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Atul Gawande's New Yorker article about the disparities between healthcare costs and outcomes has certainly made the rounds since it was first published a few weeks ago: It found its way all the way to the Oval Office.
The gist of Gawande's article is that sometimes spending more on healthcare actually buys us worse care. And while there are many possible factors for this, one of his arguments is that if we're going to reform the system in a smart way we're going to have to change the way we incentivize various services.
For example: if primary or preventive care are crucial, should we reimburse them at higher rates than more specialized fields like cardiology or neurology* orthopedic surgery? Would this be a way to both get more young people into these basic care areas, and also to encourage an emphasis on the "right kind" of healthcare?
In the coming months we'll talk much more — as a nation, and on this show — about the largest structural questions of the U.S. healthcare system. But we'd like to kick off a series of healthcare conversations by focusing on this tricky, and often personal, intersection of money and medicine.
If you're a healthcare provider, how much money do you make?
Can you share with us where your income comes from? What percentage is salary, as opposed to fees for service? Do your patients pay out of pocket, or are you reimbursed by insurance companies or Medicare?
Where does your money go, professionally? How much do you spend on malpractice premiums, or advertising, or overhead?
And even if it's uncomfortable to talk about, how does money affect the decisions you make in terms of care? Or your decision to pursue your particular field in the first place?
GUESTS:
- Meredith Baker: Urologist at Bend Urology Associates
- Amanda Clark: Urogynecologist and gynecoogist at Comprehensive Gynecology Associates in Portland
- Chuck Kilo: Internist and CEO of GreenField Health in Portland
- Ronald Turker: Pediatric orthopedic surgeon at Kaiser Permanente in Portland
Tagged as: doctor · medicine · rx
Photo credit: Waynemah / Flickr / Creative Commons
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Morning, everyone! Our staffing switcheroo has David in Emily’s host chair for the week. I’m wrangling the online conversation for him today. I noticed a popular medical blog, kevinmd.com is talking about this very same issue today.
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As a medical group administrator I'm very familiar with the differences in physician compensation. I'd just like to provide some facts on compensation. It varies greatly by specialty, by type of practice (single specialty versus multi specialty), by region of the country, and by the number of physicians in a practice. Some of the best information published on physician compensation is from the Medical Group Management Association in their annual publication on Physician Compensation and Production. For example, 2006 (national) data showed the median compensation level for a primary care physician was $171,519 while specialist compensation was $322,259. In general, the south and mid west parts of the country have higher median compensation levels than the east and the west for both primary care and specialists. A five year (national) trend shows compensation for primary care physicians increased almost 12% while specialist compensation increased just over 17% in the five years.
Family Practice specialty (with no OB) had a median compensation level of about $164,000 in 2006. A pediatrician had a salary of $174,000. A cardiologist who does invasive procedures had a median compensation of about $432,000, an orthopedic surgeon was $425,000, a general surgeon was $305,000, a neruosurgeon was $572,000, and OB was $270,000 are a few examples of the differences in compensation.
Primary care physicians are compensated less than specialists because they don't do the type of procedures or surgery that specialists do. Given the current fee for service methodology of payment by insurance companies, primary care physicians are not able to generate as much revenue as specialists in their daily office visits as a specialist performing surgeries.
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Are these figures net or gross? Are these after liability insurance costs? We know people who came out of undergrad and med school with huge student loans. This massive debt sometimes forces people into higher paying specialties. I'd like to hear your guests thoughts on this.
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These would be W2 wages, therefore "net" of office or practice expenses. This would be after liability insurance was paid and does not consider a doctor's personal debt, such as student loans.
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As a shareholder in health care companies I've been wondering whether "excellence for shareholders" is turning out to be a bane for doctors and health care consumers?
To widely generalize, do health care managers and executives make too much? Do health care consumers demand too many unecessary high-tech procedures?
How do we fix the health care system given the perceived inertia of congress, health care executives, and investors who benefit from the system remaining broken as it is?
