Are Doctors Shifting to the Left?

A recent story in the New York Times (As Physicians’ Jobs Change, So Do Their Politics) highlights the political shift underway within the physician community. While doctors used to be mainly male small businessmen, who were a natural fit with the Republican Party, they’re now much more likely to be female and employed by larger organizations. According to the Times, that’s making doctors more likely to be out of sync with the GOP, and the article cites examples from around the country. The American Medical Association came out in support of the Patient Protection and Affordable Care Act, which was a surprise to many. State medical societies find themselves increasingly allied with liberal activist groups, and even historically “red meat” issues like malpractice reform aren’t that big a deal for those whose malpractice premiums are paid by their employers.

It seems to me there’s an important facet missing from the article. When I was growing up in the 1970s, being a doctor was viewed as one of the surest ways for an ambitious person to make money. That started to change as the advent of managed care made medicine less lucrative and the explosion of the financial services industry provided opportunities to make a lot more money in investment banking, hedge funds, private equity and venture capital. As I observe my own generation and those somewhat younger than me, it seems that those intent on making a lot of money aren’t as drawn to the physician path.

My father in law, of blessed memory, used to compliment certain physicians by saying, “he’s not a money doctor.” That really boiled it down to the essence.

On the whole, younger doctors –and older ones who are sticking with the profession– seem to have the patients’ interest increasingly at heart. And that’s no bad thing.

David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma,  biotech, and medical devices. Formerly with BCG and LEK. He writes regularly at Health Business Blog, where this post first appeared.

44 replies »

  1. “Doctors” are not shifting left. Primary care is shifting left, because the Left has adopted them and is working hard to re-distribute (part of) the money from specialists to primary care. Why?

    The AMA accepted this Faustian bargain, because it looked like it had the promise of boats all around.

    Wait till the PCP’s notice the rhetoric has shifted from “we’ve decide the surgeons make too much and we are going to take it away” to “we have now decided to discuss YOUR income.”

  2. Yes, but I’d probably define sanity differently from you. I tend to trust people who work well in groups, who are socially conscious, who are team players, whose political biases are toward realizing individual well being by assuring collective well being, etc. These are values that I’m pretty sure mean nothing to you based on your name and your writings. You seem angry and alone. I like and trust people who are happy and connected. The original article pointed to how organizational shifts are changing the type of people who practice medicine, and from the perspective of this patient that seems all for the good. Certainly my experience in health IT tells me that team work is the trick when dealing with complex systems.

  3. I am still unconvinced re. the assertion that medicine incl. non procedural specialty care has become financially unattractive. Where are the hard facts, i.e. availability and compensation of finance jobs, and what the failure rate is (i.e. people who either do not stay in the field or are struck with unattractive compensation). The same applies for law. And yes, job security is a big deal, esp. these days.

    My personal belief is that these 1.5% owho make 300K+ are mostly “entrepreneurs”, people with inherited wealth and physicians. I think that the percentage of lawyers and finance people in this income strata is relatively slim (it may be a similar logic to smokers pointing out to the area healthy octogenerian to prove that smoking is OK). I do not know how to check this gut feeling (other than maybe getting country- and yacht club membership lists), input appreciated.

  4. The only primary care doctors earning less than 250k per year are the employee docs. Lok at any ED doc ad and do the math…$200 per hour times 2000 hours per year = a lot more than $100k.

    Only trouble is the remuneration is flat with a lot more work due to deadbeats getting care without paying; something about EMTALA, I think.

    “Specialists” like radiologists and nephrologists make north of one million per year. Didn’t used to be that way, but along came CT guided procedures that used to be done by surgeons. Same with cardiology. Everyone used to get CABG. Now they get PCTA and stenting.

    Technology shifted the bucks from one specialist to another.

    The average American doesn’t want my job, so they should not expect me to work for chump change. EMTALA expects me to work for free. That would be yur law, Jonathan, and your liberal friends.

