Elect Obama, calls for the creation of a new public insurance plan. This would help: the more people covered under a single provider, the better, at least from an administrative standpoint. Greater uniformity in coverage would save doctors countless hours of navigating the fragmented, byzantine requirements of various private insurers.

Another boon for primary care legwork would be improved health care IT which, in the long-run, would make the coordination of care far more efficient. It’s a lot easier to pull up someone’s personal health record than it is to call four doctors and ask them to fax over information.

But health care IT is initially very  expensive. Studies of small group practices trying to implement electronic medical records show that on average, the systems initially cost somewhere between $33,00 to $44,000 per physician, plus maintenance costs ranging from $18,000 per physician annually (if the practice invested  only $33,00) per physician when setting up the system) to $8,500 per provider (if they spent more at the outset.)

Meanwhile,  “For most practices, electronic health record implementation leads to a reduction in productivity for 10-15 months and a 10% cut in take-home pay for five years,” notes the Texas Primary Care Coalition report, citing a study of “Medical Groups’ Adoption of Electronic Health Records  and Information Systems” published in Health Affairs in 2005.  Typically, it takes ten years before electronic medical records “pay back” for the initial investment.

Clearly, family doctors working solo or in small group practices are not going to be able to afford health care IT unless they receive funding either from the government or a hospital flush with cash.

But if someone does provide the seed money for electronic medical records, this will make an enormous difference for primacy care physicians: one-half of the doctors in the Merritt, Hawkins, and Associates survey reported that a full 50 percent of their revenues went to overhead. Reduce the paperwork, and more doctors would take home more money, and, presumably, feel better about their financial futures.

Another helpful reform—which unfortunately is not mentioned in the Baucus plan—would be a loan forgiveness program for med school graduates who choose primary care. On average, a medical student graduates with $140,000 in debt, making lower-paying physician jobs less than appealing. Give them the chance to be debt-free, and the cost-benefit calculation is changed dramatically.

Necessary but Not Sufficient

All of these changes are about more than just paying primary care doctors more for their services, although compensation is admittedly part of the equation. But the point is that, while increasing primary care payments and trimming pay for some specialists services is a good idea, it’s no panacea. The problem is complex, and goes beyond income.

Ultimately, we will probably need to be grapple with primary care as a cultural issue within the medical community. In the past, Health Beat has noted that there is a “cultural divide” between proceduralists and cognitive physicians, and that, in medical schools, students are sometimes looked down upon for choosing to specialize in cognitive care.  Further, research has shown that the medical school curriculum actually drains students of empathy, which may contribute to de-valuing communicative, interpersonal care. When trying to figure out why new graduates are not interested in primary care, it’s worth looking at what our educational institutions emphasize. Do they even offer courses in palliative care and geriatrics?

The bottom line is that we need to take a multi-faceted approach to the primary care crisis. Reform needs to move forward on multiple fronts so that when conflicts arise—like the generalist/specialist tug of war that appears to be brewing—progress continues. We need to keep moving forward in addressing our primary care crisis; and the best way to do that is to recognize the value of tackling it from different angles.

Niko Karvounis tracks the health care system for the Century Foundation. Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, she is the author the increasingly influential HealthBeat blog, one of our favorite health care reads and where this piece first appeared.

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johirbarbev M.D.David C. Kibbe, MD MBA Recent comment authors
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johi
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rbar
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rbar

Good summary of what has been discussed here over and over. 2 comments: (1) The specialist vs. generalist labeling is inexact – proceduralist vs. cognitive medicine is better. I am in a nonsurgical specialty doing few procedures, like my specialty colleagues (except for the few who in fact specialize on the few procedures within the specialty), and so are many other specialist docs – I am not sure whether the following list is accurate/complete, but I’d say: rheumatologists, endocrinologists, psychiatrists, neurologists, neuroophtalmologists. (2) In my opinion, lifting up cognitive medicine a little won’t do it alone. If busy cognitive doctors… Read more »

bev M.D.
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bev M.D.

Good and fair post. But addressing just the narrow issue of “spreading the wealth”, I don’t see why it has to be publicly couched in the terms of taking from the specialists and giving to the PCP’s. Why not simply change the reimbursement system away from procedure-based,(as all agree needs to be done anyway) without all the discussion of “rewarding” PCP’s, whom many physicians regard as the least well-trained and intellectually inclined of the profession? Personally I think the specialists need to be spending more “cognitive time” with their patients too, rather than rushing straight to the procedure. Don’t forget… Read more »

David C. Kibbe, MD MBA
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Maggie and Nick: Thanks for this excellent post. You summarize the issues very well, and I think that we need to debate the physician payment issues in the sunshine of public discourse. For too long in the past this has been a behind-the-scenes process decided with zero public knowledge or input. I hope you’ll continue to write about the upcoming “war” between the primary care professionals and the subspecialists. Perhaps openness can keep it from getting to stupid and ugly! Regards, DCK