Holier Than Thou Doctors

flying cadeuciiI can recall it like yesterday.  It was 2004, and I had become the CEO of Blue Cross & Blue Shield of Rhode Island.  I was in the middle of my annual physical with my long-standing primary care physician, Dr. Richard Reiter (true).  Dick Reiter is my age and is an old school doc.  He caught my cancer before it got too serious, and had been yelling at me about things like cholesterol, stress, and exercise for years.

During a lull in the exam, I turned to him and asked, “Dick, I’m the CEO of Blue Cross.  What do I need to know?”  He paused, looking down.  Then his cheek started to twitch.  I actually saw him lose his temper for the first time in 25 plus years.  “Jim, you want straight?  What the bleep are you doing to us?  A monkey can do a colonoscopy and yet they make four times what we primary care doctors make.  What you are doing is a disgrace.”  He was some pissed!!

I then had lunch with Dr. Al Puerini, a highly regarded PCP of 30 years with a full practice.  I asked him how much he netted before taxes, and when he told me, I was appalled.  He made some aside about it not being about the money, but it IS in part about the money.  He also told me about how difficult it was to recruit new PCPs in RI.

Those two encounters started me down my path of alarm about the future of primary care.  Rhode Island is a small (40×30 mile, one million population) microcosm of the country.  While we have our accents and quirks, and people still think we’re overrun by the mafia, we’re not all that much different.  Just wicked smaller.  Our PCP population was aging and shrinking rapidly.  The best and brightest from Brown Med School and others of its ilk were decidedly not swarming into primary care.  Practices could not recruit new members.  We were, and still are, in a crisis that is nation-wide.

And it didn’t stop with just the poor PCP reimbursement.  PCPs cannot survive financially without untoward volume.  This has all sorts of negative consequences.  Moreover, on the totem pole of respect, PCPs do not seem to rank high for reasons that I simply cannot fathom.  It seems that the more “miracle machines” a physician uses, the more respect he or she gets.  While the poor PCP does what we in the billing world refer to as “E&M” (Evaluative and Maintenance).  The look-you-in-the-eye, known-you-for-years sort of thing.  In other words, taking basic tests and extrapolating health trajectories.  Wading into gray areas.  Knowing the patient and her family, and making informed prognoses.  All difficult stuff.  Not something that shows up on an LED screen.  Ahhhh….judgment and perspective.

A little aside.  It seems as if politicians, the media, and even participants cannot help but to “cartoonize” the players in healthcare.  Obama and Pelosi did it as a way to get passage of the ACA.  I mean, when the President calls you “evil,” it does smart a bit.  And during my tenure as CEO of a health insurer, I was accused of many things that were rather startling to my family who thought they’d known me better.

Even today when I write articles for THCB and others that are in any way critical of physicians, I get the usual angry knee-jerk response from physicians who absolutely must believe that I have no understanding of the value of physicians and the pressures they operate under.

But my story continues.  Energized to do something on a number of fronts regarding primary care, I called a meeting of my rating group (you know, the actuarial, underwriting, sales, provider “relations”) and I ask them to explain to me why PCP reimbursement was so low.  A variety of non responsive responses were given, and I ended up concluding that it was because we could.  We could keep PCP reimbursement low because most PCPs (at least then) were onesies and twosies with no negotiating leverage, while specialists tended to group together to share “machines” and gain clout.  Sigh.

So then, armed with the knowledge of what PCPs were paid in Massachusetts, our richer neighbor just to the north, I announced that we would achieve “parity” in four years, parity being defined as keeping up with the current Massachusetts PCP rate for E&M codes.  That required us to increase what we paid PCPs almost 50% over four years to cover the historical difference plus ongoing increases.

The pushback I got from my staff was startling.  “That will make us uncompetitive.”  “That is too inflationary.”  “Our job is to keep fees as low as we can so that our premiums are as low as possible.”  Etc.

Finally, having had it with all the negativity, I ordered the trusted actuary who I’d worked with as outside counsel in rate cases for decades to tell me what the impact of such an increase (50%) would be on overall premiums.  The result?  Less than 1%!!!  The moral?  Office visits NEVER break the bank.

Well, we reached parity with Massachusetts after five years (yeah, I know).  We also did major funding, technology grants, nurse practitioner hires, etc., for PCP patient centered medical homes.  While I know there is some controversy about how well PCMHs have done, I remain optimistic, just as I do with ACOs.  And lastly, we funded a loan forgiveness program for PCPs entering their practice in RI.

How much did it help?  Some, I think.  Are PCPs happy today?  In Rhode Island, I think a bit more today.  We have two large practice groups which seem to be thriving, and some smaller regional (if you can use that term for RI) groups who appear to be doing well.  Linkages with hospital systems seem to be taking place.  [About time.]

Yet, unless we can relieve PCPs from the burden of volume, we are destined to have disenchanted, angry, and burnt out PCPs.  The problem is so bad that even YouTube has something on it.

