How not to convince doctors to embrace single payer

How not to convince doctors to embrace single payerWhat would happen to physician salaries if the United States adopted a single payer system?

The concept of a single payer system is a progressive ideal, and has been vociferously pursued by some left-leaning physician groups. For a variety of reasons, not least of which is the political climate in our country, I think the chances of single payer happening soon is relatively remote.

But if it does happen, it will likely be a vast expansion of Medicare, or Medicaid, to everyone — the proverbial “Medicare for all.”

Some physicians are wary of such a prospect, not least of which is the impact on salaries.

From Progress Notes, the blog from progressive-leaning Doctors for America, comes a physician written piece that describes exactly how Medicare for all will affect physician salaries. Unsurprisingly, every field will go down. Some more than others. Radiology, neurosurgery and orthopedics will experience a 20 to 30% decrease, while primary care, like internal medicine and pediatrics will experience drops of 8 to 10%.

Many progressives will argue that a drop in physician salary is a sacrifice worth making in order to ensure universal coverage while saving money. Of course, the doctors affected aren’t likely to agree. After all, no one likes their salary cut.

My issue is with the messaging. Asking anyone to sacrifice, without offering an olive branch in return, isn’t likely to go far. Relying on altruism sounds good in theory, but is rarely successful in practice.

I’ve written before that progressives need to offer doctors something in return for a drop in salary. Specifically, significant malpractice reform and relief in medical education. Yes, physicians get paid a relatively high salary, which generally garners no sympathy from the public when the topic arises. But they also pay exorbitant education fees, graduating with hundreds of thousands of dollars in debt, and American medical malpractice premiums are among the highest in the world.

Personally, I would be wary of a Medicare for all system because of the government monopsony that will result.  I realize progressives would tout that as a feature. But if the Indian Health Service is how the government will run a single payer system, I would be gravely concerned about relying on them to properly fund a national health system.

Like it or not, those on the political left need to convince more doctors to bring their of health reform vision to fruition. They need to offer something more than a pay cut to do so.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.

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  • Anonymous

    Liability Reform would be a logical olive branch.

  • Dylan Gulbrandson

    While they might be on their way, the salary cuts can’t be more than the difference that doctors need for med school loans and malpractice insurance.
    Surely, with this reform other reforms can be made, such as switching over doctors’ way of salary to the way one of the most successful hospitals in the world, Mayo Clinic — by the hour.

    • http://www.kevinmd.com kevinmd

      Paying doctors by the hour would be a significant improvement, and encourage time spent with patients to be valued.

      Kevin

      • Anonymous

        Though, paying by the hour would encourage inefficiency by rewarding those who spend more time per patient than necessary.

        • Anonymous

          Yea … sort of like how you feel when you visit your lawyer.  

      • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

        There are some websites of groups charging by the hour http://www.doctalkers.com.   When I proposed this type of payment system to a sampling of my patients they said it would feel like getting into a cab at the airport with the meter running

  • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

    A few years ago I read a study in the Annals of Internal Medicine comparing the real value of compensation for a primary care physician in the British National Health Service and a US family physician in private practice. They took into account the fact that the Brits offered an office expense allowance, a home allowance, they guaranteed the physicians children education through the university leve and there were guarantees against medical malpracticel. When taxes and inflation were taken into account , British primary care doctors earned considerably more than their US counterparts.

    For US physicians to make the transition it must occur over a period of at least a decade so that current US physicians who personally invested in equipment and office space can transition. The benefits must include things like funds for the office , a housing allotment, benefits such as health insurance, retirement planning , some form of sovereign immunity from medical malpractice litigation  and a plan to help educate your children. Even with this degree of benefits it will be a tough sell in a country where individualism and taking risk are part of the culture

    • Anonymous

      I was told in person by a Canadian headhuntress that  family docs in Creston, British Columbia, earn over 200k per year.  I earn a lot less than that in the state of WA. 

