Wednesday, November 21, 2007

The End of Delayed Gratification

Perhaps no greater stimulus for performing difficult tasks exists that are to become a person's vocation is that of delayed gratification. Successful lawyers, financial analysts and business people know this. But few are more a master of delayed gratification than a physician with their long, poorly-paid residencies - even more: surgeons.

The profession of surgery, after all, is a hands-on endeavor, involves countless hours at the patient's bedside and even more in the operating room to perfect the craft. The weeding process of individuals to find those with the "right stuff" to become a surgeon is remarkable: only the strong survive. Admittedly, that "worth" to some is just to have a nascissitic "bragging right" to calling themselves "surgeon" or the altruistic and admiral goal of being skilled at helping one's fellow man. But in the end to many, it is the hope that some day their efforts will pay off personally and financially. To this end delayed gratification, the hope that some day it will all be worth it, plays a significant role is helping an individual complete the training gauntlet.

But these times are difficult for anyone contemplating becoming a physician, let alone a surgeon. The commoditization of the profession, the ever-increasing regulatory environment, the decline of revenue, and the rise of liability - all serve to remove the carrot of delayed gratification dangling before the horse.

Josef Fischer, MD's excellent commentary appearing in the Journal of the American Medical Association last week illuminates the issues:
In the United States, approximately 1000 general surgeons complete their residency training each year. These surgeons have completed 4 years of medical school and 5 clinical years of residency, and during residency many also have spent 1 or 2 years in a research laboratory. Thus, these physicians enter the workforce between the ages of 33 and 35 and usually have $150 000 to $250 000 in educational debt. (editor's comment: some have suggested this number is MUCH higher) The training of surgeons has been stable since the early 1970s, and the number of general surgery residency training programs will not likely increase. Even if new medical schools were established the number of surgeons trained would not likely increase much, because many medical students have lost interest in pursuing a career in surgery.

In small urban or rural hospitals, which care for approximately 54 million patients, general surgeons care for emergencies and trauma and perform a variety of operations. They are essential to the provision of adequate health care and often are the most well-rounded surgical clinicians in the area. Therefore, training only 1000 general surgeons per year will not meet demands. Specialization also affects the general surgical workforce. Presently, approximately 70% of graduating surgical residents pursue specialized surgery training, and this percentage may be increasing. Thus, only about 300 to 400 of the 1000 general surgeons completing residency each year will choose general surgery practice.
But the historical and future impacts of reimbursement for surgical services is articulated nicely by Dr. Fischer and spells the end of any hope of delayed gratification for surgeons:
In 1993, Congress declared a redistribution of funds from proceduralists to primary care physicians.10 Initially there were 2 conversion factors—1 for medicine and 1 for surgery. The conversion factor, ie, the multiple of the RVU for payment, had the added advantage of demonstrating where costs were increasing. The 2 conversion factors demonstrated conclusively that surgeons did not increase their utilization when reimbursement decreased (because, for example, patients have only 1 gallbladder, and the indications for its removal remain constant). Other specialties increased their utilization, a process that continues to this day.11 In a refining effort to shift money to primary care, a third and separate conversion factor was developed in 1995. By 1997, it was clear that separate conversion factors were not controlling utilization of primary care and medicine services, causing these 2 conversion factors to decrease. The 3 separate conversion factors were eliminated in 1998, resulting in a decrease for surgery and an increase for medicine and primary care. In addition, more surgeons' practice expense reimbursements are included under the indirect category, now reimbursed at 35% of cost; internists and primary care physicians have a higher percentage included as direct expenses, which are reimbursed at 66%.

A recent Medicare Program review focused on concern about patients with chronic conditions and on compensating the physicians who care for them, not on the technical aspects of Current Procedural Terminology. Seventy-eight percent of Medicare beneficiaries have 1 chronic condition. By contrast, 63% of beneficiaries have 2 or more chronic illnesses; caring for such patients accounts for 96% of Centers for Medicare & Medicaid Services expenditures. It was proposed that patients with chronic disease were not receiving care because physicians were underpaid. The most frequently billed code in the physician fee schedule was revalued upward, and payment was increased by 37%. This year, the estimated $4 billion impact of the proposed changes in work RVUs resulting from the 5-year refinement will require that a budget neutrality adjustment be made.16 Fees for certain procedures, specifically for malignancies in women such as hysterectomy (–4.7%), partial mastectomy (–5%), and resection of ovarian carcinoma (–2.9%), decreased between 2006 and 2007.