And so, with a dwindling PCP population and ever increasing numbers of newly insureds as a result of the ACA, clearly there is a need.  Likewise, with the aging of the Boomers, we will see more and more patients with 3 or more chronic conditions.  There will always be a need for the PCP, the one who sits face to face with the patient and his family and counsels.  And while nurse practitioners can carry much of the load (I use a NP as my PCP with the VA, but that’s another story for another day), they cannot replace the PCP MD.

Insurers are to a significant extent to blame.  Stephen Schimpff, MD, has run a series of incisive articles on the subject and a book.   It would be well to heed his warnings.  He largely blames payors, and concludes that neither insurers nor the government can (will?) change the current situation.  His primary (so to speak) observation is that we’ve required PCPs to allot too little time per visit to truly be evaluative.  When one has to see 25 patients a day to earn a decent living, one has to cut corners and overuse specialists, with cost consequences.  I would hope that insurers and the federal government both can take steps to change all of this.

There have been articles on THCB on this subject in the past.  As this blog ends, I challenge other contributors to THCB to develop ideas on how we can invigorate primary care and get med schools to produce more top flight physicians who enthusiastically opt for primary care.  This is an almost holy mission, and hence my tongue in cheek title for this blog.

Perhaps Andy Slavitt might have a few words to share with us.  He seems to share my views about primary care.  Actually everyone does, but that hasn’t seemed to have made enough of a difference….yet.

51 replies »

  1. Excuse me. Achieved parity with the miserable pay of other PCPs? What, we should thank this man? Give me parity with the ophthalmologist who will get, himself, $1,000 for a 15 min.operation that takes roughly the skill of shelling out a sebaceous cyst for which I get 70.00. Or of the orthopod 50 min from here who get $1,000,000.00 a year.

  2. Jim, I believe you. I think our problems lie in the fact that we rely too much on government and not enough upon ourselves and those we directly deal with. I am sure in a free market where a level playing field exists (reasonable regulation can exist well) you as an insurer can deal with doctors, hospitals, and patients to get the best value for the dollar. That would require utilizing insurance as insurance instead of as an entitlement. I think we both recognize the existence of those that fall through the cracks and may require additional help, but that help shouldn’t exist in a form that destroys the fundamentals behind insurance.

  3. I accept the fact that I will never truly know what a physician experiences. My respect for physicians is actually enormous. Yet, we posit and opine, and sometimes are right, sometimes are wrong. I learn each time. Thank you for reminding me.

  4. “ Denial of treatment as a profit center. C’mon. That was 90’s. ”

    Then you haven’t learned how to understand the incentives that exist or perhaps you don’t even recognize what they are. I’ve seen and worked with them so I have an understanding from ground zero. From your lofty position perhaps you should refocus your telescope.

    AMA: “Now to change that.” That is not happening anywhere soon. Take a look at the very old suit against the AMA by its own members. Then take a look at what generates money for the AMA.

    Mandates. You are on track in hating them

    “Physicians as agents of insurer? You’re kidding me.” You really don’t know…? I would have thought you had a better handle on the situation. You are wrong. He who pays the piper calls the tune.

    “Talk to my wife.” I didn’t call you an “intellectual”. Those setting policies and coming from academia are the intellectuals that have brought us managed care, EHR’s, ACO’s etc. I’ll talk to your wife, though.

    I look at a patient as a patient and on the business side as a patient consumer that remains the patient. The patient should prevail and I think most doctors believe that as well. You can believe what you wish, but I already note a degree of naiveté in your thinking.

    I don’t knee jerk. I have no gripe against insurers. Take note of several of my statements to you. In fact take note of this last one where my first words were “I don’t blame the insurers.”.

    I just believe that being a lawyer and an insurer doesn’t make you a doctor. You have familiarity, but that is not sufficient and is demonstrated by some of your comments.

  5. Woof: In response:

    Denial of treatment as a profit center. C’mon. That was 90’s. The right care at the right time in the right location is what it’s about. You exhibit your ignorance here. Sorry.

    AMA: I accept that. Now to change that.

    Mandates? I hate ’em. Heavy handed way of anectdotally driven medicine.

    Physicians as agents of insurer? You’re kidding me.

    Organic growth vs. intellectuals: you really think I’m an intellectual. Talk to my wife.

    I did write that. It’s still true. That simply reflects that physicians do not think much about their patients as customers. This really has to change for more reasons than I can write here.

    I wish to be enlightened, but with two exceptions above, you fit perfectly within the mold of doctors who knee jerk react to me because of what I formerly did rather than my ideas.

  6. Mark, let’s chat. I’d like to hear your experience and throw it up against mine. I’ve been away frm RI for 5 years, and I know some of my initiatives did not last long. But aside from your ennui, focus on what’s wrong (you do), but also help me with what I do about it. I still regularly talk with the two Als (Purerini and Kurose).

  7. Well for Medicare, CMS basically sets the rates or invokes MACRA or MIPS to tell docs what they will pay them and how. Most insurers will contract with docs individually or “provider groups” for discounted fees based on the promise of increased patient on their panels. Societies like the AMA and ACP, do very little to help docs negotiate fair fees.

