Physicians

Are Doctors Paid Too Much? Behind Medicine’s Nasty Little PR Problem

Screen Shot 2014-06-20 at 11.28.40 AMOn the front page of last Tuesday’s Wall Street Journal was this headline:  “Taxpayers Foot Big Bills from Handful of Doctors.” It is a two-page story about a clinician whose practice drew attention from the WSJ research team that combed through the recently released Medicare Utilization and Payment database released in April. They wrote:

“Ronald S. Weaver isn’t a cardiologist. Yet 98% of the $2.3 million that the Los Angeles doctor’s practice received from Medicare in 2012 was for a cardiac procedure, according to recently released government data…The government data show that out of the thousands of cardiology providers who treated Medicare patients in 2012, just 239 billed for the procedure, and they used it on fewer than 5% of their patients. The 141 cardiologists at the Cleveland Clinic, renowned for its heart care, performed it on only 6 patients last year. Dr. Weaver’s clinic administered it to 99.5% of his Medicare patients…”

Lets face it: curiosity about what other people earn is a national pastime. Pro golfers qualify for their tournaments based on their publicly accessible official winnings. NFL agents bargain for their clients based on position-specific compensation comparables. We are frequently reminded that members of Congress “officially” earn $174,000 plus attractive perks, and of late, executive compensation for most of America’s public companies has become a major focus for Board Compensation Committee’s who are being pushed by shareholders to reign in their generous comp packages. So it’s understandable that physicians bristle at stories like this one. We would as well if in their shoes.

Here’s why the story is particularly challenging for the medical profession:

1-Physician income is high relative to what most American’s earn. Though wide-ranging across the various specialties in medical practice, the ratio of physician income to the median income in the U.S. ($51,324) is from a low of 3.6:1 for family practice to 13.9:1 for the highest earning clinicians in radiology, orthopedics and others (and that does not include their income from ownership in surgery centers, testing facilities and other services). Physicians think they deserve to be paid more than any other profession, reasoning theirs is a higher calling, their debt higher (averaging $170,000 for the 86% that borrow for medical school) and their training and expertise more valuable to society than others. Stories like this draw attention to how much physicians “might” earn and lend to suspicions that belly-aching by some in their ranks claiming they earn too little is more about greed than the greater good. Income potential is important to everyone: physicians want to earn as much as they can, and keep score against their peers and other high-earning professions. Many feel underpaid; some indeed are. But relative to what’s made in the vast majority of households, they are well paid.

2- Physicians practice in a high profile industry and the spotlight is getting brighter. It’s 17% of our GDP, 28% of the federal budget, 34% of a state’s budget, and 9% of household discretionary spending. It impacts every one every day—in the costs of what we buy, in the ways our wages are set and in the intense political debate about health reforms to keep Medicare solvent, increase access to affordable insurance and holding down costs. The release of the Medicare Utilization and Payment Database represents another layer of transparency about physician behavior that’s accelerating at warp speed. Aptly, the Wall Street Journal’s story about Dr. Weaver’s practice is part of its series “Secrets of the System” dating back 3 years. USA Today calls its current series “Medication Generation” and Elizabeth Rosenthal’s New York Times series “Healthcare’s Road to Ruin” are prominent in top tier coverage, not to mention the blogosphere and social media fascination with healthcare’s complexities, conflicts, deals and personalities. What physicians do and how much they earn is part of the new normal in healthcare wherein transparency is an end in itself.