In addition, the 90-day global period means that no additional payments will be made for any physician services that can be associated with the initial procedure, regardless of how much work the follow-up entails. Other physicians can see patients daily for the same illness or situation and can bill and collect each time.

No other profession or situation apart from medicine experiences denial of payment for services already performed. (ed: emphasis mine) At times, it seems that health insurance companies employ staff whose only goal appears to be to deny payment for services already performed.

These sequential decreases in reimbursement provide a substantial disincentive to enter these branches of surgery and may have profound future consequences. The self-designated specialties of internal medicine, medicine, and pediatrics have substantially increased members since 1985, while general surgery membership has remained level.
While I appreciate all of the new health care proposals to provide univeral health care (and certainly our system is broken), unless we address the shortages of physicians in general, we won't have professionals where the rubber meets the road: that is, physicians capable of performing the remarkable skills to which we and our health care system have become accustomed. Without them, the final policy enacted won't be worth the pile of paper upon which it is penned.


Reference: Josef E. Fischer, MD. "The Impending Disappearance of the General Surgeon." JAMA. 2007;298(18):2191-2193.



The Happy Hospitalist said...

Wes, you bring up some good points, but it is all relative in nature. From my blog:

The average screening colonoscopy takes 13.5 minutes to do. In 1992 that colonoscopy was "worth" 8.48 RVU's. A level 3 (the most common) office visit by a primary care physician was worth 1.0 RVU's. An average level 3 office visit will take 15 minutes, if you are lucky.

Common sense says the payment structure was ridiculously skewed toward procedural medicine and medicare felt it was worth more than 700% in terms of training, time and effort. Unbelievable.

Fast forward to 2007. A colonoscopy, which is probably much easier today (given advances in technology/fiber optic/imaging) is now worth 5.56 RVU's. A level 3 office visit in 2007 is worth 1.66 RVU's.

So instead of being worth 700% more, it is no only worht 400% more.

Who's getting the shaft?

GI because their procedure is "worth" 1/2 what it was 15 years ago?

Is primary care "thriving" because their value is worth 66% more than it was 15 years ago?

You can see that statistics bend the truth. The same time is valued 4x more for GI's colonoscopy than for a similarly involved time contraint for a primary care visit.

The ultimate outcome is where are the doctors going.

They are following the money, procedural medicine. Subspecialty surgery.

JAMA stated it bluntly this week.

Dr Goodson's commentary.

Primary care hasn't benefited from the RVU system. Far from it.

It is getting decimated.

DrWes said...

"happy" h-

What value do we extend to advanced degrees and specialization and the costs inherent to that training? Should that expertise be worth the same minute-for-minute as a generalist? Certainly this is not the case in other business models. But I am more intrigued about this:

Isn't this perfect? What a great detractor: getting different specialists and generalists to argue over whom deserves the money that Medicare distributes the most! It makes the very physicians doing the real roll-up-your sleeves work of day-to-day patient care look like money-grubbing narcissists, while the real culprits secretly pocket huge sums of money in the form of grotesque markups on non-professional technical fees that average at least 10 times what the doctors are receiving and make the underinsured pay higher-than-market costs relative to the insurers’ pre-negotiated rates. Where's the discussion about this?

For instance, hospitals are spending like drunken sailors on new construction in the name of remaining "non-profit" or “serving our communities” and insurers continue to show profits of 10-24% LAST YEAR - all at a time when millions of Americans can't afford insurance and doctors (yes, primary care AND specialists) are taking it in the shorts, getting fed up, and leaving the profession (or choosing other fields) in droves.