  8. I think a more appropriate title of the piece would be “Holier than Thou Insurers”. Yes, I am being a bit snarky, but the insurers hold many of the power cards and while they are sometimes motivated by good (or even holy) intentions, it seldom works out well. I do think Jim Purcell’s contributions are very helpful, shedding light on the perspective of insurers.

  9. Yes, and governments negotiate on behalf of property tax payers for a COLLECTIVE agreement. I’m not sure how physician reimbursement is negotiated between Medicare, various insurance companies and hospitals and groups and hospital linkages – and with the RUC thrown in for good measure.

    When a union contract is negotiated all members receive the same contract, not so for health care. I don’t see anyone, except maybe Medicare negotiating for premium payers. Certainly insurance companies don’t care as they just pass on the extra premium. The system is so disjointed that there is no transparency or consistency.

  10. I wonder what firefighters or police would get paid if they could set their own wages and what justifications they would make?

  11. Yea, I’m sorry. While you might “get it,” I’m not sure what good you actually did. As a recent residency graduate, starting salaries in Massachusetts are still 15-25% higher than anywhere in RI. RI is still in the bottom 5 of states for PCP reimbursement. And this PCMH nonsense was apparently heralded into the RI healthcare climate by folks like you. There are virtually no composite studies showing PCMH has any real effect on outcomes or cost. And any small difference it may have are completely negated by continuing to rely on 7.5 minute physician visits and the ~$100k price tag per provider to even qualify… causing docs to see even more patients per day to cover the increased overhead. Now the RI insurance commissioner is actually requiring the insurance companies to have a certain percentage of their covered lives in a PCMH… it is lunacy. As the only DPC practice in RI, with fantastic reception and results, thanks for helping to promote a system that both physicians and patients are running away from.

  12. Thank you. You are correct the class warfare between physicians is the wrong debate to be having. Specialists should be defending PCP’s and PCP’s should be defending specialists.

    I cannot explain Peter’s reference to a firefighter and it is completely irrelevant. However, PCP’s tend to undervalue themselves and he might be doing just that. The neurosurgeon would be right to roll his eyes.

    DPC has a role, without question, in the future. My concern is that the dreadful Bob Doherty’s of the world (ACP) are laying the groundwork to label DPC’s unethical. Physicians keep getting led around by the nose instead of strategizing, committing and then moving forward as one group to enact change.

    If we are going to commit to DPC’s as the future model to deliver primary care to the masses, then we need to help others along the way and prevent lobbyists from marginalizing those going out to start DPC practices. I do think we will end up with higher deductible plans for coverage of catastrophic events with DPC clinics covering the basics otherwise.

    After reading comments this morning, I took a poll of my Medicaid patients. 60% came in drinking Starbucks coffee and the cell phone bills for mothers ranged between $125-$200 per month. They could afford DPC with subscription of $50-100 per month.

    Our main hurdle will be to change the way the population looks at and values their health care. No longer will it be free. We are providing a service and the expertise involved has worth and therefore a price. Maybe that is the game-changing strategy?

  13. James Purcell, I don’t blame the insurers. Their job is to make money for the stockholder. I blame those that make the rules and the insurers who actually use their money and power to influence those rules causing many of the problems we see today. I was a PCP with a subspecialty, but preferred total patient contact rather than dealing with one picture at a time, one dead organ or one live organ. PCP is very rewarding until you guys enter the picture and tell me that I have to write notes on a computer in your bureaucratic fashion rather than write them in the fashion of a doctor or anyone else that has to deal with similar thinking problems. Different jobs require a different type of thinking. [Gary Klein Sources of Power: How People Make Decisions].

    The root of the problem, however, is the one that brings us into this mess, third party payer, and too much government interference. Third party payer has distorted the payment mechanism destroying value in the process. Ending third party payer doesn’t end insurance or even plans offered by employers. It only means that the tax deduction (if one exists) ends up in the individual’s hand who can purchase insurance privately, from the insurer or not at all. It also doesn’t end subsidies or safety nets which need to be discussed in a different manner.

    Where you might go wrong (at least in my opinion):

    You might have a collectivist attitude. That means that denial of needed treatment can end up being a profit center as long as not too many people find out.

    You might errantly believe that the AMA represents the physician in the trenches. It doesn’t. It might represent academics and politicians, but it really represents its own existence.

    You might think mandates work in a free society.

    You might think physicians are the agents of the insurer rather than agents of the patient.

    You might think organic growth can’t possibly work better than a set of intellectuals setting specific policies.

    You might believe that blaming the doctor is the easiest route to take to meet your goals. I remember the negative tone of one of your blog pieces with the following quote “That world circles around the physician rather than the patient.”

    There are plenty more possibilities, but this is enough for a starter. Take note, these are only possibilities that upon enlightenment might reveal that the comment or comments don’t apply to you.

  14. Anish,

    I was just made aware today of a 13 page paper published in Harvard Business Review by Michael E. Porter and Robert S. Kaplan titled “How to Pay for Healthcare.” Their argument is that the best way to create the incentives that would deliver high quality care in the most cost-effective way is through bundled payments. They argue that traditional fee for service is too inefficient and uncoordinated while capitation creates incentives to undertreat patients. I had to submit some personal information (email address, occupation, etc.) to get access to the paper but I hope the link below will give any THCB readers who want to read it access to it.