3-Physicians and other stakeholders in the system have inadequately addressed the issue of medical necessity in the profession. Medical necessity is a tricky issue. It presumes a binary assessment about a possible treatment: either it works or not. But it’s not that simple: the signs, symptoms, risk factors and co-morbidities that factor into a diagnosis or treatment recommendation are complex. Evidence is scant for some treatments. And the data upon which the determination of “what works best and how much” is rarely accessible to a practicing physician for two reasons: 1-most physicians don’t have hard data about their practice patterns, outcomes and alignment with evidence-based practices due to the costs of these systems and 2-they believe outsiders—especially health insurers– have no legitimate standing in the important discussion of medical necessity. If adherence to evidence-based healthcare was the focal point for the profession, disclosures about each physician’s adherence to evidence-based practices, outcomes, and patient experiences would be readily accessible today. Disciplinary actions against physicians who abuse would be higher and hospital privileges yanked faster. And for sure, insurers would be quicker to drop them. But that’s not the case.  If unnecessary tests, surgery and medications represent 30% of unnecessary health spending in the U.S. per Dartmouth, attention to a remedy by the profession and by the rest of the stakeholders is not readily evident: for sure, it needs to involve liability reform, but much more. For many clinicians, fear of being sued is merely an excuse to practice medicine as they choose with limited accountability to their patients, payers and peers for medically necessary care. It’s an issue the profession must face head-on.

The bottom line: The presumption that a physician might practice with unfettered autonomy and protected privacy is a legacy of a by-gone era. Modern medical professionals understand the profession’s changing. They acknowledge they practice in the spotlight and know their reputation is increasingly dependent on  “hard data” about their clinical practice patterns and outcomes preferred by health insurers, employers and individuals.

Schools of Medicine face a daunting task of implementing reforms that equip their grads to practice in the new normal. Teaching hospitals face incredible responsibility to immerse residents in clinical practice that’s consistent with technology-enabled, team-based care management. Medical groups and health systems face responsibility and risk to measure the performance of their affiliated physicians and weed out bad actors prone to unnecessary care.

Most physicians love the practice of medicine. They resent intrusion by outsiders of any stripe—media, insurers, administrators, and even their peers. Physicians are understandably frustrated by stories that paint the profession unfavorably. Like any profession, there are bad apples. But medicine, whether they like it or not, is in a uniquely sensitive spotlight that’s likely to grow brighter.

 

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Mark GWilliam Palmer MDsteveNot a ProviderSJ Motew,MD Recent comment authors
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William Palmer MD
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William Palmer MD

What we make is controlled by fee schedules that others have created. Those of us who make the most can’t control volume ( radiologists,radiation oncologists, ophthalmologists) as they are referred to, not referrers, and pretty much have to work with patients who are sent to them. It’s the design of the RVSs and the poor screens by the payers, along with some physician corruption–more or less than other occupations?–that allows some of us to make a lot. Everyone in this health care culture makes a lot….from the housekeepers to the nurses to the administrators., insurers and investors. We all want… Read more »

Not a Provider
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Not a Provider

Hmmm. What has price fixing done in UK? The proportion of foreign nationals increases for professionally qualified clinical staff (14%) and even more so for doctors (26%), prompting the British Medical Association (BMA) to observe that without the contribution of non-British staff, “many NHS services would struggle to provide effective care to their patients”.

We have a free market and save the economic uncertainty of the last decade, we would see the same erosion of US healthcare.

steve
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steve

22% of US docs are foreign trained IIRC.

Steve

SJ Motew,MD
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SJ Motew,MD

The perception, and in many cases reality is that physicians unfortunately too frequently fail to visibly deliver on the value proposition to their patients. Hence, if the public fails to clearly identify the value of the services being purchased, then physician compensation will seem mismatched. The principle “consumers” of healthcare, being both patients and payers, are noticing that the assumed quality, access, service and outcomes are not delivered on a consistent basis. Recent measurements such as international rankings of cost and health outcomes as well as patients’ actual experience further reinforce the value gap. If we as healthcare providers can… Read more »

Bob Hertz
Guest

Most national health plans still rely on some version of fee for service.

But the fees are much lower to begin with for most cardiac procedures.

And if there is a “run” on certain procedures, the fees ratchet down very quickly.

If CMS were to simply slash all cardiac fees down to $5,000 or $10,000 per procedure, leaving out transplants and multi-vessel repair, I doubt that America would be worse off.