Doctors drowning in paperwork represents a poor use of their training and skills.
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I'm a nursing student here in Portland about to graduate on august 7th. All along in school we've been told to think about the cost of care you are providing, and how can we help lower that cost. One comment I heard from your guests was they were taught to not even consider cost. Where does that paradigm shift from Physican training to Nurse training not consider cost?
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Your point is well taken. Medical training now does include cost consideration.
When I trained 30 years ago, we were taught that it was unethical to consider cost when treating patients. There were not as many tests and technology to use then, and it made sense to "do everything" for every patient.
I made that comment to point out the difference in thinking that older physicians have had to make in their perspective.
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I am a patient, a customer, if you will. I am tired of 'fast food' medicine. When I see a PA at a Vancouver practice, the person making my appointment decides how much time I get. Typically, this is 15 minutes and the PA is running late. It seems that there is too much attention to compensation and less on customer satisfaction. If this was a clothing store, I would be looking elsewhere.
Ken
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I am intrigued by what sets salary levels, not only between GP's and surgeons, but more generally, for example between top executives and factory workers. These do not seem to me to be simple market-driven prices.
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Do Kaiser-Permanente physicians get paid for providing fewer services for patients?
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I am a Kaiser-Permanente orthopaedic surgeon. I have complete autonomy in deciding (within my skill set) what procedure or non-operative management method I offer my patients. I get paid no more or less for offering my patients more or less, therefore I have no financial incentive to recommend more or less.
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Can you discuss the role of mid-level providers in these practices. Physician Assistants are becoming more and more common in this environment of the shrinking dollars
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As a Surgeon in the Portland Metropolitan area I can state the critical issues that will keep future generations away from medicine:
1) Reimbursement - We are constantly threatened by decreasing medicare reimbursement to the point where I get 20-30 cents for each dollar I bill. The other 70-80% of the bill is completely written off with no tax benefits or any other sort of relief for that lost income. If my practice were 100% medicare, I could not even keep the office open and pay my overhead. Therefore, the insured patients are the ones that allow me to keep my doors open.
2) Cost of training - Medical School + College costs can easily exceed $200-$400,000 in debt. Accumulating interest at 6%. And, in a 3-7 year of residency making $40-60,000, most finishing their training are in a tremendous amount of debt that takes decades to overcome. By compensating MDs less, no one will want to go into the field. We committ 10+ years of our life to minimal income with huge debts.
3) Malpractice - We absolutely need malpractice reform. Paying $30-50,000 per year is near 10-20% of physicians salary. We can not continue to finance insurance companies and their salaries along with lawyers over frivolous lawsuits.
Physicians take on tremendous responsibility, undergo incredible training, and make sacrifices to friends and family to care for patients. What we get compensated in comparison to exorbitant corporate executive salaries is simply unfair given what we go through. We accept 20-50 cents on the dollar for what we bill, what lawyer, plumber, corporate executive would say, "yeah, thats fine just pay me 50% of what I charged you". Physicians as a whole have not had an overall pay raise in two decades, this has to stop.
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Atul Gawande has written some wonderful articles on medicine over the past several years and his book "Better" is fantastic. Mr. Gawande is not only a great doctor, but also a great writer.
I am fully for 'socialized' health-care run by the government. Because clearly from the history of America alone, the free market is not going to act in the interest of good care for all. This is just an unfortunate fact of capitalism, that is really unavoidable.
Some questions: Do specialists get paid more in other countries with socialized care? Is it more responsibility or more work to be a specialist? Do they deserve this compensation?
I agree with all the conclusions of Mr. Gawande's article. However, I think one thing that may be missing from the discussion: what are the customers or patients perspective---and does it matter? I realize the empirical evidence does not support that these systems (as seen in Texas) provide better care, but do the patients perceive they are getting better care? And does this matter? Is there a value in this? I have many friends that belong to Kaiser and many have a perception that they don't receive the best care, I realize they probably do---but does this perception matter? -
I am a Kaiser patient and have been very pleased with every aspect except the company in Texas that can't seem to credit my payments correctly (it's even on automatic payment.)
