Niko Karvounis and Maggie Mahar
By now you know that Senator Max Baucus (D-MT) has offered a “Call to Arms” for health care reform by way of a 98 page policy document. There is much to think about in Baucus’ proposal, so you might have missed the section where he talks about increasing payments to primary care providers at the expense of compensation for specialists. But in the future, keep your eyes peeled for developments around this proposition—because supporting primary care is going to be a complex and controversial undertaking.
Baucus rightly recognizes that primary care is “undervalued” in our health care system. The Medicare reimbursement schedule—which is the model for private insurers rates—pays a lot more for removing a wart than it does, say, for talking to patients about their medications. Doing something to a patient (procedural care) is compensated much more than is doing something with a patient (cognitive care). The result is that generalists, including family practitioners, internists, primary care providers (PCPs), geriatricians and palliative care specialists make a lot less than proceduralists.
Today the average annual salary of a radiologist is $354,000, and at the high end they make $911,000. Orthopedic surgeons pull in $459,000 to $1.352 million; cardiovascular surgeons average $558,719 to $852,000. By contrast, internists report average salaries of $176,000; after years of experience, they can hope to make $245,000. In the middle of her career, the typical pediatricians can expect to earn $175,000; later, she may move up to $271,000. The average family practitioner may gross $204,000, at the high end he can look for $299,000.
Following the recommendations of an April Medicare Payment Advisory Commission (MedPAC) report, Baucus wants to restructure the reimbursement system to place more value on primary care. Part of this plan is to offer bonus payments to PCPs by making a list of services that qualify as primary care services (“evaluation and management visits”) and boosting payments to doctors who deliver these services. These increased payments would be “budge-neutral”—meaning that hikes in PCP payments would be coupled with corresponding cuts in some specialists’ payments.
On the one hand, Baucus is right. PCPs and, more broadly, generalists,
should be paid more for their services. The work they do is absolutely
essential: coordinating care lowers health care costs by preventing
unnecessary or duplicate tests and prescriptions, and helps to keep
tabs on chronic illnesses—which are responsible for 75 percent to 80
percent of our heath care bill. But Baucus will have a fight on his
hands, since giving more to PCPs means giving less to specialists.
The ever-reliable Kevin M.D. has already begun chronicling the
burgeoning “civil war” between primacy care physicians (PCPs) and
specialists on his blog. He highlights a dispatch
from Bob Doherty, blogger for the American College of Physicians, from
the American Medical Association’s House of Delegates meeting on
Monday. Doherty notes that “many of the physicians lining up at the
microphones have expressed support for [increased] primary care
[payments]—as long as it doesn’t involve redistribution of dollars
among physicians.” Uh-oh.
“It is not a good sign that some physician specialty societies already
are drawing such lines in the sand,” says Doherty—and indeed they are.
After MedPAC issued its recommendations in April, the American College
of Surgeons—along with thirteen surgery subspecialty associations like
the American Association of Neurological Surgeons, the American Academy
of Ophthalmology, and the American Association of Orthopaedic
Surgeons—wrote a letter
to the commission declaring its “strong opposition” to budge-neutral
increases in PCP payments. Trading a primary care bump for specialty
cuts would “address the challenges facing one aspect of medicine at the
expense of all others,” say the surgeons. In a blog post
this month, one associate professor of cardiology at Northwestern
University goes even further, calling the Baucus/MedPAC plan an attempt
to “steal from the rich (specialists) and give to the poor
(generalists).” This one’s going to get ugly.
Reality Check
Part of the anger no doubt stems from the fact that many specialists
must undergo an extra two to three years of training to gain expertise
in their chosen field. Given that they’ve studied longer, shouldn’t
they make more money? Maybe. But how long can two extra years of school
translate into three times the money? Isn’t there a point where the
collective benefits of a doctors’ work also should influence how much
she is paid, just as much—if not more—than years of schooling?
If your answer to this question is “yes,” then you’ll find the
following numbers disturbing: between 1997 and 2006, annual
compensation of dermatologists increased by 97 percent; for
gastroenterologists, 78 percent; and for radiologists, 65 percent. Over
this same period, however, pediatricians saw a jump of just 32 percent;
internists 30 percent; and family medicine generalists a mere 21
percent. Specialists don’t just make more money than other doctors—over
time, they also make more money faster than others. It’s hard to see
how extra schooling can rationalize these numbers.