    I would love to get some reaction from the physician readers on THCB as well as from Jim Purcell for the insurance perspective. I thought the authors’ arguments have considerable merit as long as we can continue to make strides in addressing some of the current limitations including more precisely quantifying costs, addressing payment challenges on the insurer side, defining healthcare quality, differentiating payments for patient complexity and the like.

  15. Peter- thanks for the data from 1981. Here’s the CMS data from 2014 for those interested. . Link to the full article here: http://content.healthaffairs.org/content/early/2015/11/25/hlthaff.2015.1194.full

    Regarding physician and clinical services price growth:
    “For physician and clinical services, growth in both price and nonprice factors, such as residual use and intensity, accelerated in 2014 compared to 2013. Prices increased 0.5 percent in 2014 (up slightly from growth of 0.1 percent in 2013), influenced in part by a Medicare physician payment update of 0.5 percent compared to an update of 0.0 percent in 2013. Nonprice factors also grew faster in 2014—driven, in part, by coverage expansions resulting from the ACA, particularly for Medicaid.”

    Conclusion of the CMS economists :

    “The expansion of insurance coverage, particularly through Medicaid and private health insurance, and rapid growth in retail prescription drug spending fueled a 5.3 percent increase in total national health care expenditures in 2014. This increase compares to historically low health spending growth from 2009 to 2013, when growth averaged only 3.7 percent. Health expenditures grew faster than the overall economy in 2014, as the GDP increased 4.1 percent. As a result, the health spending share of GDP increased from 17.3 percent in 2013 to 17.5 percent in 2014. The return to faster growth and an increased share of GDP in 2014 was largely influenced by the coverage expansions of the Affordable Care Act.”

    The lesson should be that If you want to have a real conversation about bending the cost curve – we can’t just expand insurance coverage without working on the unit price of health care costs. While physician income is part of that unit cost of healthcare, I leave you with the words of Adam Smith (brought to my attention by the princeton economist Uwe Reinhardt)

    “We trust our health to the physician: our fortune and sometimes our life and reputation to the lawyer and attorney. Such confidence could not safely be reposed in people of a very mean or low condition. Their reward must be such, therefore, as may give them that rank in the society which so important a trust requires. The long time and the great expense which must be laid out in their education, when combined with this circumstance, necessarily enhance still further the price of their labour.”

  16. Is Peter a physician? I would be surprised based on what’s in his comments – but I am wrong 50% of the time. Niran, I have no beef with you – a primary care physician is a part of my practice and is integral, and on most days does far more effective work than I do. Perhaps an engaged pcp would have been able to avoid the hip replacement all together. I’m a big fan of the Niran’s of the world.

    But a good way to generate eye-rolls among neurosurgeons and have them not at the table we all need to come to is to let the fireman analogies pass without comment. Specialists need to defend PCP’s – (a DPC world is not necessarily one that would be kind to me) and PCPs would do well to quench the class warfare that those usually not among us are too quick to incite. As I said – its the wrong debate to be having.

    I am suggesting we strengthen primary care via DPC – a cat only plan (I would have had to pay a penalty for this) 2 years ago was $160/ month. I think a fair share of the population may be able to pay this + $50/month in a pre-tax fashion. I suspect that most employers would also be interested in this model. The downward price pressure that flows from this arrangement is remarkable – DPC docs find specialists that will take reduced rates and even find facilities that will do CT scans/mri’s at reduced rates. There is also a significant incentive to not send folks to specialists. How much do you want to bet that medical management of coronary artery disease is chosen significantly more often in this construct?

    Link to physician income as a portion of total health care costs. Barry is right on – http://www.jacksonhealthcare.com/media-room/news/md-salaries-as-percent-of-costs/

    Barry is also correct about us being the biggest drivers of cost – but I think a capitation scheme run through us incentivizes doctors to find the best deals for patients.. There is no one size fits all solution – but this is an attractive one. And again, I’m simply suggesting it be an option – let the patients choose between joining an ACO, and DPC…

  17. In any large population of patients, including a state’s Medicaid population, the healthiest 50% account for 4%-5% of costs in any given year. Under your approach, we would be spending $50 per month for both PCP and pharmacist on each of hundreds of thousands of people in a given state who currently cost the system nothing or very little.

    Separately, I take six maintenance medications for heart disease, all generics. When I need to renew, I send my doctor a note and he sends me new prescriptions by mail for a 90 day supply plus three 90 day renewals. He does this without charge and I send the prescriptions to my mail order pharmacy.

    A lot of doctors make patients come in for an appointment to get a renewal so they can get paid. I go for regular checkups as it is. I shouldn’t have to make a separate appointment just to get my prescriptions renewed and I shouldn’t have to pay a $50 per month retainer either.