I like that my records can be seen by every Dr. I see; that I get x-rays and tests and have been immediately returned to the Dr. for response; I know exactly what my visits will cost; they have so many programs for health encouragement; I can email the Dr., get test results online. They don't mind that I get PX's at Wal-Mart because they are much cheaper. I'd be happy to have them in charge of national healthcare as I believe they emphasize the right things.
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I've often thought that having a medical practice means running a small--or not-so-small--business. Some people are good at that and enjoy it, and some aren't and don't. But I think that very few people go into medicine because they aspire to be businessmen and businesswomen. If they did, they'd go into business. So there must be a substantial number of physicians who spend way too much time running their business and way too little time practicing medicine, leading to widespread dissatisfaction. Many doctors can escape this by taking a salaried position, but are there enough of those? And are they renumerative enough to make a doctor feel good about making the switch?
--Edward
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you cannot use the word disparity!!!!
primary care cannot be directly compared to specialist medicine for many reasons. just because two doctors work the same hours does not mean they should be compensated the same. please admit that there are differing levels of skills involved, acuity of care, etc. this applies to all areas of society, not just medicine. the world needs ditch diggers, too.
edit: this doesnt apply to the above post. im reacting to the on air discussion
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Basic free market economics theory say price, salaries, fees, etc., are determined by supply and demand. However, in the healthcare industry, it is not a free market. Mainly oligopoly insurance companies determine fees. I would guess that the insurance companies bargain harder with primary and family care doctors than with specialists.
But there are other barriers to free market economics in health care. I have heard that medical care doctors and hospitals are not allowed to publish/advertise what they charge. If this information was more public then there could be a more meaningful public conversation.
Now, for a question: In medium and large size clinics where doctors are on salary, how are doctors evaluated and salary increases determined? I quit going to one clinic (after wasting thousands of my insurance company's dollars there) because my doctor totally ignored my chronic pain and focused mainly on my cholesterol scores. Then last week I heard a story on NPR where a complaint among primary care doctors was that they could not focus on the patient because the doctors were evaluated and compensated according to their patient's scores on things such as blood pressure, cholesterol, etc. What ever happened to patient satisfaction?Short and simple: When doctors are on salary (not fee for service), how are the evaluated and their compensation determined?
Bob -
i'm listening to the show, and i was outraged by the nurse with advanced credentials (PhD) who put forth the opinion that she or an engineer or history professor should be paid as much as a physician. As she put it, she and these other professionals had equivalent advanced training and physicians shouldn't be paid any more than she was, which was considerably less. I am an internist that takes care of patients in the hospital.
Before we start hacking the already decreasing salaries of MDs, consider that these individuals start with their nose to the competitive grindstone in highschool and keep it there through college, then through 4 years in medical school (wherein the student aquires about $120K-180K of additional debt) and then no less than 3 more years in residency. These years are rigorous and filled with stress, sleep deprivation and generally neglect of any personal relationships. With the changes in medicine, these days being out in practice is just a little bit better than being in residency. That's just a description not a whine fest.
Additionally, a nurse with a PhD does not have near the medical competency ( no matter what the lay public might believe) or responsibility or LIABILITY that a physician has. Nurses, engineers and history professors aren't taking overnight call, missing holidays and generally putting their ass on the line every single day. I doubt they accumulated the debt that physicians have. By the way, some advanced degree professions that don't involve saving lives make far more with a much better lifestyle.
The life of a clinic internist, pediatrician or family practioner is arduous and is often unsatisfying for numerous reasons and salary isn't at the top of that list. That's why I don't do it and medical students are running the other direction from it when they think about what they're going to specialize in. Or better yet, why do medicine at all? Anybody who is smart enough to be a doctor is smart enough to do something else that doesn't take near all the above mentioned sacrifices. So think of that when you can't find a doctor to see you until a month out or you can't find a doctor at all.