Given this state of affairs, it’s perhaps unsurprising that medical
school graduates aren’t keen on becoming PCPs. In 1990, 9 percent of
graduating medical students planned to work in primary care/internal
medicine; a September University of California-San Francisco survey of
1,200 med students puts that proportion at a mere 2 percent today.
Moreover, we know that the financial incentives in our health care
system encourage physicians to over-treat in certain areas. Back in
January, Maggie reported
on the “turf wars” that the Happy Hospitalist described in hospitals
where doctors fight when it comes to performing very lucrative
procedures. Colonoscopies, for example, pay nicely, and doctors vie to
do them. Meanwhile, the U.S. Preventive Services Task Force recommends
that patients have a colonoscopy only every ten years “on the basis of
evidence regarding the natural history of adenomatous polyps.”
Yet, just last year, the New York Times pointed
to a study suggesting that colonoscopies are performed too often.
According to the research, “60 percent of the time” patients have a new
colonoscopy “sooner than the guidelines called for by the American
Cancer Society and the American Gastroenterological Association.
“Not surprising,” commented
blogger Kevin M.D., “since they are well-reimbursed.” This suggests
that patients might benefit if Medicare took a close look at fees for
procedures that we know are being done more often than evidence-based
guidelines would suggest.
Working Conditions
But will extra pay really bring us the number of new generalists that
we need? Undeniably, cash is part of the cost-benefit equation that
doctors and freshly-minted MDs consider when thinking about their
future. According to the 2008 Survey of Primary Care Physicians,
administered by the medical search firm Merritt, Hawkins, and
Associates, 47.12 percent of internists, family practitioners, and
pediatricians feel that their net income from practice is
“disappointing.” Further, a whopping 72.86 percent of PCPs think that
the financial viability of their practice over the next one to three
years is poor, shaky, or mixed.
These aren’t comforting numbers. But, at the same time, 44.58 percent
of respondents said that their net income from practices was
“appropriate”—almost as many as reported disappointment with their
earnings. Yet while primary care providers are split in their financial
pessimism, they’re less divided about their overall unhappiness with
primary care. Merritt, Hawkins, and Associates reports that 60 percent of PCPs would choose another field if they could do it all over again.
This dissatisfaction probably has much to do with the day-to-day
reality of primary care. No matter how much it pays, primary care and
generalist medicine is very time-consuming and laborious. It’s ongoing
work that is focused on communication, coordination, and prevention,
and it’s after-hours effort that involves regularly consulting with
patients and doctors.
Primary care is not episodic like surgery: a surgeon sees one patient
for five hours to perform a distinct, well-defined procedure. At the
end, he can feel enormous satisfaction in a job well done. By contrast,
consider the never-ending task of providing primary care for Medicare
patients, who visit physicians an average of 57 times a year and see an
average of 14 different physicians. That’s a lot of coordination and
administrative legwork. Unsurprisingly, the UC-San Diego survey showed
that administrative burdens—paper work, the constant demands of the
chronically ill, and the after-hours attention required to coordinate
it all—are some of the major reasons why med students are not going
into primary care.
These realities won’t go away, and we should be careful not to think
that throwing money at doctors will definitively push them toward a
particular field. The pace, character, and duration of the work is just
as important as how much a doctor makes from it.
No doubt, more pay would make the burdens of primary care delivery more
palatable. But we will need other reforms as well. For example,
Baucus, like President-Elect Obama, calls for the creation of a new
public insurance plan. This would help: the more people covered under a
single provider, the better, at least from an administrative
standpoint. Greater uniformity in coverage would save doctors countless
hours of navigating the fragmented, byzantine requirements of various
private insurers.
Another boon for primary care legwork would be improved health care IT
which, in the long-run, would make the coordination of care far more
efficient. It’s a lot easier to pull up someone’s personal health
record than it is to call four doctors and ask them to fax over
information.
But health care IT is initially very expensive. Studies of small group
practices trying to implement electronic medical records show that on
average, the systems initially cost somewhere between $33,00 to $44,000
per physician, plus maintenance costs ranging from $18,000 per
physician annually (if the practice invested only $33,00) per
physician when setting up the system) to $8,500 per provider (if they
spent more at the outset.)