MD as HELL
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MD as HELL

A Medicare patient with a trimalleolar ankle fracture needing surgery is NOT seen by two different orthopedic surgeons at two different hospitals as an opportunity to: a. practice medicine and take care of the patient, and, b. an opportunity to bill and get paid for the service. This tells me there is not enough profit motive in the specialty of orthopedics. Right or wrong, the market rate for the service must be higher than that offered by Medicare, at least for after hours emergency coverage when it is not your hospital calling and not your EMTALA obligation. Short version: docs… Read more »

SouthernDoc
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SouthernDoc

Most people believe that high school teachers don’t make enough money, and few believe that doctors should make more. Believe it or not, doctors make 3 cents less per hour than high school teachers over the course of their career…

http://www.bestmedicaldegrees.com/salary-of-doctors/

allan
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allan

Uwe Reinhardt Princeton’s Madison professor of economics who I don’t believe to be a friend of fee for service medicine said it best when he responded to a NYTimes article. ” What Doctors Make, and Why Published: August 5, 2007 To the Editor: In ”Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid. A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited. Any… Read more »

Mark G
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Mark G

So if we just paid doctors more, they wouldn’t overtreat with dubious therapies that don’t optimally address the root causes of the ills of their patients? Perhaps you are on to something Dr. R.

Saurabh Jha
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Saurabh Jha

Aneurin Bevan, the founder of NHS, that great bastion of collectivism, altruism and self sacrifice, when asked how he persuaded the British Medical Association on board, he is reported to have said “I stuffed their mouths full of goal.” Doctors pay does not reflect their greater calling, otherwise priests ought to be millionaires, or some bizarre idea of fairness. It’s a reflection of opportunity costs. The fact that many physicians would advise others not to go in to medicine, or perhaps would not go through the whole process again if they knew then what they know now, means that we… Read more »

Saurabh Jha
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Saurabh Jha

typo

““I stuffed their mouths full of GOLD.”

Ryan
Guest
Ryan

World Cup Freudian slip…

Saurabh Jha
Guest
Saurabh Jha

Damn! I’ve been revealed!

Talos
Guest
Talos

I believe that you have mistitled your article “Medicine’s Nasty Little PR problem” as the evidence you presented suggests a better title: “Medicare’s Nasty Huge Data Review and Billing Problems.” The fact that a non-cardiologist could bill and get paid over and over again for a little-used cardiac procedure shows the flaws in a billing system. When the overall payment system is constructed as fee-for-service, reasonable people expect others to try to cheat the system and build in technology to assist to identifier outliers. There does not appear to be enough reasonable people at Medicare billing based on the stories… Read more »

LeoHolmMD
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LeoHolmMD

Right. The big story is how does a huge organization like CMS get hood winked so easily? They have tons of admin and auditors. Are they inept, stupid, aloof? Why do they need the “public’s help” understanding their own data? Why are they the largest purchaser of fraud in all the payer systems?

Charles Kenney
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Charles Kenney

Physicians are generally very well paid and should be — for obvious reasons. My concern is that in spite of high rates of compensation many physicians say they feel burned out and have low levels of professional satisfaction. How can we as a nation achieve the kind of access, quality, equity and affordability to which we aspire with so many doctors feeling a sense of alienation about their professional lives? One of the most patient-centered things we can do is to recognize the root causes of the doctor crisis and take steps to fix it. This is not rocket science.… Read more »

Datum
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Datum

You reveal your bias with statements … Physicians think they deserve to be paid more than any other profession, reasoning theirs is a higher calling, their debt higher (averaging $170,000 for the 86% that borrow for medical school) and their training and expertise more valuable to society than others. You present no evidence for this assertion, nor does any exist. I assume you are auditioning for a spot on Fox News. Physicians want to be paid a fair wage. Some are greedy. Others are less avarious. For many clinicians, fear of being sued is merely an excuse to practice medicine… Read more »

Ryan Gamlin
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Ryan Gamlin

The analysis of doctor’s wages against US median wage is spurious – the median US worker does not have 4 years of postgraduate education and 3-7 years of wage-limited apprenticeship afterwards.

(The median US adult does not even have a 4 year college degree: https://www.census.gov/hhes/socdemo/education/data/cps/2013/tables.html)