  18. Respected members of the healthcare community. Although I am an outsider to the medical side of health insurance and care my unique experiences as a pharmacist who has spent most of my career working on primary care teams with physicians and other healthcare providers has provided me some insight into this maddening world. In response to Jim’s request for innovation, please allow me to pitch my idea and I welcome any and all criticism. My idea involves changing reimbursement for pharmacy and primary care simultaneously. What I can tell is that reimbursement is still primarily based on fee for service with an extra layer of “value metrics” laid on top with risk and rewards tied to meeting those. I am probably oversimplifying this but what I see from a ground level perspective is that despite all this talk of adding value to our healthcare system we continue to tie the hands of providers (pharmacists and physicians) and leave patients helpless. Case in point, I fax for refills on a patient’s blood pressure medication to the provider’s office and the response received was patient needs appointment for refills. The office reported the patient was seen last month. What I propose is a per member per month payment to primary care and a separate per member per month payment to a primary pharmacy (based on where a patient may get a majority of their medications). As an example, NC Medicaid reported it spent $667 per member for the year on physician services. (https://ncdma.s3.amazonaws.com/s3fs-public/Medicaid_Annual-Report-State-Fiscal-Year-2015.pdf). Instead of doling out this money piece meal for each visit and capping the total number of physician visits to 12 for each patient (in an effort to cut costs) the state could pay primary care $50 per qualifying member (however defined) per month (like direct primary care) which instantaneously generates savings. This could allow primary care more flexibility in how much time it spends with each patient, primary care could also e-consult with specialists for a majority of cases where the specialist is consulted during the patient appointment and the specialist advises primary care on treatment options/plan (this would also allow information sharing that is housed in 1 EMR (e.g meds and labs) instead of multiple and primary care would pay the e-consult a pre-determined fee that is used from the pool of PMPM. On the pharmacy side we would be paid PMPM (again instantaneous savings based on reimbursement we receive today) to keep patient’s as adherent as possible on their chronic medication and have the flexibility to provide accurate medication lists to providers for a more efficient visit. To tie all this together, the only way pharmacy or primary care gets paid a bonus is if we are able to reduce overall utilization by working closely together. This of course is only scratching the surface of a more in-depth idea that involves the health plan to play a central role in coordinating care/information between all parties involved and it may or may not be viable but we will never know unless someone is willing to pilot this after evaluating the true costs. I look forward to thoughts and sharing many more ideas I have to help propagate the upcoming revolution in healthcare.

  19. Several last comments. A friend from RI (a PCP) read this and said that my story was incomplete because it failed to mention the efforts of our regulator in RI (the Office of Health Insurance Commission, or OHIC). Chris Kohler was the first such commissioner, and as much as I hate crediting my regulator (that’s a joke), he deserves credit for pushing BCBSRI and United to do much more for primary care, including PCMHs and increasing the proportion of reimbursement PCPs received. Lastly he referred me to this Brown website regarding the new primary care population medicine course.
    We’re making some progress. Much more is needed.

  20. Gentlemen- please stop this back and forth about specialists and primary care. Both are valuable and absolutely necessary. This is one of the main reasons we are in this mess; not coming to the table as a group and fighting together.
    Without primary care there would be no congenital heart defects for the cardiothoracic surgeon to repair. Without cardiology or orthopedics, we would have no one to consult on complicated cases where we need help. We must as a group resolve to stop arguing and fighting each other. We want the same things. We want wages that allow us to live comfortably and we want freedom to do what is best for the patient.
    Now we finally have a non-doctor (albeit lawyer, sorry Jim) understanding the importance of primary care. Let’s run with it. Let’s resolve to change things together as one large group of physicians. Not providers. Not fire fighters. Not government bureaucrats.
    Collectively the 800,000 plus physicians in this country could feasibly mobilize and make change happen. But first we must focus less on having pissing contests amongst each other and more on fixing what is broken.
    DPC is one answer and Anish is correct, it is working and some Medicaid/Medicare patients can pay out of pocket. It is not the likely ultimate answer for everyone in the country. Let’s find that solution and build upon it. We are professionals.
    All of us, from the most super-specialized physician to the family doc in the small town, like my grandfather, who did appy’s, T and A’s and a C/S on his wife with their 8th child have much to offer the world. Be professional. Focus Gentlemen. The Health care system is depending on bright minds like yours and mine. Otherwise, all we have is CMS and heaven help us all.

  21. “Physician compensation is 9% of the total pie.”
    Really? Can you link that number?

    Peter – I think Anish is referring to the fact that physician practice expenses account for a bit over 50% of practice revenue. These expenses include office staff salaries and benefits, office rent, equipment, supplies, utilities, etc. and, of course, malpractice insurance. The 9%-10% left after expenses is physician income, or, if you will, the profit generated by the practice.

    My main beef with the 20% figure in the NHE data for physician and clinical services as a percentage of total National Health Expenditures is the fact that physician actions to prescribe drugs, order tests, admit patients to the hospital, consult with patients and perform procedures themselves drive almost all health care costs. The incentives and disincentives implicit in the various care payment models have all sorts of side effects.