  5. You have just hit a home run and don’t know it. You assume that the female employee is incented, but you show no mechanism through which that happens. But the old guy has an incentive to look for your ailment, to keep you from dying for real, which you plainly see and define as real incentive.

    Are you sane?

  6. Margalit –

    Matthew or Jonathan could probably speak to this more accurately because they’re in Kaiser’s backyard, but my understanding is that they pay their primary care docs at least 10% or so above the market average. Moreover, unlike many other large multi-specialty provider organizations, Kaiser doesn’t use any of the standard productivity metrics to evaluate their doctors’ performance. There was a time when Kaiser had a more significant cost advantage vs. its competitors than it has now. If there were a large cost advantage, it would be reflected in lower insurance premiums which would benefit members as well as their employers. It is possible that Kaiser has a cost advantage that could be offset if its membership is older and/or sicker than its competitors’. As I’ve noted before, insurers tell us that at the population level, people in the 55-64 age group use 5-7 times as much healthcare as people in their 20’s. Since Kaiser is probably the closest we have to an ACO on a massive scale, more granularity to help us understand what drives its costs and whether or not it has any significant advantages would be helpful.

  7. First, I am not certain that Kaiser is paying PCPs more, or using PCPs more than others, where the last P is for Physician not provider.
    Second, the problem with corporations and closed systems is that whatever savings are realized are not immediately obvious to consumers. This would not be the case for the traditional Medicare program.

  8. ”There is no risk of not having enough talented people being motivated to apply to medical school and become doctors to fill all the available med school slots.”

    Jonathan –

    What about the primary care residency slots? Don’t we need to attract a significant number of foreign born doctors to fill those?

    Also, you may have better data than I do but my understanding is that there are currently only about two applicants for every medical school opening. It was considerably higher in years past, no? At the undergraduate level, the most selective schools have from five openings for each spot to more than 10 at least 90% of whom could do the work if admitted.

    Medical school plus residency is a long hard slog compared to getting an MBA or a JD. The total package of intermediate to longer term earnings potential, job satisfaction and the time effort and money needed to acquire the necessary credentials to become a doctor vs. a businessman or a lawyer continues to tilt away from medicine. Continuing to squeeze provider payments and physician income will not help to rebalance that equation. That all said, maximizing the use of NP’s could help to alleviate the shortage of PCP’s. The notion that PCP’s could reduce the use of specialist care if they were paid more and had more time to spend with each patient suggests that the Kaiser model should be able to provide care at significantly lower cost than fee for service. Yet, it’s premiums in CA where it is most accepted and has its largest market share are not materially lower than its competitors’. Why is that?

  9. Primary care providers need experts to defend them in court. Until a defense can be successful with only primary care witnesses, there will be no change in the practice and cost of healthcare.

  10. I would reject your assertion that we are talking about “second-rate” professionals, when for example we might be discussing Nurse Practitioners, or perhaps a reemphasis on a level of physician training that does not involve specialty training or board certification.

    I think it is an important to ask whether the level and cost of medical education is appropriate to the intellectual and practical requirements of primary care. Might be, but my personal experience with NPs and PAs has all been positive, and there is a lot of economic self interest at play in physician objections to allowing people with these levels of training to perform various tasks and roles. I’m sure there are genuine concerns about competence mixed with economic self-interest, and figuring out what is going on is difficult.

    When we look at the economy from 30000 feet up and ask what activities should we reward with the highest salaries so as to optimize our economic growth and national well being, do we really think that we need as many of our best minds going into medicine?

    Isn’t it at least a reasonable question to ask whether we might be net better off tempting some of those minds into other fields, while offering lower salaries and lifetime income to other very smart people in the top 20% of intelligence and ability so that they will be incented to play some frontline roles in medicine?

    I think it’s a great question to ponder.