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For an excellent article with a slightly different slant presenting an analysis of and some solutions to the cost of health care, see the following authored by an Oregon physician.
http://www.open-spaces.com/article-v7n4-healthcare.pdf
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I used to be on Kaiser, and was very shocked by what happened when I was forced to switch to a 'regular' insurance company.
1. The doctor's office bills the insurance company a high dollar amount. Then the insurance company sends them a lower payment, which they accept as full payment (minus any portion due from the patient). This means two people getting the same procedure don't actually pay the same amount.
2. The doctor recommends tests and procedures with no care for whether or not the patient can afford it, and because of the situation described above, the patient has no idea how much they will pay. If the patient needs to know, they can go home, contact the insurance company, find out how much it's going to cost, then go back to the doctor. Very time consuming, and not in the patient's best interest.
3. After I go to the doctor, I get 5 or 6 different things in the mail for each visit. What a waste of time and paper! With Kaiser, when you leave the doctor, you're done. Done with paperwork, done paying, just done.
4. Once, the doctor's office had a computer glitch, and hundreds of patient visits were never billed to the insurance company. The doctor was never paid for these procedures. That probably didn't help with the cost of care for future patients!
I've also been told that a lot of insurance billing is incorrect, and I've received several incorrect bills myself. More time and paperwork to get that all straightened out.
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One final note--sorry I was late getting this up, we had some server problems. There's a pretty comprehensive NEJM article suggesting concrete changes for doctor pay. Go dig in.
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Hello,
I am an RN in a cardiac surgical ICU. In my experience, most physicians work very hard and long hours and have quite a bit more liability exposure than most RNs. As one person said, 6% of health care spending is on MD compensation.
One person said Portland's cost #s were low in the spectrum between McAllen ($15,000) and El Paso($7500)/year medicare dollars/capita. I am curious what Portland area's actual number is. Do you have that data?
I see two areas where we could save money in health care, being a bit more juditious with tests, scans, etc. and also as the LeapFrog group cited years ago to emphasize doing major procedures at places with high volume. The expertise and repetition of a high volume center makes has better outcomes as well cost control.
Thank you,
Vincent RN
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As a Family Physician working in a safety net clinic I have never in 20 years made
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As a Family Physician working in a safety net clinic I have never in 20 years made the "median salary" for my speciality. This is not really a problem until we need to recruit a new doctor and find that starting salaries have skyrocketed beyond what our current physician staff is paid.
If a primary care doctor sees a reasonable number of patients each day from a variety of payment sources (Medicare, Medicaid, self-pay, private insurance) and bills for those services, he or she has a hard time making a "median salary." The practices that can pay such salaries usually are heavily subsidized by hospitals (which value primary care doctors as sources of referrals to their specialists, imaging, lab, and inpatient services) or insurance companies (which recognize cost savings of primary care), multi speciality clinics (which need primary care doctors to to refer to their specialists), or the government (such as in Community Health Centers).
The result is that even as fewer medical students choose primary care, those that do are likely to be employed in a setting that subsidizes their salary because of the current payment system that rewards procedure-oriented specialties at the expense of cognitive-oriented primary care.
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I am the nurse with a PhD who spoke on this morning's show about physician over-compensation. I'd like to respond here to jwmd's remarks.
Nurses are exposed to significantly more personal risk in the workplace than physicians. This is evidence-based, not my opinion. Studies have shown that abuse of nurses involves verbal abuse (usually from physicians), physical attacks (usually from patients), chemical exposure (e.g., chemotherapy), and exposure to hazardous body fluids (blood, feces and so on.)