Paraphrasing Dr. Fischer’s commentary, when Medicare began the RVU process, it paid "usual and customary reimbursement" and instituted the Resource-Based Relative Value Scale payment system based on these amounts. When it became clear that there was not enough money in the system to supply the historical fees as well as new increases in other encounters, reimbursement was devalued precipitously. Budget neutrality followed; there would be no additional reimbursement for unusually complex procedures—an increase in one area would be followed by a decrease in reimbursement elsewhere. In the current system, procedures that take 1 hour or 6 to 8 hours, are reimbursed exactly the same whether performed by a rookie or one with many years of experience. Yes the technology is better, but is it cost effective? Or just “cool.” Does the fact that a procedure takes less time justify cost reductions at a time when expenses like liability insurance of personnel costs are exploding? On that note, the need to practice defensive medicine because of liability concerns has also exacted a huge cost to our system. (Why the heck each state doesn’t have some form of tort reform is beyond me…)

Is this reimbursement system tenable any longer? Unfortunately, it is what we are left with and few have proposed a better system – so we keep covertly re-allocating monies to different physician groups. Meanwhile, insurers are licking their chops at the opportunity to perpetuate their monstrous bureaucracy by insuring even more “uninsured” Americans while we argue about the relative table scraps they throw to the floor.

The Happy Hospitalist said...

Wes I had a response but somehow it didn't get through the system. So I will try again and explain my position.

I have never maintained that specialists and primary care should be reimbursed at the same rate. The thing that matters is the gap in reimbursment will drive a resident determination on going into primary care or specialty care. Right now that gap is striking. And the incentive is straight to the bank of specialty care.

The RVU system, by nature of it's fixed pot will always be a system of redistribution. Taking from one will give more to others. The question is. It is a LOSE-LOSE system. Nobody will ever be happy.

You're unhappy.

Primary care has gone way beyond unhappy. It is dead.

Medical students are talking with their wallets. They are saying primary care is not worth their 7 years of delayed gratification for the rates of compensation involved. You argue that primary care has been rewarded handsomely in the RVU system.

It is simply not true. The gains are miniscule, when compared to overall income levels of specialty care.

Medical students would rather delay gratification 20-30% more in order to achieve income levels 2-5+ times what they could by just going through another 2-4 years of training.

Primary care has died. It has died because the RVU system says the value of their work is not enough, compared with specialty care. Even when corrected for the "specialty factor".

And the rate of rise/"gains" of primary care you talk about have in no way kept up with inflation/practice costs.

Every field has their own slope of death, the income levels needed to "guarantee" a steady stream of residents by way of delayed gratification

You argue that general surgery is dying. To me, that indicates that reimbursment rates are dying to a point where delayed gratification for this field is not worth it.

Given time, it will happen in all specialties: cards, ENT, ortho, GI, etc. etc. etc.

Are we there yet? No. As witnessed by the steady stream of medical students/residents declaring their interest in such fields.

You yourself described your own 18.5% decline with new medicare rules.

This is part of the RVU killing of medicine. It is taking away from all fields. I can assure you, if your 18.5% is redistributed to primary care, it will be no where near enough to save the field. You see, your field is too small compared with primary care to notice any major difference.

It is just a facade.

The recent gains by primary care this year seamed "large" For an average internist, maybe $10,000 gain. A lot of money for some, but the starting point is so far below specialty incomes that it makes no difference in the motivation of medical students. The gap is still so large.

It will not save primary care.

And that drives student decisions. Delayed gratification is still there to bypass primary care.

My stance has nothing to do with pitting doctor against doctor. I am calling a cat a cat. Money talks for medical students. And the money is pointing towards specialty medicine. But given time, as the RVU breaks all doctors, the students will dry up. They will become Wallstreet, lawyers, business leaders, bankers.

They will not become doctors.

Fields where income is not restricted by a giant anti-competitive government agency called Medicare.

I am quite fascinated on why it is OK for our government to price fix and monopolize but it is not OK for doctors to organize and set prices.

The answer as I see it is either doctors walk out en masse, which you say on my blog will never happen, or the AARP marches on Congress when pockets of docs walk out creating insurance without access.

So just to clarify for you Wes, the RVU system is bad for all doctors. It has already killed primary care. The slope of death has already arrived. But given time, the RVU system will kill all of medicine, each field having it's own slope of survival already pre-determined.

Imagine a 70% cut in income for EP. Would that be the death of your field? How about 50%? 40%?