Meanwhile, “For most practices, electronic health record
implementation leads to a reduction in productivity for 10-15 months
and a 10% cut in take-home pay for five years,” notes the Texas Primary
Care Coalition report, citing a study of “Medical Groups’ Adoption of
Electronic Health Records and Information Systems” published in Health Affairs in 2005. Typically, it takes ten years before electronic medical records “pay back” for the initial investment.
Clearly, family doctors working solo or in small group practices are
not going to be able to afford health care IT unless they receive
funding either from the government or a hospital flush with cash.
But if someone does provide the seed money for electronic medical
records, this will make an enormous difference for primacy care
physicians: one-half of the doctors in the Merritt, Hawkins, and
Associates survey reported that a full 50 percent of their revenues
went to overhead. Reduce the paperwork, and more doctors would take
home more money, and, presumably, feel better about their financial
futures.
Another helpful reform—which unfortunately is not mentioned in the
Baucus plan—would be a loan forgiveness program for med school
graduates who choose primary care. On average, a medical student
graduates with $140,000 in debt, making lower-paying physician jobs
less than appealing. Give them the chance to be debt-free, and the
cost-benefit calculation is changed dramatically.
Necessary but Not Sufficient
All of these changes are about more than just paying primary care
doctors more for their services, although compensation is admittedly
part of the equation. But the point is that, while increasing primary
care payments and trimming pay for some specialists services is a good
idea, it’s no panacea. The problem is complex, and goes beyond income.
Ultimately, we will probably need to be grapple with primary care as a
cultural issue within the medical community. In the past, Health Beat
has noted
that there is a “cultural divide” between proceduralists and cognitive
physicians, and that, in medical schools, students are sometimes looked
down
upon for choosing to specialize in cognitive care. Further, research
has shown that the medical school curriculum actually drains students
of empathy,
which may contribute to de-valuing communicative, interpersonal care.
When trying to figure out why new graduates are not interested in
primary care, it’s worth looking at what our educational institutions
emphasize. Do they even offer courses in palliative care and
geriatrics?
The bottom line is that we need to take a multi-faceted approach to the
primary care crisis. Reform needs to move forward on multiple fronts so
that when conflicts arise—like the generalist/specialist tug of war
that appears to be brewing—progress continues. We need to keep moving
forward in addressing our primary care crisis; and the best way to do
that is to recognize the value of tackling it from different angles.
I don’t see how it can get ugly. Except the name calling. Primary care has no traction, no leverage. So you think the shift of revenue will just come about? It was what Hsaio(? RVRBS author) proposed 18 years ago and has never been implemented. CMS committee is packed with specialists.
What is truly amazing is that anyone in Medical school still goes into primary care. It speaks to the idealism of the profession, since the tide is so strong to the specialties.
I agree that throwing money at docs isn’t the answer. So why don’t we stop with the highest paid. I don’t need more money. (I’m a family doc. It’s been years since I’ve seen 6 figures.) I’d be glad to earn $100k. Lets not, as Family docs argue for more.
LET’S JUST PAY THE SPECIALISTS LESS.
I, too, weep for docs in today’s economy who are pulling in less than $200k annually. Perhaps they should get a tax credit. That said, I’m curious what data there is to suggest that paying them more would yield more pcps, particularly inasmuch as increased supply in other markets tends to reduce price. would a $20k hike do the job, or would it take $200k?
A large randomized trial of women who had completed treatment for early-stage breast cancer found that primary care physicians and cancer specialists provide follow-up care of equal quality.
The findings suggest that, in general, women who prefer to see their family doctor for follow-up care do not have to worry about decreased quality of life or an increased risk of a serious clinical event due to an undetected recurrence (J Clin Oncol. 2006 Jan 17).
I think those doctors who do a better job will continue to do so at the same low pay and will ultimately retire. They will be replaced by doctors and corporations that watch their bottomline more than their patients health. In the end, everyone will get exactly what they paid for.
By the way, don’t forget to have everyone get their flu shot at their local supermarket. Afterall, why do we need to go to a doctor to get healthcare when we can get it at Wawa.
On the specialist vs primary care and budget neutrality.