  • Devon Herrick

    Physicians who are tempted by the idea of only having to bill one insurer (i.e. Medicare) need to understand the implications of a single-payer system. If there is only one (single) payer, doctors would have no alternative but to work for what the government payer is willing to pay. Estimating that American physicians would suffer pay cuts of only 10% to 30% is drawing an overly optimistic conclusion in the absence of any objective data. The whole point of a monopsony is the ability to dictate prices.  In Scandinavian countries physicians earn only about double the average wage.  The comparable figure in the U.S. is nearly five times the average wage.
     
    Moreover, a single-payer would have the ability not just to dictate physicians’ fees, but also to dictate the procedures the government payer is willing to reimburse for. I would think physicians would demand more than tort reform and a free education before they would accept monopsony wages.

  • http://www.facebook.com/paul.c.weiss Paul Weiss

    Medicare is touted as being the most efficient payer relative to administrative costs. If a single payer system were funded comparably to private insurance and ran as efficiently as Medicare, then there wouldn’t need to be a decrease in reimbursement.

    However, what is not brought up in this article is the provision of questionable services that raise physician’s incomes. Cardiologists profit from placing stents in stable patients with CAD when they are not necessarily more effective than lifestyle changes. Orthopedists and neurosurgeons profit from fusing and replacing degenerating lumbar discs when this is not more effective than physical therapy. Physicians who own imaging centers are more likely to order unnecessary studies.

    The costs saved by avoiding unnecessary tests and procedures can be tremendous. The physician profit losses would be, also.

    • Anonymous

      I’m impressed on how you pulled this cr*p right out of your butt without a single link to a goofball blog as a source.  

      “Cardiologists profit from placing stents in stable patients with CAD when they are not necessarily more effective than lifestyle changes. Orthopedists and neurosurgeons profit from fusing and replacing degenerating lumbar discs when this is not more effective than physical therapy. Physicians who own imaging centers are more likely to order unnecessary studies.”

      When you make statements like these you need to cite multiple peer-reviewed independant research papers from other than Commonwealth Fund.  

      Buying into academia’s myopia that drives HHS doesn’t mean you are even close to understanding medical economics.  Elections have consequences and 2010 was the first step back toward sanity.  

  • Woolhandler

    Your post, and the studies it’s based on ignore the facts that:

    1 - Canadian docs have done well under their single payer system – as documented in a recent, careful study http://pnhp.org/blog/2011/07/25/impact-of-single-payer-on-physician-income-in-canada/

    2- Streamlined billing under single payer would save US doctors vast amounts in overhead (http://content.healthaffairs.org/content/30/8/1443.abstract), and free up additional physician time to see a few more patients.  Hence, even if doctors’ gross incomes declined slightly (a questionable assumption if they’re freed up from insurance paperwork and able to devote more time to patient care) physicians’ average take home incomes wouldn’t change under single payer.

    Of course, some doctors’ incomes would go down – e.g. those who currently enjoy a particularly rich payer mix.  On the other hand, some would see an increase – e.g. those currently caring for many Medicaid or uninsured patients.

  • http://www.facebook.com/people/Ida-Hellander/100000191931713 Ida Hellander

    There are two parts to the answer 1) We don’t literally mean Medicare
    for all.  We mean an “improved and expanded Medicare for All”, a true
    national health insurance system that can save $400 billion annually on
    administrative overhead, control costs, and do real health planning (for details, see http://www.pnhp.org/proposals), and
    2) We don’t propose paying for care for the uninsured by cutting
    physician fees like other proposals.  Instead, we propose paying for
    care by slashing administrative waste.  We don’t expect a large increase in physician incomes after passage of NHI, as in Canada (see study at http://ajph.aphapublications.org/cgi/content/abstract/101/7/1198) but do expect to compensate primary care (at least) better.

    Malpractice will fall as a result of patients not having to sue for
    future medical expenses and as a result of better continuity of care, and
    the single payer should look into paying tuition for any person going
    into the health professions.