    The total lack of price transparency makes it basically impossible for patients to try to choose the most cost-effective high quality providers even if they want to and, with more and more patients having high deductible health insurance plans, more of them do want to or at least should want to know what services, tests and procedures cost before services are rendered.

  22. “Physician compensation is 9% of the total pie.”

    Really? Can you link that number?

    “Spending on physicians’ services currently represents one-fifth of total national health care expenditures. From 1965 through 1981, expenditures on physicians’ services grew at an average annual rate of 12.4 percent, and even larger increases were experienced by the Medicare and Medicaid programs. By contrast, gross national product grew at an average annual rate of 9.4 percent over the same period. From 1965 through 1981, the Consumers’ Price Index (CPI) component for physicians’ fees rose by 7.9 percent per year, a rate 17 percent higher than the CPI as a whole. In 1981, total national expenditures on physicians’ services reached $54.8 billion, and the costs to government of physicians’ services under Medicare and Medicaid were $9.6 billion and $2.8 billion respectively.” Up to 1981.

    “Physician Pay Drives Skyrocketing Healthcare Costs
    Fees that insurers pay U.S. physicians are one of the key reasons that the U.S. has higher healthcare costs than other countries, results of one study showed.”

  23. What rules, Peter? As far as I know, people on Medicaid or people eligible for Medicaid or people not eligible for anything, can have $100 per month and can use that money as they see fit, no? Am I missing something?

  24. Should we pay firefighters and cardiothoracic surgeons the same? Not acknowledging the differential inherent in highly specialized fields that requires many extra years of fairly grueling training doesn’t seem fair either. This debate which gets folks frothing about pay differentials within physicians unfortunately distracts from the real issue. Physician compensation is 9% of the total pie. Divy it up however you want, or reduce it by half – you won’t make any meaningful gains when it comes to the great health care cost debate..

  25. “How much is the expertise of an orthopedic surgeon with a sterling record of complications worth?”

    How much is a PCP worth? How much is the firefighter than saves your life worth?

  26. ” I can certainly tell you that this model is working right now among a medicaid patient population, undocumented immigrant patient population, etc.”

    Which Medicaid/immigrant population? If you’re on Medicaid and doing this then how do you get past the income/assets Medicaid rules?

  27. “I’m curious what percentage of the population do you think could afford a $100 per month retainer for DPC on top of their high deductible insurance premium?”


  28. This! As Rogue Rad said… is step #2! The measurement mania and electronic red tape must be eliminated so we can resume practicing medicine. What physicians need is more time to spend with their patients and adequate compensation to feed their children, own a house, pay off student loans, and take an occasional vacation with their family.

    Moving the conversation to real change will take an act of Congress, literally and figuratively. Let me know when someone is listening who can actually do something about it. News flash: Its not Mr. Slavitt.!

  29. Anish: I agree with your concern about PCP involvement with hospitals. I referred to it as”linkages” in hopes that they would foster respect for and involvement with PCPs—not abject dismissal. I’m hopeful the relationship will grow to something better than it is today. I do also appreciate the role of insurers in this mess. We need some game changers here. While the idea of concierge PCP care is attractive, I do not see that as the ultimate answer. It’s a knee jerk reaction to the problem.

  30. 50-100/month. We could have subsidies below a certain income level. I can certainly tell you that this model is working right now among a medicaid patient population, undocumented immigrant patient population, etc. Doesn’t have to be a mandate – just allow it as an option, alongside ACOs, PCMH, CPC, etc.

  31. Anish, I’m curious what percentage of the population do you think could afford a $100 per month retainer for DPC on top of their high deductible insurance premium? How many of those would be willing to actually pay it? It’s a very attractive model conceptually but the market opportunity and the ultimate uptake may be a lot smaller than you think especially in a city like Philadelphia with a lot of low to moderate income people.

  32. My feeling – I’m a cardiologist who works closely with a primary care physician – an n of 2 multispecialty practice 🙂 is that the discontent doctors feel has much to do with lack of autonomy, and time spent not doing direct patient care as it does with reimbursement/compensation. A couple points on what Jim said

    1. Jim seems to applaud ‘linkages’ with hospitals – though I’m sure he realizes these linkages in the last 8-10 years have almost always resulted in a loss of autonomy. Suddenly, non-clinicians who don’t know much about taking care of patients, but have been to the most recent presentation on performance based payment are only too happy to tell you what to do.
    2. If you do manage to survive in a small group somewhere in a game where the reimbursement rules are written to benefit the ‘non-profit’ hospital systems – we face a stifling regulatory climate that is being sold as ‘value’ based performance metrics. Can’t hit those targets, or don’t have the resources to invest in a performance improvement department? – you get paid less..
    3. Specialists have become a pinata of sorts – and certainly the degree of difference in payment is a worthwhile discussion, but lets pay some respect to what speciailsts do. I was asked to come to the operating room for a patient that was hypotensive and tachycardic. A middle aged woman with no medical history who had just received a hip replacement from an orthopedic surgeon. The concern was for a heart attack, acute heart failure or some type of embolus to the lungs. An evaluation with an ultrasound placed via her esophagus revealed normal heart function suggesting the answer lay elsewhere. The general surgeons were called and rapidly opened her abdomen and found a pool of blood. A frantic search for a source found a torn vessel in her abdomen, that required repair, and ultimately saved her life. How much is the expertise of the surgeon worth? How much is the expertise of an orthopedic surgeon with a sterling record of complications worth? I have great respect for my PCP colleagues, but lets not deride our specialists, and what they make too much.