  11. They are available, and I’ve had only good experiences with them. Never bothers me to see an NP or a physician, so long as I’m being seen in a practice that functions as a team. In fact it was an NP, and not a physician, who first made a critical diagnosis for me, the only one I’ve ever had. Could have been a physician… but the NP took a little more time and probed a little more deeply than any physician I’ve ever seen.

    The main thing I’ve come to believe after years as a patient and as health information technology person is in well functioning systems of care, not individuals. See: http://www.newyorker.com/online/blogs/newsdesk/2011/05/atul-gawande-harvard-medical-school-commencement-address.html

  12. I often do. Never bothers me, so long as I’m being seen in a practice that functions as a team. In fact it was an NP, and not a physician, who first made a critical diagnosis for me, the only one I’ve ever had. Could have been a physician… but the NP took a little more time and probed a little more deeply than any physician I’ve ever seen. The main thing I’ve come to believe after years as a patient and as health information technology person is in well functioning systems of care, not individuals. See: http://www.newyorker.com/online/blogs/newsdesk/2011/05/atul-gawande-harvard-medical-school-commencement-address.html

  13. Barry, when you deal in vague generalizations like this, it is easy to retain false beliefs. There is no risk of not having enough talented people being motivated to apply to medical school and become doctors to fill all the available med school slots.

  14. Wow. that belief helps me to understand where you are coming from, though.

    Only about 1.5% of Americans make $300,000 or more. This is a lot of money to the average American, who makes about $32,000. Even the average American with a professional degree (includes docs and lawyers) “only” earns $100,000. Who doesn’t regard three times as much income as they are currently making “a lot” of money?

  15. “I don’t know that we even need the best and the brightest in primary care…”
    “…..as h/she evaluated my health and coordinated my care with specialists as needed.”

    Mike, how do you envision this system of treatment by specialists and traffic directing by second rate professionals, being any cheaper than what we have now?
    The big bucks are not currently spent on primary care, which is probably why we spend so much on unnecessary specialty care. I would prefer that the best of the best of the best…with honors, be in primary care and actually treat patients instead of handing out expensive referrals because time is short and reimbursement is low.
    Perhaps we need more primary care physicians to resume practicing at the top of their license as well.

  16. I think the issue of constrained or declining physician income mainly affects primary care doctors, pediatricians and the like. I don’t hear many dermatologists, radiologists, orthopods, etc. complaining that they’re underpaid. It’s quite obvious why a relatively small percentage of U.S. medical students opt to go into primary care. We could probably address the issue, at least in part, by paying somewhat more for E&M codes and less for procedures but the RUC remains dominated by specialists so significant progress is unlikely on that front.

  17. rbaer –

    I think Steve summed it up pretty well. Much of Wall Street pays very well. The same is true for the capital markets segment of commercial banks. There are lots of opportunities to make significant money in real estate, corporate law and the management positions track at large corporations. As Steve noted, the docs probably have a higher income floor and a lower ceiling, along with, I would say, better job security.

    As for primary care doctors, I think we will see more of their function at least supplemented and, in some cases, disrupted by nurse practitioners. Computer generated decision support tools that weren’t available a generation ago make it possible for NP’s to do a lot more now than they could then and they are comfortable following rules because they’re trained to be. They earn less money because they require less training.

    At a panel discussion I attended several years ago at the University of Pennsylvania and sponsored by its School of Nursing, one of their nursing experts claimed that an NP can handle 85% of what a PCP typically encounters. This person, who was raised in Denmark, commented that an NP in the U.S. has as much training as a PCP in Denmark. One of the many silver pebbles that will help us to mitigate the growth rate of healthcare costs will be to allow NP’s to practice at the top of their license. Opposition to this from the AMA is not helpful to put it kindly.

  18. Steve, the billionaires in finance probably number in the hundreds, at most. And we really don’t want more of that. The big bucks in finance these days is not coming from improving the liquidity and efficiency of markets, providing finance to industry, etc. It is coming from high stakes gambling where the ones who make money are those with better information about future outcomes and who arbitrage their way to success in win-lose bets, rather than win-win scenarios more common in traditional finance.