Nurses, contrary to jwmd's perception, work nights, holidays and weekends far more than physicians. Nurses begin their careers on night shift, when the fewest support people are available. Nurses do not usually take call, it is true; nurses do, however, work every other weekend and every other holiday. Nurses are coerced or even mandated by employers to work overtime when staff are short. Nurses are present 24/7 in hospitals, often assuming roles normally done by other professionals during the "off-shifts".
jwmd is correct that nurses do not possess as much medical knowledge as physicians. Physicians do not possess my nursing knowledge, either, and I do not expect it of them. Would jwmd say that physicians should make more than engineers with PhDs because engineers do not know medicine? It's a non-sequitur.
Physician compensation is not the main source of health care overspending, but the attitude of salary entitlement among physicians is inappropriate nonetheless. Health care should not go to those who can pay for it; bringing physician compensation in line is but one piece of the solution to decreasing health care costs and increasing accessibility.
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A Phd in Nursing is great, so congrats, but nurses follow the orders of the doctor.The doctor takes the responsibility and has many more years of training not to mention the high achievement required to even become a medical doctor. The physician deserves much greater compensation. Further the physician compensation is just a distraction. The problem is the insurance companies. See my general comment regarding this real problem.
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I think your missing JWMD's point with regards to engineers and physican's salaries. A physician is , generally, directly responsible for your health. The engineers responsible for lets say designing a boeing jet are also responsible for your safety but the methodology for designing and constructing the aforementioned jet goes through a variety of tests and checks with a large team.
Again, the required immediacy of a dr.'s decisions are the difference.I would also add the PHD on an engineer could be in a huge host of sub disciplines that may contribute to some level of competency but not to one that necessarily puts him or her in charge of your well being.
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torzeck, I think you are misinformed. Today, as I worked in intensive care, I ensured a 75-year-old with a broken neck got his anithypertensive and antidysrhythmic that the docs hadn't ordered. I got him the correct brace so his broken neck would stay in position as it healed. I saw to it that he got the correct diet, managed his pain, exercised his lungs and planned ahead for his discharge arrangements. No physician "ordered" me to do these things.
On other days, I administer vasoactive drugs that can kill or save a life. The docs don't touch these drugs because they are not skilled in their use. They write the orders, but do not give them.
The misconception that nurses are merely lesser doctors is common. But think about this: Do you really believe that someone could get a PhD in merely following orders? Think about it for a few minutes. I'll wait.
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Interesting show, but I think its missing the point. Physician's compensation is a distraction to the real problem of skyrocketing healthcare costs. The real problem is the insurance companies.On average, Insurance companies use 20-30% of every healthcare dollar for administration. Next, add the office workers required to code the dr's work and navigate the insurance co.'s paperwork just to get paid. There are how many healthcare insurance companies in Portland?, In Oregon, In theUSA? It does not take a rocket scientist to see the redundancy and inefficiency. Insurance companies are for profit corporations. They make money when they don't pay. Is it ethical for the insurance companies to make a profit? They don't own the hardware{ the hospitals+ equipt.} nor the talent{the drs, nurses etc.}. Medicare only uses 3% of each Health care dollar. I say we eliminate the redundancy with a single payer, non profit and insure everyone.Then the pool of money will be very large. Usage will be a bell shaped curve of low users and high users on the ends and a large belly of moderate users.
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I've just joined this conversation so may have missed past concerns, but is anyone talking about the games that insurance companies play with denying claims? I am a psychologist and could write a book about the ever-evolving procedures that become the basis for denials. One example is the company that requires same-day authorization for new patients. Evening appts. are popular for therapy so calling after a client leaves at 8 or 9 PM is an arbitrary burden. Some rules are never communicated ("family therapy is not covered") but are denied with no recourse. My office calls the insurance company for every client at the beginning and we have to continually increase our proactive question list. We also get caught between the company that authorizes and the one that pays with mutually exclusive rules and communications. This not only a huge waste, but is surely inappropriate in a society that prides itself on high ideals, including good healthcare.
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Hi,
The point made about the ease of acquiescing to patients' requests for tests—say an MRI—really made me think. I have a problem with big pharma advertising prescription drugs to the general public. Doesn't this put incredible pressure on physicians?