Another pot of money that can be used to budget neutrally help is malpractice reform. How about reducing the malpractice insurance for primary care? If the government were to take on malpractice burden for primary care or cause it to lessen through tort reform then you would be providing a pay raise of upto 30K back to the physcian.
Going from 100K to 130K in compensation would be a great boon for primary care. This would also make the physician’s life easier since when assessing a patient they also do not have to asses the legal risk associated with the patient. Something worth a lot more than the 30K they pay for malpractice.
Taking care of malpractice could also mean that a primary care physician who knows the appropriate protocol for taking care of a patient problem may assess the risk of taking care of that patient is worth it instead of sending them to the already overcrowded emergency room.
If you want to reduce ER visits and total visits to hospitals (which are tremendously costly) then encouraging Primary Care, financially and with less legal threats will be an option that needs to be considered.
The burdens of primary care are many (I have not talked about paperwork, billing, patient compliance, patient attitudes, all the aspects of running a small business…) and to encourage physicians to join its ranks, addressing a few of the burdens would inexpensively increase primary care as a desirable career and also reduce the rate of increase of total medical costs throughout the country.
I have to question the salary numbers posted in this article. Undoubtedly you got them from some headhunter company. You cant use those numbers because they are lies, made up out of thin air with no data to back them up. These firms purposely inflate their numbers so they draw more applicants.
If you want REAL doctor incomes data, use the Census/US Labor Dept. They have millions of data points because they collect their data directly from the IRS. Unlike the headhunter companies, they dont have any reason to lie about their data points, and it includes a FAR broader spectrum of data from across the whole country.
According to the US Labor Dept, the average physician (across ALL specialties) is 160k per year, before taxes.
Still a great income, but its nowhere near the 250k numbers you were citing. Nobody in primary care averages anywhere near 250k. I’d say that only teh top 5% of primary care docs make that much.
It’s absurd to cherry pick the few specialties everyone agrees are overpaid (i.e. radiology) and compare their rates of increase with primary care while conveniently ignoring the far greater number of procedural physicians whose incomes have remained stagnant or declined.
Yes, many specialists deserve to make more money than PCPs. Not only is the training longer, but comparing the rigor of family practice residency with general surgery residency is laughable. It’s 3 years of a difficult job versus 5 years of having no existence outside the hospital. This isn’t even getting into the fact that surgery is just slightly higher stress; reams of paperwork can be depressing, perforating someone’s bowel and potentially killing them can be a bit more depressing. There is also that whole working 20% more and having to come in at 3am on Christmas thing.
There are a few specialist fields that are clearly overpaid. Other fields are probably about right and I would argue that general surgeons are actually clearly underpaid. And I’m not a general surgeon, but I do feel bad for them.
Thanks for all of your comments.
ddxdx–I have to admit, the last line of your comment made me laugh out loud.
But I think you are too pessimistic about whether or not primary care docs will get a significant raise. Times have changed.
Well-placed people tell me that the committee that sets the fees realizes that is going to have to cut some fees at the top and hike fees at the bottom.
There is overwhelming political support for more primary care physicians managing chronic disesases, and giving patients a medical home.
I’m a little skeptical– see my posts on medical homes. I don’t think solo practioners or small groups can give patients the 24-hour access and co-oridination of the care provided by 15 dcotors (the average number of doctors Medicare patients see) that advocates of the “medical home” envision. Small group practices also cannot afford the electronic medical records they would need. . .
(See my posts on “medical homes”
But I do think primary care docs should be paid more–and that working conditions need to improve. We cannot expect too much of them.
I also think that we should pay RNs more to work with them.
How much more would it take to attract more med students to primary care?
I have no idea. But we are nowhere near a point where over-aupply would bring salaries down. And as we keep pointing out on HealthBeat, it’s not just about the money.
Jim– $200,000 a year is not so much for someone who, rather than getting a job right out of college, went to school for another 7 years and then emerged with $140,000 in debt.
Gregory–
I can well imagine that many primary care physicians can give breast cancer patients good follow up care.
But some cases are more complicated than others . . . And many primary care docs are so rushed these days, that don’t spend more than 15 minutes with a patient.
pp–
Even if the govt paid malpractice premiums for primary care docs, that doesn’t solve the problem.
