Income inequality among physicians should matter to patients

Recently, a medical student confided in me a thought that few in our profession would dare say aloud: “We may have come to medical school to help people, but we choose our specialty careers based on potential salaries.”

This in part explains why the most-prized residencies are in fields such as dermatology and radiology, whose procedures generate high fees. According to a physician survey by the Medical Group Management Association, the median income of specialists is nearly twice that of primary-care physicians — $384,000 vs. $212,000. The highest-paid gastroenterologists make about $846,000 a year; the highest-paid internists make about $352,000.

As in most professions, it has long been true in medicine that specialists earn more than generalists. They train longer and in many cases pay higher insurance rates, but these factors don’t fully explain the chasm. We’ve now reached a critical point where the income disparity is harming the general population.

(Full disclosure: I am an infectious-disease doctor and make somewhere between the median income of a primary-care doctor and a specialist.)

It is, for example, a major cause of the dearth of primary-care doctors in the United States. The Association of American Medical Colleges estimates that by 2020 the shortage of primary-care doctors will reach more than 45,000 — that’s about 5 percent of the 851,300 physicians of all types that will be needed by then, or about 10 percent of the needed primary-care physicians.

The scarcity of primary-care doctors is leading many patients to forgo essential medical care or delay it to their detriment. I believe it’s time to intervene.

It’s not the market

Many of my colleagues may criticize efforts to level the playing field as “spreading the wealth” or “socialized medicine,” but I disagree. Physician payments are not determined by market forces or patient demand for a particular specialty. They’re driven by Medicare, Medicaid and private insurance. A 2008 study, for example, found that physicians in the highest- and the lowest-paid specialties (hematology/oncology and geriatrics, respectively), earned more than 50 percent of their outpatient income from government sources.

Moreover, in most cases, Medicare sets a payment amount, like a yardstick, for a procedure or a visit, and Medicaid and private insurers pay doctors a larger or smaller percentage of that fee. As a rule, Medicare pays physicians more for procedures — inserting scopes and cutting into the body — than for cognitive services such as diagnosing, coordinating and counseling. In fact, the widest income gap exists not between primary-care physicians and specialists but between proceduralists such as radiologists and opthalmologists and non-proceduralists such as endocrinologists and psychiatrists.

Medicare, for example, pays an ophthalmologist nearly $600 for cataract surgery and the insertion of an artificial lens. (As a medical school colleague once told me: The best job in medicine may be an ophthalmologist in Florida.) Medicare pays a gastroenterologist about $200 for a screening colonoscopy. These procedures take about 20 minutes or less.

In contrast, Medicare pays primary-care doctors about $100 for a visit that might take more than half an hour and involve evaluating and managing a complicated patient with diabetes, emphysema and congestive heart failure.

While it’s true that some specialists, such as general surgeons, typically work longer hours than primary-care doctors, studies show that primary-care doctors often work nearly the same number of hours per week (about 57 for internal medicine) as most specialists. And although specialists do have additional years of training, a 2010 Health Affairs study showed that a cardiologist quickly recoups the lost income from the training years and has a $5.2 million wealth accumulation over a career, compared with a primary-care doctor’s $2.5 million and an MBA graduate’s $1.7 million.

Gaming the system

“The system has been gamed by the specialists,” one primary-care doctor told me. The specialists “have the strongest lobbies in Washington and greater representation on influential medical committees.” He cited the example of an expert committee of the American Medical Association, which recommends to Congress the monetary worth of doctor visits and complicated procedures. Of the 29 physician members on the committee, 24 represent specialists and five represent primary-care doctors. I can’t imagine such a committee deciding to recommend a pay cut for specialists.

Last year, the Medicare Payment Advisory Commission, an independent group with less specialty physician influence, recommended a fee schedule that would reduce the disparity in physician incomes. This plan would require that Medicare cut specialist payments 6 percent per year for three years and then freeze them; meanwhile, payments to primary-care physicians would remain unchanged for 10 years. In the end, these changes would lessen the disparity between primary-care physicians and specialists, but they might not be sufficient to encourage more medical students into primary-care residencies.