I don't know the answer. I do know that current reimbursment rates for primary care have killed the field off.

That's why I'm such an advocate of market economies where patient and doctor set the price. WIN-WIN.

Doctors compete on price and quality or they become irrelevant.

We are not as far off on our positions as you think.

Happy Thanksgiving.


DrWes said...


I agree. We're singin' pretty much the same tune, just different harmonies...

Have a great Thanksgiving...

Unknown said...

Interesting commentary between the two of you-- and indicative of why we're in the mess we are.

RVUs set top-down are arbitrary and based on a lot of justification factors that have nothing to do with real demand. In the rest of society, demand, ability to pay, and pricing elasticity create a range of choices that market forces allow to survive or not. If the public won't pay for a GI doc's (large) salary in doing the colonoscopy (and they want it) others will figure out how to provide the service for less.

In a market economy (which medicine isn't), the amount of resources deployed against a problem are dictated by the market and what will make consumers feel appropriately protected and served. It will take retail pricing to truly address the specialist vs. PCP pricing differentials. As we see in sleep meds, efficacy and value aren't necessarily what consumers choose

Anonymous said...

I fail to see your reasoning that all time spent should be valued the same, which seems to be where you are going. This is a common conceit of primary care doctors, who seem to divide work neatly into things that involve thinking and things that don't but presumably involve something else. I have yet to see a skillful surgeon who wasn't showing some evidence of thinking as he was doing surgery. Lets take cataract surgery as an example (It is the most common major surgical procedure performed in the U.S., by a significant margin over any other procedure.) If I take ten minutes to perform a case, by your reasoning, I should be paid less than if I had taken thirty minutes, even if the shorter operative time actually represents a more refined and skillful operative technique. And the result? Hopefully quicker recovery and return to normal functioning than with the longer surgery. But under Medicare, ten- minute cases and thirty-minute cases are paid the same. Go figure. There is actually a disincentive to add value by perfecting technique. (Unless you can make it up in volume.) And as mentioned above, a 90-day global-fee-inclusive period of care applies.

And as for favoring "proceduralists" over "cognitive" specialties, the amount paid today by Medicare for a cataract operation, in actual numbers of dollars, is less than was paid in 1967, the year part B was established. How much of a reduction is that if calculated in constant dollars (for a much better and less risky operation, mind you)? Eighty-three percent. A cataract operation today is discounted to 17% of its initial value when Medicare part B was established. Could you say the same about a routine internal medicine office visit? No.

So please, spare me the ridiculous comparisons between the time spent in doing procedures and the time spent in an office visit. They are as apples to oranges and represent entirely different degrees of risk, requirements for performance and obligations for after care.


The Happy Hospitalist said...

anonymous, I have not infact said that time should be valued the same.

Read it again.

Specialty medicne should be paid at a higher rate.

However the gap in reimbursment is striking and the reimbursment of primary care is affected directly be the reimbursment of specialty care by way of the fixed pot of money called Medicare Part B, through the LOSE-LOSE system of RVU.

Reimbursment of primary care is no where near what it should be, when compared with specialty medicine, so the trend to specialists will continue.

In the current system, the only way to increase primary care reimbursment is to decrease specialty reimbursment.

But as Dr Wes points out, huge drops in his income occur to redistribute. Unfortunately, his huge drop is a small bucket for primary care because primary care is so larger thatn specialties on a realitive basis, much smaller.

The relationship between reimbursment rates is as important as the actually dollar amounts.

I think I have explained that. And Dr Wes brings up a great arguement regarding delayed gratification.

At one point in time, even though primary care made so much less than specialists (before RVU), their income was still high enough to delay gratification.

Primary care made enough to make it enticing, even though it was much less than specialists.

Not any more. So even though the gap may have narrowed between primary care and specialists, the starting points were so skewed that the difference is still shocking.

Only now school loans are $200K instead of $20K and $150,000 buys half as much now as it did 15 years ago.

It's all relative and the difference, while smaller, is still striking.

Look at my blog entry from last week and you'll understand my interpretation of reimbursment rates in the last 15 years.

Specialists should be payed more, just not at the expense of primary care.

And they are.