Doctors worry about the anguish of being sued– the time it takes, the damage to their reputation–even though the vast majority win their cases. (See my post “Myths about Malpractice)
The fact the govt was paying for the premiums wouldn’t make a lawsuit any less likely. So doctors who are inclined to practice “defensive medicine” would continue to do so.
It would make much more sense to have a loan-forgiveness program for med students who become family doctors, geriatricians, palliative care specialists . . . This also would open med school up to many low-income students who don’t apply today.
The way to tackle the malpractice problem is to
teach doctors and hospitals to be much more honest and open about errors. Hospitals that have tried this approach find that they are much less likely to be sued.
Joe Blow– the salary numbers don’t come from a head hunter. Salaries vary regionallly, but I’ve read enough reports from enough different sources to know that the average doctor in
the U.S. does not earn $160. We have many, many more high-paid specialists (and fewer generalists) than most countires– and the million-dollar- salaries pull the average way up.
Alex–
You’re entirely right about “general surgery”–I almost included it in thepost. It’s another example of “generalists” being paid less, even if they are surgeons. But the post was already long . .
However, it’s not just radiology and a few other specailties that are overpaid. There is general agreement that dermatologists are overpaid, as are fertility specialists, onoclogists, orthopeic surgeons–and most other surgeons who specialize. We do too many procedures, and too many surgeries because they are so lucrative.
Incertain areas of medicine, where patients are desperate, specialists learned, a long time ago, that there is no ceiling on what they can charge.
(I once asked an eye surgeon how he picked his specialty. He looked at me and said “what are your eyes worth?”)
The greediest specialists raised their fees, patients went along (often assuming that this meant the doctor was “the best” in his field) and before long other (not necessarily greedy) doctors said “Why should I charge less? I’m as good as he is”.
Maggie,
You should still use the US Labor Dept data set for physician salaries.
The physician salary surveys that are available on the internet differ WIDELY from US Labor dept info because generally they are recorded as pre-overhead, pre-taxes. The US Labor dept figures are AFTER overhead has been extracted, and before taxes have been applied.
Here’s the website. Take a gander at these numbers:
http://www.bls.gov/oes/current/oes_nat.htm#b29-0000
Family Practice: 153k
Internal Medicine: 167k
Psychiatrists: 147k
OB/GYN: 183k
Anesthesiology: 192k
Pediatrician: 145k
Whats most relevant about this data set is that it includes much, much larger sample populations than the salary surveys use. The salary surveys on the net typically use as few as 100 respondents for each salary group, and reporter bias dictates that it will be the higher wage earners who report those figures, therefore skewing the average upwards. The BLS dataset, however, has 20,000 samples for EACH physician category. No salary survey can match that.
The US Labor Dept doesnt have that problem, because its database is the IRS, to which everybody is supposed to report. Their figures are much more likely to be accurate over a voluntary salary survey that has less than 1% of the sample size.
Maggie,
A good analysis of the comments, as usual. I agree with your comment on medical homes–a nice concept in theory, but in reality, would it really work as well as envisioned? Regarding specialists charging whatever they want: Charges really are quite meaningless, since actual reimbursement is tied to the rates set by CMS (Medicare) every year. The medical profession is nothing like the legal profession, where attorneys can charge by hour at whatever rate they want. Doctors’ charges are meaningless because doctors are forced to accept only what Medicare or insurance companies feel like reimbursing, and doctors are not allowed to bill the patient for the balance of the charge. So your comment about specialists being greedy is inaccurate. What doctors perhaps do have some control over is the volume of the procedures/services that they perform. However many of these services/procedures have to be pre-authorized by the insurance companies, which will only authorize them if they are indeed medically necessary. It is obviously in the insurance companies’ financial interest to deny as many procedures as they can….so it’s not like there aren’t any checks and balances in the current system. Many doctors–and patients for that matter– would in fact argue that the insurance companies (such as United Healthcare) have gone overboard in their “denial” role…harming patients in the process.
The real questions are how many procedures are being done that are in fact unnecessary (and by whose standards)? And why aren’t these already being curtailed, since insurance companies and Medicare carriers do seem pretty vigilant?
jms and Tammy
jms–
I agree entirely that, in the last ten years, (or more) physician compensation has been driven by volume–physicians not beind paid more, but doing more.
And, as you say, the question is: how much of that “more” is unnecessary. . .