  • Anonymous

    As a physician in private practice, I would gladly trade a slight decrease in income for freedom from the daily struggles with multiple payers just to get paid. Also my overhead costs would decrease considerably without having to pay billing services.  Having recently visited with physicians in Toronto, I saw how they were well paid and didn’t have the hassles with insurance companies that we have, nor the expensive malpractice fees.

  • Anonymous

    Using existing Medicare payment rates, as does the study cited by Doctors for America, does not provide an accurate estimate of physician compensation under a single payer system since there would be considerable revision of the Medicare program before it would become a national health program that covered everyone.

    The closest example we have of what we might anticipate is provided by the Canadian single payer system. Quoting from an article in the July issue of the American Journal of Public Health, “From this research, we observe that even when the readjustments resulting from various policy and payment alterations are taken into account, Canadian medicare did not lead to a loss in physician income. Rather, physician incomes grew more quickly than those of other Canadians and are considerably greater. In short, the medical-income argument against moving toward a Canadian-style system is feeble.”

    Also, in the August issue of Health Affairs it was demonstrated that U.S. physicians pay an additional $60,000 in overhead expenses compared to Canadian physicians merely to interact with payers. Imagine being relieved of that hassle and saving $60,000.

    Hopefully, these actual facts should help to convince doctors to embrace single payer.

  • Anonymous

    Large government systems have no incentive to improve anything, just maintain the status quo. Look at the VA system. It is very difficult to get things done quickly. A veteran with severe debilitating back pain had a kyphoplasty canceled appropiately for new onset A-Fib. It will take 3 weeks to get an echocardiogram throught the VA. It should only take an hour in a private institution. “The efficiency of the DMV with the compassion of the IRS”

    We need more competition in the health insurance industry, as there is in other insurance industries, eg., auto, life, disablity. Companies are fighting for the premium dollars. There is aggressive marketing and competition. The healthcare payor system is driven by medicare standards not real market forces.

  • Anonymous

    Large government systems have no incentive to improve anything, just maintain the status quo. Look at the VA system. It is very difficult to get things done quickly. A veteran with severe debilitating back pain had a kyphoplasty

  • drjohnross

    For as long as I have been a member of Physicians for a National Health Program (20 years) and
    speaking publicly on the subject of single payer reform, physicians new to the
    single payer concept have worried that single payer
    would lower their salaries.  The appropriate answer is
    that it depends on how much the single payer decides to
    pay.  In most other national health programs this is a
    public negotiation with physician input. 

     

    I presume that the lower salaries for specialists
    assume that all patient charges would be paid at
    Medicare rates.  I suspect this would lower some
    physician salaries but it would certainly increase those
    of others especially those who care for lots of the
    uninsured and poor.  As with any change there would be
    some winners and losers.  The key point is that we
    anticipate that single payer reform will result in $400 billion saved and would allow coverage of all the
    uninsured and improve coverage for the rest of us. It also assumes that physicians
    and other care givers will be held whole as
    a group.  We calculate only savings
    from administrative waste.   A recent study suggests that US physician billing overheads are $60,000 yearly and four times those of our Canadian colleagues. Sadly most MD’s are showing poor leadership when it
    comes to reform. I worry that Kevin Pho by
    failing to adequately describe the results of our policy choices could worsen our professional standing in the policy debate.  Without well informed leadership we will deserve a drop in salary. On the other, hand at least he is
    willing to acknowledge that the idea of single payer
    improved Medicare for all has legs and discuss it.  That
    puts him light years ahead of our elected leaders.  Johnathon Ross MD, MPHPast President of Physicians for a National Health Program (pnhp.org)

  • Anonymous

    For as long as I have been a member of Physicians for a National Health Prgram and
    speaking publicly on the subject, physicians new to the
    single payer concept have worried that single payer
    would lower their salaries.  The appropriate answer is
    that it depends on how much the single payer decides to
    pay.  In most other national health programs this is a
    public negotiation with physician input. 