The American Medical Association and the American College of Cardiology vehemently oppose such a formula. The American Academy of Family Physicians also opposes the proposed cuts, though the group’s president, Glen Steam, said that although income “does not have to be redistributed,” if that “is what it took, it is not an inappropriate option.”

Most specialists with whom I have discussed the issue agree that primary-care doctors should be paid more, but most oppose increasing primary-care payments by decreasing specialist payments.

I believe that the government needs to increase Medicare payments for coordination of care — for the work of doctors in such fields as internal medicine — and decrease payments for procedural care. This would pave the way for market forces to entice medical students to enter specialities like internal and family medicine. In the transition, Medicare need not decrease overall physician salaries — otherwise, smart and talented students would be deterred from medicine entirely and stifled by the average medical student’s debt burden of $161,000.

Understandably, income inequality among physicians may not engender too much sympathy among patients. Even primary-care doctors earn roughly four times more than the median household does. In fact, 16 percent of the country’s sometimes scorned “1 percent” is made up of medical professionals.

Is it any wonder that surveys show that two of three Americans think that doctors are “too interested in the money”? As the shortage of primary-care doctor worsens, patients need to speak up — since, after all, much of the physician’s salary is coming from their pockets, directly or indirectly.

Manoj Jain is an infectious disease physician and contributor to the Washington Post and The Commercial Appeal.  He can be reached at his self-titled site, Dr. Manoj Jain.

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  • Dike Drummond MD

    There is so much that is nonsensical about healthcare reimbursement … not least of which is the MASSIVE conflict of interest in nearly every medical encounter. When have you ever heard this conversation for instance:

    “Mrs. Jones, you have a nasty low back there and I strongly recommend surgery .. HOWEVER it would be a conflict of interest for ME to do the surgery MYSELF … so I am going to refer you to a group across town with which I have no financial relationship.”

    Like that would ever happen. Specialists have a HUGE financial incentive to over diagnose, over treat and over earn. If your only tool is a hammer and you get paid lots of money every time you use it … then everything looks like a nail.

    Physicians like to think of themselves as somehow on a different moral and ethical plane than business people (the bean counters) when we are just as clearly and directly motivated by money as any used car salesperson on commission. If we want primary care as a priority in our society, we simply MUST change the reimbursement formulas and our entire medical system is stacked against us ever being able to make that change.

    Muy frustrado AND a large source of stress and burnout to primary care providers.

    Dike Drummond MD

  • Kathleen (Kathie) Clohessy

    I could comment on this for a very long time, because so much is wrong with the system that it would take that long to do it well. However, I will keep this short.

    From my perspective as a patient, primary care physicians are creating this problem by limiting the scope of their practice to a few diagnoses and treatment options with which they are comfortable and sending everyone else off to a “specialist” for care. True, the primary doctor may spend 10-30 minutes with me asking me questions about what is wrong and doing a brief physical, but after that–about 80% of the time– she will send me off to someone else for further evaluation and treatment. COPD? See a pulmonologist. Fibromyalgia or RA? Go to a rheumatologist. Chronic pain? See Pain management..Numbness and tingling? Neurology..CHF Cardiology…No matter what the problem, it seems that “primary care” is about the initial diagnosis, and the TREATMENT happens somewhere else.

    I am not talking about consultations here, either. I am talking about primary doctors who deliberately choose to avoid the potential ( legal) ramifications of treating anything but the most simple acute illnesses because they do not want to be sued. The result is that patients are shunted around from one specialist to another, each one wanting to do another procedure (because that is how THEY get reimbursement) without improving the patient’s overall condition one bit. The resulting “care” is fragmented, expensive and time consuming and leaves the patient feeling like a diagnosis instead of a human being.

    Patients have no control over this system, but doctors do. The first step is for “primary care” physicians to start living up to their name again and start doing some real patient CARE.

    • Marc Frager

      Why are you surprised that for a $50 office visit, a doctor would risk a $500,000 lawsuit? When malpractice is less of a problem, physicians will be more comfortable “doing some real patient CARE.”

      • Homeless

        So I guess you won’t be surprised that patients skip that $50 office visit to find a doctor who can get the job done.