    The answer, I have come to believe, lies outside (former) Jim’s world. Primary care phsyicians need to exit the third party system that controls us. Direct primary care where patients pay physicians $50-100/month directly for visits/labs/immunizations/basic procedures is likely the answer. It should be lost on no one that the current rules that mandate a $300/month bronze plan, and don’t allow pre-tax dollars to be spent for DPC are barriers to this. Do the math – 600 patient panel – $720,000/year – no insurance companies – and the only thing you’re mandated to do is what you think is best for the patient. That would be an attractive proposition for any medical student.

  33. Jim – I cannot believe I am going to say this, but you get it! We will continue in crisis (it is about to get much worse) until someone realizes paying physicians by E&M for time is exactly what should change. This is where it MUST start.

    Lawyers (as you know) are paid this way and I am in the process of setting up my fees along these same lines. We must now charge for phone consults, prior authorizations, filling out forms, writing letters, and 24/7 triage call coverage in order to keep our heads above water.

    If I could reliably make 100K per year, I would simply be ecstatic! Let alone the 150-200K commenters are talking about, that would be a dream in a rural area. The value of “look-you-in-the-eye” is what most of us in primary care can offer and it is the key to ultimately providing valuable and cost-effective health care. it is the BEST care money can buy.

    I know you love Mr. Slavitt and that is fine, but he does not share your view of primary care. At least you have gone to see an old time physician. am not insulting him, only pointing out he doesn’t know what he doesn’t know. I wish I could get him to sit up and pay attention because he is holding my future in his hands. He is too in love with automation, data collection, and large 100+ physician groups to understand what he is about to destroy.

    As far as happiness and burnout, I am actually a dinosaur. I love my practice, I love my patients, and I love what I do every day. I am uncompromising on the volume thing (as I suspect you already know.) That is why I am on the poorer end of the spectrum. I cannot do assembly line medicine and will not do it. I would not be able to sleep at night for fear I missed something important. I will not conform to useless EHR’s and the other demands of the government because it does not improve care and I may be alone in my civil disobedience but I will continue to do what I think is best for my patients and myself.

    Insurers are to blame but so is CMS. “I would hope that insurers and the federal government both can take steps to change all this.” I agree but will not hold my breath. I have suggested many things they can do to improve the system, build better metrics, collect useful data, exempt practices from EHR compliance, but the data collectors do not understand the importance of details.

    Mark my words, the system is going to implode. Then CMS will start looking for answers they should have sought now. By then, a lot of us will be in urgent care because we couldn’t survive without higher E & M payment. It will be a shame. Dr. Richard Reiter had it exactly right! I wish he had been Mr. Slavitt’s physician too. The world might be a better place if that were the case.

    PCP’s in small private practices do really amazing work. Someone important needs to come and see it for themselves. Maybe you should visit me and then write about it?

    P.S. I like this new softer side of you. Keep up the good work. 🙂

  34. Of course compensation is important. But to reduce the cause of low morale to inadequate compensation, if not insulting, is inaccurate. We’re all seeking solutions. How far are you willing to go to solve the crisis? Are you willing to rid PCPs of the measurement mania that afflicts medicine? If not, why not?

  35. Jim – If it were up to me, I would like to try the following: First, split the RUC into two committees – one for specialists and one for primary care. Second, hold the specialist reimbursement rates harmless. Third, move the E&M codes partly away from the RBRVS system by supplementing the payment called for by the relative value units with a flat additional payment of somewhere between $25 and as much as $40 for a 99213 office visit.

    I think relative value units lend themselves better to procedures than to E&M billing codes. The incremental cost will, of course, run into issues with CBO scoring and how to pay for it. There won’t be a willingness to either raise taxes or beneficiary premiums or cut other spending within Medicare or elsewhere across the federal government. Money is always the constraining resource in this context but there are at least theoretical alternatives to the current Medicare payment system. Getting any of them through the political process is the big challenge.

    Maybe Medicare Advantage insurers could try some variant of this approach on their own if the actuarial estimate of the incremental cost is reasonable. It’s important to note that the normalized pretax margin on Medicare Advantage business is only about 5% and it’s less than that for Medicaid business.

  36. Any referral system that is based on stickiness of relationships and volume is morally bankrupt. We must base our referrals on quality of care, outcomes and cost. Your points are well made, and the issue does remain primarily one of compensation. There is no way around that inconvenient reality. That doesn’t make PCPs any less professional or human.

  37. I agree that RBRVS is a major part of the problem, and with your identification of the cause. Now what do we do about it???

