How much Medicare pays doctors requires context

How much Medicare pays doctors requires context

The Centers for Medicare and Medicaid Services released a massive amount of information regarding how much money it paid out to individual doctors. For the policy nerds out there, here is the original data.  For everyone else, here is a simple way to look up how much your own doctor made. I decided to search for myself in the database to discover how much Medicare paid me.

Compared to the highest paid doctor — an ophthalmologist practicing in West Palm Beach — I made almost nothing. Now most ophthalmologists do pretty well, but this guy “made” over $20 million in 2012. Just from Medicare alone!

Well, when digging into the numbers, that doctor’s compensation was only $2.5 million. Office overhead cost $6.1 million and another $11.8 million went to “drugs and other” items.

The point that this doctor and others who have been singled-out by the news media have made is that either the highest compensated physicians are simply the one person billing on behalf of a large group of physicians or a huge chunk of the money paid to them is just being funneled from Medicare to pharmaceutical companies while only virtually entering the physicians’ hands.

In 2012, I never once saw a check from Medicare. I never held it, or stashed it in a bank vault, or did one of those Scrooge McDuck swimming through the money pit moments I remember from childhood. Instead, the $112,134 that Medicare paid me in 2012 went into a “lockbox” held by a large corporation that employs emergency physicians and contracts with hospitals to staff emergency departments. In fact, all the money for services for which I charged patients — whether the patient paid via Medicare, Medicaid, Kaiser, Blue Cross, or even out of their own pockets — ended up in that lockbox.

Some of that money made it to me. Of course, not all of it did. Some went to pay for the salaries of the people running that large corporation. And since that company is a publicly traded firm some of that money probably went to shareholders too. But, by no means did all of that $112,134 make it to me.

But the release of the data by CMS and the headlines from some newspapers will irresponsibly misled the public into thinking that thousands of millionaire doctors are driving around America in Masseratis and Bentleys at the expense of the American taxpayer.

Let us — for a moment — look at how much I got paid by Medicare. Specifcally, let us look at the care of the 60 sickest critical care patients that rolled into my ER in 2012. To care for those patients, which according to Medicare rules requires a minimum time commitment of 30 minutes, I got paid a whopping $181 per patient. Today I took care of a similar patient who, but for the grace of God and the skilled hands of myself and several emergency nurses, would have died. That’s only worth $181?

Maybe CMS timed this data dump to distract from the fact that the Senate approved a bill to cut further what Medicare already pays physicians. I certainly believe that Medicare overpays for some services (mostly procedures like those performed by those super-rich ophthalmologists) relative to others (intellectual services like primary care, psychiatry, etc.).

But I can tell you one thing.

Saving your life is worth more than $181.

Cedric Dark is founder and executive editor, Policy Prescriptions.

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  • ISurgn

    What procedures are Ophthalmologists overpaid for, in your opinion? We’ve already seen so much slashing of cataract surgery reimbursement that we can make more money just staying in clinic than we can by performing vision restoring surgery and following the patient for the 90 day global period. Everyone loves to say we’re making $600 for a ’15 minute surgery’ when in all actuality it takes a lot more time to do IOL calcs, make sure a patient is well informed about the procedure, get the patient appropriately anesthetized, do the surgery, check post-procedure vision, and follow up with them in 2 days then 2 weeks then 2 months or however the Ophthalmologist does his/her follow up.

    Quite frankly Dr. Dark I hate to see us physicians in-fighting with snide remarks like you and others make. I’ve never said that PCPs don’t deserve more money. That is a separate issue from how much I’ll be reimbursed. And maybe you know some Ophthalmologists making a killing, but I can show you right now job offers for an ER physician pulling 16 shifts/month straight out of residency that will make more than I will for my first 5 or 10 years out of my Ophthalmology residency. Please take some time to understand my profession and what our individual earnings really are like without seeing broad averages skewed by high volume refractive, plastics, or retina surgeons. I’ve worked a couple of months in the ER alongside Emergency Medicine interns, have you been in my specialty’s clinic and OR enough to understand what my field is like?

    • Cedric Dark

      I was being a bit sarcastic when referring to you “super-rich” ophthalmologists. But your comments are well appreciated. I did do ophthalmology as an elective when in medical school, which was all clinic and no OR, but that is probably more than many non-ophthalmologists. And yes, having to perform eye exams in the ED, your exams are really, really time consuming.

      But when you break down the data – and again its aggregate payments – the top three profession compensated by Medicare are heme/onc, radiation oncology, and ophtho. A large portion of that appears to be reimbursement for injectable drugs and not necessary physician take-home pay, which I was attempting to explain.

      The payment balloon will be squeezed soon by CMS, and I expect – based on that data dump – the pressure is going to be applied in your direction.

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