Thanks.
Tom
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Lunoshard, I can't speak for the other physicians here, including the ones who spoke on air. I can only speak for myself.
It's not that I was trained to ignore the costs of treatment; this was not the case at all. It was more that I was trained not to take the patient's level of resources into consideration, as that could possibly bias my treatment decisions. One is trained to provide the most appropriate care, and, when all appropriate options are equal, then the selection on the basis of cost would be encouraged.
If one has detailed knowledge of a patient's resources, or makes incorrect assumptions about them, one may make inappropriate treatment selections. It's best to select the best treatment options, discuss that with the patient, and then figure out a way if it proves that the resources are an issue.
It's a delicate ethical balance. Yes, one is running a business, but you don't want to look at every patient encounter from a monetized perspective. That's how you get McAllen, TX.
On the other hand, you want to provide good patient care, and that may not be the cheapest thing.
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I am a primary care physician family physician working for Kaiser Permanente. I can attest to the shortage of medical student physicians interested in family primary care. We are in active recruiting mode for a smaller and smaller pool of qualified applicant. Large studies show that we are falling short in the US of replacing primary care physicians (family physicians, pediatricians and general internists) by between 3500 and 7000 physicians per year. It is predicted that the US could be as many as 200,000 physicians (primary + specialty)short of the actual need by 2020. We have, over the last 20-30 years, filled some of this deficit by taking the best and brightest physicians from other countries (many with even worse physician shortages) while many highly qualified and interested prospective medical students can't get a slot in an American medical school. We are in the process of hiring a local Oregonian who had to go to Grenada to get into a medical school. Training physicians is not cheap. America is ultimately going to have to invest in more medical schools and in enlarging the size of current medical schools in order to adequately meet the looming physician shortage. Physician salaries are ultimately a matter of supply and demand. In the long run it may be less expensive to train more physicians (with emphasis on primary care) and let the market deal with the income issues.
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I have not seen this program because I live in Bay Area. Also this program is about 4 months old. Yet, when I read this discussion today, I found something that is totally missing in the perspective. Some Physicians have tried to raise this perspective and it is important.
My daughter is currently in the final year of her MD. I spent to the tune of $250000 dollars for her 4 year education and another $160000 for hear Stanford education. My daughter is fortunate in that her parents are willing to foot her loans at 6.8 % interest.
Now, if she were to make anything less than $180000 (net liability insurance) when she starts working, probably after 3 years of residnecy, I will be disappointed. I am not even sure that she will be earning after three years in residency. She may pick a few fellowships for sub specialities. That leaves seven years before she earns.
Medicine in USA is extremely intensive for the student and equally stressful for the parent. The student has to endure enormous stress levels and keeping the child in the medical school and motivating on a daily basis is stressful for the parents.
When a student incurs enormous costs, it becomes imperative that they be compensated. A Physician's skill set in caring for a patient is not the same as a Ph.D in engineering. I also hold a Ph.D and know what a Ph.D means. But the two disciplines are incomparable. Similarly, I do not think that a nurse practitioner, while her services are critical in patient care, needs the same skill sets as the doctor or undergoes the same levels of stress in decision making.
One of the physicians has commented on the personal sacrifices that doctor makes. I agree with him because many doctors don't have the usual family life that we know of. I worry about my daughter on that score too.
The issue in health care is not physician's salaries but overhead and drug costs. It is congressional deliquency to disallow generics for drugs when such generics are available and sold around the world. I have to take Actos (brand) medication even though Pioglitazone can be sold in USA as a generic. It is a pure rip off. A lot of health care problems have nothing to do with the Physicians and have everything to do with the way we manage our medicine and the actual costs of that medicine.
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there is no limit for Doctors they can earn with no limit. Now these days taking a good medical treatement is very much costly. golf instructions
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Comments are now closed.
As I mentioned above, I highly recommend reading Gawande's New Yorker article. But you can also hear many of the main points of the article in this Fresh Air interview.