Most of us would agree that health care costs are too high in America. They must be controlled or else we won’t have a sustainable health care system here. And we should acknowledge that, on average, all doctors in America are paid higher than their overseas counterparts. But we should also agree that expenses for doctors to earn a degree, maintain that degree and licensure, and pay their malpractice premiums is also much higher than the rest of the world.
So why has Elisabeth Rosenthal of the New York Times decided to bash specialists with her front page story entitled “Patients’ Costs Skyrocket;Specialists’ Incomes Soar”? Perhaps the subtitle of the story explains part of the reason: “When a Doctor Becomes an Entrepreneur, Small Procedures Offer Big Returns.”
We should acknowledge that several moons have aligned that make such an article newsworthy.
First, of course, is the remarkably unaffordable Affordable Care Act. The new law is confusing for patients (to say the least). Not only are terms like deductibles, co-pays, subsidies, and co-insurance confusing, there is absolute uncertainty about which doctors or health care system can provide once their insurance is purchased. Is a doctor “in-network” or “out-of-network?” What, really, do I get for Platinum, Gold, Silver, or Bronze coverage? How many mental health visits can a patient have with their particular policy? Because every one of the hundreds of different policies has different “rules,” patients are left to fend for themselves like never before. Patients are confused. Doctors, having little clue about anything regarding such care limitations and cost structure, also have little understanding about the programs sold, so they become easy targets.
Second, is the current political pressure to develop physician payment reform. It has long been known that health care was on an unsustainable cost path. Numerous Congressional fiats have been used to control physician costs. There was the Medicare Volume Performance Standard (MVPS), for instance, that was later replaced by the infamous and never-enforced Medicare Sustainable Growth Rate (SGR). Why hasn’t Congress enforced their own law? Simple: because doctors matter to seniors worried about health care and seniors vote. Oh, and doctors take care of Congressmen, too. But let's not mention this, Ms. Rosenthal - you see Americans might think their doctors are actually worth their salaries.
Third, was the Stimulus Package, formerly known as the American Recovery and Reinvestment Act of 2009 used to bolster the American Economy. Within the confines of this bill were several features that laid the groundwork to the later Affordable Care Act. These included the Health Information Technology for Economic and Clinical Health Act (HITECH Act), another 25.8 billion for information technology, $1 billion for “health and wellness”, $1.3 billion for “comparative effectiveness research” and (most important for specialists) a 40% cut to Medicare technical revenues to specialists who perform office-based procedures without a corresponding cut to similar fees paid to hospitals. This final provision proved devastating to private specialist offices nationwide, forcing most of them to become employees of large health are systems. The move was massive and has forever changed patients’ access to their physicians and elevated costs for them dramatically. With such a move, doctors must now serve two masters: their employer and their patients. All those pretty buildings, big screen TVs, administrator salaries, CEO salaries, and computer systems are very expensive. Gee, who knew specialists’ bills would skyrocket as a result? Yet according to Ms. Rosenthal, it's the specialists' fault.
But this is not the entire story. While specialists' bills have skyrocketed, their incomes have not. I should know, because unlike Ms. Rosenthal, I am a real live US specialist and I have the W-2’s to prove it. Again this year, another $20K less.
Why? I believe this year’s cut was due to how I am paid. (Because I am sworn to secrecy about such issues by my employment contract, I can’t delve into all the details, but let’s acknowledge to points: (1) productivity is important to employers since they want to get the “most bang for their buck,” and (2) most doctor’s work is “valued” based on a Medicare metric called “Relative Value Units.” )
This post is already too long to delve into details about how procedures are “valued” by the system, but suffice it to say, they are. Every procedure has an RVU value. The more you do, the more you get credit for. This really bothers policy wonks who feel this is the single reason costs are so high in medicine. Never is mentioned the next fact: that Medicare has a habit or “bundling” several procedure codes into one to cut costs already. What does this mean for the doctor? It means they earn fewer RVUs for the same work. So doctors are spurned to do more and more to make up the difference.
Until they can’t any more. After all, there are only so many hours in the day.
Last year my specialty had a huge change in RVU values for our expensive specialty, and because I am well-established, I have lots and lots of patients in my clinic. Adding new ones has become nearly impossible. But new patients means new procedures. And without procedures, I invariably have my pay drop thanks to these hidden changes to how I am paid.
Finally, there’s the problem of Ms. Rosenthal’s salary data. She received it from an industry-standard company that makes money reporting physician salaries to hospital systems. They claim their data is based on physician salary surveys, but I for one can attest that I have NEVER been asked to reveal my salary to this company. Could they be getting their data from hospital systems instead? Of course.
I have had the opportunity to inquire about the MGMA’s data for my subspecialty of cardiac electrophysiology. Their dataset supposedly represents only about 400 physician salaries (10%) of the entire nation’s 4000 or so electrophysiologists. We have no idea where these data were collected. Yet the salaries are stratisfied by RVU productivity into percentiles: 10%, 25%, 50%, 75% and 90% or better. If you earn only a 10% RVU value, you are a dog in an employer’s eyes. If you are 90% or better, you are worshiped.
But for electrophysiology, several interesting tidbits exist: to achieve a 90% RVU value, the MGMA says that doctors must achieve over 19,000 RVUs per year as a specialist. Now I work my fanny off. I am on call every third week. I cover four hospitals and do plenty of procedures. I have never made that kind of RVU productivity as shown in the 90th percentile. Not even close. Might this be a unachievable carrot that is being dangled before specialists' eyes?
I was so amazed by that statistic touted by the MGMA that I asked our hospital administrative leadership to identify who the institution (or doctor) was that was producing like that. After all, if I could learn how they are producing, I might be able to improve my efficiencies, right? Yet because the MGMA’s “benchmarks” are proprietary property, no one could identify the physician producing like that.
Which brings me back to the salary figures Ms. Rosenthal quotes in her inflammatory front-page story in the New York Times. They are non-transparent. They are skewed and cherry-picked to make her point. And while some salaries might be representative for some areas of the country, I suspect most are not – especially for those in competitive health care markets. Ms Rosenthal never mentions the regional differences in physician salaries that exist.
It seems there remains a real need to demonize physicians, especially specialists, as we proceed in health care reform. In a system that has devalued primary care so dramatically, perhaps this is a way to gain favor for a shift in salaries to the primary care doctors. Perhaps it’s a need to cut costs for large hospital systems that jury-rig their compensation structures on non-transparent benchmarks like the MGMA. Whatever the reason, specialists’ salaries, jacked up my hospital systems eager to hire the most marketable talent, will remain easy targets. After all, it’s much easier to point the finger at specialists that struggle to see all of the new patients, than to acknowledge the shortcomings of the very system that has gotten us where we are today.
Case in point: Most hospital-system CEO’s in Chicago salaries exceed many millions of dollars. Salaries and benefits of pharmaceutical and insurance companies exceed ten times that of hospital system CEOs.
But better that Ms. Rosenthal doesn’t mention these salaries or the other infrastructure changes that have gotten us where we are today. After all, it’s much easier take a cheap shot at specialists in the New York Times.