    Also, this income “ceiling” exists for almost anyone who works for a corporation, or on a contract fee basis.

  19. Barry, what are these “many” other attractive fields that pay “a lot” better, and how many budding or current physicians could really move into those fields?

    I don’t believe these higher-yield fields exist today in any numbers. Certainly not with respect to medical specialties that earn north of $300,000 a year. Yes, hedge funds pay better. Do you know how many people work in hedge funds? Way, way less than the 700,00 to 900,000 practicing physicians. And to get into the really high paying hedge funds and other financial industry positions, you already have to not only get your MBA but get it from a top school at the top of your class, and then it doesn’t hurt to have connections to boot. How many future physicians could really move into that field, or other highly lucrative fields?

    9 out of the top 10 occupations on the Forbes best paid list are physician specialties. The only one that isn’t is CEO, which was ranked last at #10. And CEO is not something you just become right out of school, unlike being a physician. How many 30 year-old CEOs of large companies are there? You don’t get to that status usually until your 50s, and that’s only if you play your cards right and have a bit of luck (assuming you don’t start your own business, which is far, far more precarious).

    There is a reason it is very difficult to get into medical school. The market speaks. Listen to what it is saying about the attractiveness of medicine as a profession.

  20. Nicely said, Mike.

    You know, somehow every other developed nation manages to get an adequate supply of physicians while paying about 1/2 to 2/3 as much as we do, and they don’t have worse quality in primary care or chronic disease care, in general.

    If we do pay less, we will have to change medical school substantially, because right now that is the supply choke point. They are both too expensive and graduate too few physicians.

  21. Well, it’s a good thing for most doctors’ quality of life. Isn’t that what’s driving the decline in hours worked: changing preferences for work-life balance?

    It does put an additional constraint on supply, that’s true. But I was just pointing out that the standard 80 hour work week is a myth (outside of residency), and it is getting to be more of a myth each year.

  22. Don’t mind if you own a boat, but I would not choose to be part of your boat financing scheme – the one that was implicit in the bargain for physicians graduating 20 years ago and is increasingly not part of the deal.

    I’d rather be treated on a routine basis by a physician who is an employee of a large organization and who is part of a team and whose idea of health includes the population as well as the individual. I would rather know that that physician had a balanced work and family life and was rested and happy with his/her job as h/she evaluated my health and coordinated my care with specialists as needed. In short almost nothing about what I consider to be a good primary care physician requires the kind of personality or intellectual chops or masochistic personality tendencies that are required to get into and through medical school. A good doctor probably becomes one in spite of all of those things, not because of them.

    I don’t know that we even need the best and the brightest in primary care, especially not as defined by ability to succeed in the GPA race. If we look at the areas where real technical creativity should be encouraged it is probably in engineering and research and technical specialties, not primary care.

  23. Tournament theory. Top grads have been going into the financial sector for quite a while. They make good salaries with a chance to make billions. Sort of true for law also. Medicine still pays very well, but there is a ceiling not seen in some other fields (granted the floor is substantially higher).

    The other part that many miss is not just total hours. How do you count call hours? If you take call from home for a weekend, how do you count those hours? Next, what about nights and weekends? How many other fields require that you be able to stay up 24 hours on a regular basis? Wake up and perform at top level for an emergency C-section or heart surgery within ten minutes? Intubate that 400 pounder?


  24. Barry, you usually know what you write about, but “There are too many other attractive fields that pay a lot better with less time and expense needed to acquire the requisite credentials and expertise”? , I think requires some examples and possibly references with regards to income levels. One reminder: residency is paid – not well, but sufficiently do have an OK life in most US metropolitan areas/cities.

  25. “There are too many other attractive fields that pay a lot better with less time and expense needed to acquire the requisite credentials and expertise. ”

    And there are all sorts of fields that pay a lot worse and require plenty of credentials. I know several best and brightest that are immersed in astrophysics and have no prospects in the area of boat acquisition.