But when I talk about “greedy” specialists
setting the bar very high, I’m going back to the 1970s.
This is when money began to flood into healthcare (because after Medicare, passed in 1965 many more patients had access to healthcare, and Medicare set no limits on what doctors and hospitals could charge.
This was the beginning of the era of the specialist (because we knew more and
someone who specialized actually could do things that a primary care doc hadn’t been trained to do–or didn’t do often enough to be really good at it.)
In Money-Driven Medicine, I quote George Lundberg, former editor-in-chief of JAMA, talking about how, in the 1970s, the specialists sized up the situation and realized that they could set the bar. Lundberg was there at the time (teaching in a medical school)
Later, in the 1980s and 1990s, Medicare and insurers would begin trying to contain costs, but the bar for specialists’ payments had already been set much, much
higher than for generalists.
I’m not blaming the majority of specialits. Once one or two doctors in a given town had decided that procedure Y was worth X dollars, it’s not surprising that other specialists began charging what had become the “market rate” in that community.
(I also not trying to sell copies of my book–honest. But you can get a very clean, almost new used copy on Amazon fo,r– maybe $3 or $4. I don’t see a penny of income from that sale, but am very happy when more people read the book (or parts of it–it has a very good index, so you dont have to read the whole thing.)
Tammy–
The relatively low numbers you cite for generalists make sense.
At the same time I would poing out thse are “median averages”—half of all doctors make more, half make less.
The other type of average adds up all doctors salaries, and divides by the number of doctors. In that case, the really high salaries brings up the “average”—and give us a sense of how much we pay the “average” orthopedic surgeon vs. the
“average” primary care doc.
Also, in the U.S. a great many doctors from other countries take care of our Medicaid patients– and docs who take Medicaid patients (wheher they are American and trained here or Indian and trained abroad0 are paid about 30% less than doctors who care for Medicare patients.
This also pulls down the median average, and distorts how much most American doctors are paid .
Great post.
If we are truly concerned with the comprehensive clinical care of the American health care consumer this issue must be addressed, immediately if not sooner. We can easily swing the pendulum of reimbursement from the specialists to our primary care practitioners and not affect their (the specialists) lifestyles. Not to mention, do the income statistics you provided include the (rough estimate) $500-$1000 a day the surgeon receives from his/her investment in their surgery center? How about the income form their MRI center/service or their therapy center? How about the $250,000 that one of our local physicians received in 2007 from one of the hip/knee replacement prosthesis companies?
What a great venue to begin real change.
Nearly all observers agree that promoting primary care will decrease overall health care system costs. But how do you make that happen in our highly commercialized U.S. health care industry, where the dollars preferentially flow to everyone EXCEPT primary care? It’s merely another case of “follow the money.” Not much has changed, in fact it’s just gotten worse, in the 17 years since I finished IM residency. I agree with ddx:dx that it is “truly amazing that anyone in Medical school still goes into primary care.”
However, it’s not just the relatively low income, it’s also the low prestige, and the low reimbursement for office visits driving the pressure to increase volume at the expense of quality. Elsewhere writers have described a “hamster on a treadmill” and speaking from personal experience that’s exactly what primary care office medicine feels like. Just try to see an 80 yo with 10 active problems and 20 current meds in a 15 minute time slot, and you will truly understand what I mean.
By the way, I don’t believe physician reimbursement has to be a zero-sum game where primary care benefits ONLY at the expense of specialty care. Gains in primary care could come, in a more rational system, from expected overall savings to government and private insurance programs. There might be some decline in procedural physician incomes because the volume of procedures would go down!
Read ‘A Doctor’s Guide To Wealth’
http://www.robertrainermd.com
Further to a prior discussion on another thread regarding Maggie allegedly deleting poster’s comments, the comment on this thread by Robert Rainer was one that probably SHOULD have been deleted.
Specialists face greater risk – in terms of the likelihood of being sued. Hence, higher salaries.
One mistake from these guys could mean losing their medical license.
However, Primary Care Providers do deserve an increase in benefits.
There is much to think about in Baucus’ proposal, so you might have missed the section where he talks about increasing payments to primary care providers at the expense of compensation for specialists.?? …because supporting primary care is going to be a complex and controversial undertaking. So, what we are going to do?
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