Targeting physician salaries is a poor strategy for health care costs

Targeting physician salaries is a poor strategy for health care costsA recent study from Health Affairs took aim at physician salaries.

Well, not exactly their salaries, but fees. It’s a subtle difference, but that nuance is lost in the mainstream media narrative.

According to the study, “American primary care and orthopedic physicians are paid more for each service than are their counterparts in Australia, Canada, France, Germany and the United Kingdom.”

Thankfully Aaron Carroll, a pediatrician and progressive-leaning health policy expert, goes deeper into the study and finds that, yes, fees paid to American doctors are higher, but not so much with primary care physicians:

Targeting physician salaries is a poor strategy for health care costs

The fact that primary care doctors often get lumped into the “physicians get paid too much” debate is regrettable, especially when you compare their salaries to generalist physicians in other countries.

And, when you consider the cost of an American medical education, the pay difference becomes more negligible.

Targeting physician salaries is a poor strategy for health care costs

Studies that compare United States physician salaries with other countries need to make a better distinction between primary care doctors and specialists, as well as include medical school and malpractice costs of American doctors in their analysis.

Policy makers often target physician salaries because it’s low hanging fruit. And the public generally doesn’t have much sympathy for doctors when it comes to their pay.

However, respected Princeton economist Uwe Reinhardt wonders in the New York Times whether targeting doctors for immediate savings is worth it in the long term:

Cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.

This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy.

Dr. Carroll agrees, providing a chart showing that physician salaries comprise only a small portion of health care costs:
Targeting physician salaries is a poor strategy for health care costs

Reforming how doctors are paid should not be the only piece to solve the health care cost puzzle. Tackling a problem this large requires shared sacrifice, from both patients and health professionals alike.

But in this climate of austerity and economic gloom, “rich doctors” are easy punching bags. Targeting their salaries will bring dubious health savings at a high emotional price for a profession that’s going to be counted on to care for both a ballooning Medicare population and 30+ million newly insured patients in the coming years.

Poor strategy indeed.

 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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