    Considering the number of best and brightest that are routinely rejected from medical schools due to limited space, and considering the number of best and brightest that don’t even apply because of the perceived enormity of tuition fees, I would say that we have plenty of depth in the best and brightest department, even if medical education of certain types ceases to guarantee top 5% income status.

    And no matter how best and brightest they are, those who are finding it difficult to decide between managing hedge funds and medicine, should stick with hedge funds.

  26. Margalit –

    As I’m sure you must know, “best and brightest” is an expression that means smart and highly capable people. Nobody expects them all to go to medical school. However, given the time, effort and expense it takes to complete medical school and residency, there has to be a good financial return to justify the effort. There are too many other attractive fields that pay a lot better with less time and expense needed to acquire the requisite credentials and expertise. Sure doctors get lots of satisfaction from helping people stay healthy or recover from illness just as successful mutual fund managers get lots of satisfaction from helping ordinary people to achieve their financial goals. Doctors need to be paid well enough to attract good people to and then hold them in the medical profession. If they’re not, we will no longer attract a satisfactory share of the best and brightest to become doctors. If doctors in other countries are satisfied to work for a middle class wage, it’s irrelevant. Cultures, values and priorities are different from one country to another. They are what they are.

  27. OK, I am going to commit blasphemy here.

    What does “best and brightest” mean? Is there one uniform set of “best and brightest” and should they all go to medical school?
    Aren’t those math wiz kids that choose to go somewhere else because medicine may not be where they can make the most money really a loss to the profession and to the public?

  28. I still have two weddings and another college education to go (total of four), after private secondary school for my fourth child. I have a boat. I see it four or five times a year. A little boat. I have been doing this for 29 years. My income has been flat for the last 5 or 6 years because of squeezing payments with rising costs and the shrinking dollar. Pay me in 1999 dollars and I will be fine. Pay me in 2012 dollars and I won’t be fine

    If you think you can pay me less you are wrong. I will not do it..

  29. I would be happy with the respect and deference to which I am professionally due. I already own a nice kayak.

  30. Why shouldn’t a doctor own a boat? In America the best and brightest are always going to make a very good living. Do we want them in health care or doing something else?

    Right now the best and brightest are choosing other careers. Do expect that to somehow change for the better if we keep slashing physician pay? Fairly soon, when the Boomers retire, we will see how just thin the health care talent pool is getting. The smart kids are choosing computer science, finance and engineering careers (or HMO, Hospital or Pharma executive positions, of course) instead of medicine. I don’t blame them one bit.

    More boats for doctors may lead to more good doctors!!!

  31. Jonathan, I admit that the 80 hours was for “illustrative” purposes only….
    I am not sure why this decrease in hours worked is a good thing. The JAMA article expressed some concern regarding this trend…..

    I would not oppose the anti fee for service drum beating if there was any widely applicable evidence that it can cut costs while maintaining quality (not even asking for better quality).

  32. Margalit, I appreciate your attempts to stem the anti-fee-for-service tide, but 80 hour weeks are “what you do when you’re a doctor?”

    How about 45-61 hours: http://www.medfriends.org/specialty_hours_worked.htm

    Or here: http://jama.ama-assn.org/content/303/8/747.full

    Money quote: “After remaining stable through the early 1990s, mean hours worked per week decreased by 7.2% between 1996 and 2008 among all physicians (from 54.9 hours per week in 1996-1998 to 51.0 hours per week in 2006-2008; 95% confidence interval [CI], 5.3%-9.0%; P < .001)."

  33. And I’ll take one of those old guys (gals) who doesn’t have a boat, never had a boat and never will have a boat, because he works 80 hour weeks, because that’s what you do when you’re a doctor, not to mention that he has no money for boats if he’s a PCP.