     

    I presume that the lower salaries for specialists
    assume that all patient charges would be paid at
    Medicare rates.  I suspect this would lower some
    physician salaries but it would certainly increase those
    of others especially those who care for lots of the
    uninsured and poor.  As with any change there would be
    some winners and losers.  The key point is that we
    anticipate in our savings calculations that physicians
    and other care givers will be held whole as
    a group.  We calculate only savings
    from administrative waste as adequate to cover all the
    uninsured and improve coverage for the rest of us. 
    Given that most MD’s are showing poor leadership when it
    comes to reform, I now fear that Kevin Pho by
    failing to adequately study the policy choices may fall
    into that category.  On the other, hand at least he is
    willing to acknowledge that the idea of single payer
    through an improved Medicare for all has legs and has allowed us to discuss it.  That
    puts him light years ahead of our elected leaders.

  • http://twitter.com/Liberty_Doc Patrick Hisel

    Here’s an olive branch: loan forgiveness.  Or better yet, when the government enters a four year agreement with a physician in which the doctor sees medicaid patients (at a loss) in return for payback of medical school loans, DON”T DEFAULT on it like Texas did:  http://www.hhloans.com/index.cfm?ObjectID=A85AA8AA-0CD1-EDD4-D9379C7C084059FB

  • Robert Luedecke

    The only thing needed to create a single payer system in the US is a public option with a payment system based on average compensation of the currently existing multi payer system.  Choosing Medicare or any currently existing system allows different specialties to say they are inadequately paid under that system and to oppose it.  Choosing a blend of all currently existing systems with weighting of the different systems based on number of patients in that system will create a true “equivalent single payer system”.  If the government can truly operate that single payer system more economically efficiently and with good patient satisfaction, that system will gradually take over most of the care.  If the government cannot operate that system in a better way, it will die because patients will not choose it. If that public option can be operated more efficiently, there will be enough money to take care of the currently uninsured and they can be added little by little as money is saved from the increased operating efficiency. 

    Under this sort of system, you can encourage physicians to participate by guaranteeing that changes to specialty compensation will occur slowly over 5-10 years to allow for time to adjust to the changes.  If physicians choose to not participate, they would not be protected from any dramatic changes that might occur to compensation in the private sector.  Some physicians will be willing to trade long term security for a little less up front now.  This is how you can see in the safest possible way if it is possible or desirable to change to a single payer system and to allow everyone, physicians and patients, the chance to gradually feel OK with doing it.  Competition keeps the whole thing “honest” and incentives can be used so people want to participate instead of being forced to do so.  If physicians feel “taken advantage of” they can move back over into the private sector with its risks.

  • http://www.facebook.com/profile.php?id=1524251706 Joan Foor White

    How about a healthier country?  Is that enough of an olive branch?  Signed, emergency department nurse from Indiana

  • Robert Luedecke

    A healthier country is an idea embraced by most physicians.  It is also important to me that I am able to bring in enough money to pay my bills and take care of my family.  As an anesthesiologist,  Medicare pays me about one-third of the average commercial rate and Medicaid pays me even less.  With two children in college, it is very unlikely that I will agree to Medicare-for-all at one-third the pay. 
    Would you agree to work for one-third the pay in return for a healthier country? 

  • Robert Luedecke

    It sounds like you are also from Texas and were on the wrong side of the recent cost cutting.  It was very important to Gov. Perry that he not raise taxes so he could run for President.  So he instead decided to shirk his responsibility to provide adequate funding for many programs he had previously agreed to, including the one you described.  If it helps you feel better, he also did not pay medical schools for increasing their enrollment (as the legislature had requested them to do, to produce more doctors).  He also cut funding that eliminated residency slots in primary care so that now more Texas medical students must leave the state for training.  But you must feel good about the $6 billion he left in the bank so that he could say how good he was at managing state finances.

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