    • Steven Reznick

      For years at the level of hospital credentialing and under pressure from insurers and review organizations like JCAHO plus economic pressure from specialists well trained internists and family practitioners have been prevented from performing procedures and operations they were trained in and certified to perform in training. I give you the example of EKG reading on hospital panels. Prior to there being a board in cardiology EKG’s were read by PCPs and internists with some extra training in cardiology. When Cardiology became a formal board all the panelists were excluded from reading EKGs unless they were board certified cardiologists. The excluded doctors countered by forcing everyone to take a test in competency created by Dr Marriott. In our hospital three generalists and a nephrologist scored far higher than several new board certified cardiologists. Over time as these panelists retired they were replaced exclusively by board certified cardiologists eliminating a source of revenue for a procedure they were well trained to perform. The same thing occurred with managing respirators in critical care settings and numerous other procedures. This economic credentialing coupled with reduction in payments for visits forced many generalists to see more patients per day in the same time slots. Now some no longer follow their patients into the hospital because the cost of running over to the hospital to see an emergency while reschduling your office patients is cost inefficient and they can not afford that loss. You end up with erosion of skills and planned obsolescence. While med malpractice is one reason for PCPs doing less, economic credentialing and pressure is the real reason. We used to perform the masters two step cardiac stress test in our office. With two dozen board certifed cardiologists in the area now and six nuclear stress test cameras within walking distance it is hard to justify not sending a patient to a board certified cardiologist for the procedure today from a medical legal perspective.
      What PCP’s can do is coordinate your care and make sure each physician understands that they can not diagnose and treat in a vacuum ignoring your other problems and medical conditions. They can advocate for you as a patient and get you to the best people .They can do this without having a financial conflict of interest because they generate no revenue by referring or coordinating or advocating.

      • Homeless

        So the scope of primary care doctor’s scope is coordination of care? Only those with more than one health issue benefit from consulting a PCP?

        BTW, I haven’t found specialists ignore other health problems.

  • Jennifer Syva

    In general, doctors have become sub-sub-specialized that it has inadvertently made quality care obsolete. While it is great that there can be such experts, the average person and therefore patient gets lost and frustrated in the system that results in unnecessary and excessive spending.

    There is much disparity regarding payments, contracts with insurers, etc., among doctors. Years ago I worked in a large orthopedic department in NYC and was tasked with helping a surgeon with very specialized skills in negotiating rates for some of his special cases with insurers. It was hell navigating through that but considering he was compensated more for a carpel tunnel repair (~45 minutes of his time) than for a 14 hour specialized surgery that enabled a quadriplegic the use of an arm – making it possible to work, reduce LT care expenses, etc.

    As a patient I do pay attention to what my insurance pays providers. Most of my doctors are at 1 hospital system in NYC. Due to an issue I went to a specialized hospital that has an intercorporate agreement with my “main” hospital. The same specialists and procedures done in that hospital were paid at more than double that at my main hospital. Considering the care, actually lack thereof, at the specialty hospital, this is infuriating. But since they spend twice as much as my hospital does on lobbying (love reading 990s) and must have someone fierce who negotiates their contract with my insurance they can. Not to mention how the specialty hospital docs refused to consult with my main doctors, at a hospital where they also have privileges at my hospital as part of the agreement.

    A year later, I’m back to my main hospital and am told over and over again how the specialty hospital repeatedly borderlines on falsely reporting things on imaging, etc.

    This type of situation has created a dramatic dumbbell affect among doctors where the ones who actually (i) examine their doctors; (ii) establish some type of relationship with the doctor; are paid $95 for a consult when a provider with the same credentials from the same institutions (training and all) with one of these “powerhouse hospitals” earns $275. Same zip code, less than a block away from each other, in their respective hospital’s FPA, etc. And the higher paid doctor’s notes are filled with gross inaccuracies to boot.

    If ever fixed, it will be painful. The issues in US healthcare are so big – from laws, insurance companies, HOSPITAL ADMIN, ever-changing technology, etc. Especially considering that the average doctor now days has to play a counter productive and counter intuitive game at a major hospital to earn a livable salary. And even then, it is much, much less than the average person knows who thinks their doctors earn most of what is billed, which is far from what actually happens.

    Doctors need to be able to be doctors, have sufficient support, etc.

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