  38. I write a lot about workplace wellness and wellbeing, and while compensation IS critically important (after all, that’s why people work), recognition and appreciation rank right up there. Here, with PCPs, we have the confluence of too little recognition, too little time, and too little compensation. And you cannot tell me that the finances don’t drive the small window of face time with PCPs. I grieve about that and understand it; we need to change that. So let’s move the conversation onto change.

  39. There are several issues here. Commercial insurance reimbursement rates that you discussed are just one of those. In theory, if higher reimbursement rates for PCP’s allowed them to see fewer patients per day to make a decent living and reduce the current overuse of specialists, total medical claims that payers and members have to pay could decline but we don’t know if that would actually happen or not until somebody tries it.

    Another problem is that within Medicare, the specialists clearly dominate the Relative Value Update Committee (RUC) and they protect their own turf and reimbursement rates at the expense of PCP’s. It’s been that way forever and nobody sees it changing anytime soon.

    A third problem is that the decline in the number of solo and small group practitioners is being driven, to a large extent, by the fact that the small practices can’t afford the investment in electronic records that the system requires these days while the actual implementation of electronic records can reduce physician productivity by 15% as defined by the number of patients he can see each day. Moreover, many of the younger doctors prefer to work for a large group practice or as a hospital employed doctor on a salary and bonus compensation basis. The bigger practices can also better accommodate more predictable and limited hours for those most interested in work life balance.

    That all said compensation remains an important factor. If the typical PCP could expect to make $300K per year instead of $150-$200K, it should, at the margin, induce a respectable number of new doctors to go into primary care especially if the day to day job appeals to them intellectually. Hospitals, for their part, probably view primary care doctors as able to generate a lot of revenue for the mother ship through referrals even if the primary care practice is a money loser on a stand-alone basis. The problem with that model is that keeping all referrals within the hospital system may not be in the best interest of the patient which is a whole separate issue.

  40. Thank you. You get it. Primary Care needs to get way more organized. It is not so much about the pay as it is the disparity. It would be interesting to know what the simple action of just raising E&M did in terms of patient care. Time with your provider is highly valued. I have yet to see one metric addressing that. Primary Care can live up to the expectations, but we need the time, workforce, and morale to do so.

  41. Damn. Imagine if he had argued PCPs should be paid LESS.

    I think this is another fine example of the Fallacy of the Perfect Blog Post. Namely, the author must defend against potential criticisms by accounting for each one in writing, preferably with hyperlinked footnotes in reputable peer-reviewed sources.

    If you go through his blogs, I think you’ll see Jim has made many of the points you’re making about PCPs and their responsibilities ..

  42. There’s too much to know.
    Everyone should specialize a little more and the specialists should generalize a little more….so that we have docs more like gynecologists or pediatricians and internists, who know their field thoroughly but also know enough of general medicine to recognize psoriasis and leiomyomas of the uterus, etc., and to be a case manager or gate-keeper for their patients who must occasionally go to outside specialists. The ophthalmologist who doesn’t recognize a basal cell carcinoma on a patient’s forehead is specialized too much. The PCP who doesn’t know that erythromycin prolongs the QT interval or doesn’t understand the serology of the common rheumatoid diseases has not specialized enough.
    There would be much more happiness in the workplace if people felt they knew their subject matter better.

  43. Indeed. Mr. Purcell has joined a long line of commentators who have “followed the money” to explain the low morale of PCPs. He might talk to a few PCPs, particularly those who work in rural areas, what ails their souls.

  44. Jim,

    I encourage you to read Medscape and also take a look at KevinMD website.
    Pay is only a partial issue for most PCPs. For almost all, it is the constant requirement to spend more time away from treating patients, to feeding the EMR monster with useless information and meeting constantly more “measures”, and the current regulatory quagmire of MIPS, MACRA and so forth. Conversely, my GI guy (who is very good at what he does, and a good doc) can crank through a number of scopes a week and rake it in. I have nothing against him or what he does, I couldn’t look at backsides all day, but my point is that PCPs are so disenchanted with the whole freaking system, that many just want out. My own internist who is about as dedicated as they come is looking for a way out of the office grind, and she’s probably just in her early 40s. My understanding is that even the NPs and PAs are starting to steer away from Primary Care. I could not in good conscience recommend a young person to go into medicine today, certainly not primary care, unless doing Direct Care, and even then the government will probably hijack that too.

  45. It’s not just about the money, PCPs need power (yes, I really mean power) so that their job isn’t simply to satisfy number crunchers and meet (defunct) metrics from organizations like the one you once led.

    Britain’s model might be one to emulate, as far as GPs are concerned (though I doubt people will be willing to accept the trade-off)


    Make PCPs gatekeepers of the system. Raise their pay and responsibility. Have fewer, far fewer, but better paid specialists.

    Much of the medical management done by specialists can be done by primary care – e.g. management of stable angina, blood pressure, diabetes. If specialists, not PCPs, are managing these ask yourself why? What is consuming the time of PCPs? Hint: it’s not clinical medicine.

    If you really want to grow primary care, start by empowering them. To empower them, make them do less crap (i.e. non clinical work). Otherwise, talk is cheap.