    And they are not becoming “cogs in a government-directed machine bureaucracy”. They are indeed becoming cogs in “large institutional settings”, some of which are already for-profit and others which are bound to evolve into for-profit, and all are there to maximize revenue from managing the panel of which you are a part.
    I know CMS is trying hard to inject quality considerations into its new initiatives, but Shared Savings is what it is and if the money doesn’t look promising there won’t be any interest.

    I do agree that volume will decrease though, because when you are part of a semi-monopolistic health system, there are better ways to increase profits than just working more hours.

  34. It’s certainly true that major social shifts are taking place as physicians move away from small private practice (small business) to large group practice, health systems and other organizations. It isn’t just a right/left thing, but just as important it is likely to mean less of a volume-based approach.

    We all know about the difference in incentives from being paid fee for service vs. capitation or salary. But there is another big difference that a physician taught me once. The physician is the owner of the practice who gets paid out of the practice equity. That means he gets paid after the set costs and after those with a salary or hourly wage get paid. In a good year, he gets almost all the “extra” money, and in a bad year he takes most of the hit (assuming the operational costs are pretty close to constant).

    To put it in numbers: If the practice revenue is $1,000,000 and all the salaries, taxes and other overhead is $900,000, then the physician earns $100,000 that year. But if the practice revenue is $1,100,000 the physician gets almost all of that extra money as his own income, or about $200,000. So, a 10% increase in total revenue can mean a 100% increase in what the physician takes home! Physicians in small practices are therefore even more sensitive at the margin to keeping the volume high than you would guess, if you just knew they were paid fee for service. Physician income is non-linear in a small practice setting.

    And of course, volume here has nothing to do with quality. A lot of unnecessary care doesn’t harm patients, so they don’t notice. You can be a physician who doesn’t want to harm your patients and also does want to make a lot of money, and easily justify loads of unnecessary care if you are also a small businessman who makes a disproportionate amount of money at the margins where the volume is highest (up to a point: docs get exhausted, too).

    John Graham’s rejoinder is misplaced. We are not dealing in the a priori; we are dealing in the a posteriori of human psychology. You can desire both health and money, true. Sometimes they are entirely compatible, but sometimes they are not. When push comes to shove you must make trade-offs, and the more you want money the more you will be willing to sacrifice your patients’ health to attain it. It doesn’t have to take the form of knowingly causing harm. In fact, it rarely does. Much more likely is that it takes the form of not doing due diligence to make sure that the new drug or hi-tech technique being recommended to the patient is safe (and the risks are adequately presented to the patient) compared to less remunerative alternatives. That is a general point about rationality and the prioritization of desire. Specific instances are well known to all of us who’ve been paying attention the last 20 years.

    As for the lamentation about doctors working as “cogs in a government-directed machine bureaucracy,” is it OK when that bureaucracy is the military? If this article were about doctors getting more conservative as they shifted to larger institutional settings, would you be praising the discipline, hierarchical order and fiscal soundness imposed by enterprises successful enough to grow so large?

  35. I’ll take one of those fancy new female employee doctors who is incented to optimize the health of her patient panel, of which I am one part, over an old guy whose next boat payment depends on finding some problem that has an expensive procedure to bill the insurance company for… any day.

    Just sayin’.

  36. How does Mr. Williams assert a negative correlation between a desire to make money and a desire to help patients? I can see no a priori reason why there’d be any connection one way or the other.

    When I read the NYT article, I thought it was a shame that these doctors wanted to be cogs in a government-directed machine bureaucracy, instead of working for themselves.

    Aren’t doctors continuously lobby for higher Medicare fees? Aren’t they already compaining that they won’t get paid enough under ACOs and value-based purchasing? Sure they are.

    Perhaps policies are just attracting the kind of doctors who are more comfortable with supporting lobbying for more payment than actually demonstrating value to paying patients. I hope not.

    On the other hand, I suppose that it is unfeasible for most to work for themselves, because third-party payers have dominated health care for year, making self-emloyment increasingly impossible.