Even before MedPAC finalizes a long-term doc fix proposal, the complicated – and expensive – task is proving difficult.
The Medicare Payment Advisory Commission, which advises Congress on Medicare payment policy, is drafting a plan to permanently replace the program’s current method for paying physicians. It intends to get a proposal to Capitol Hill in October, but today’s draft already is sparking controversy.
The current system, put in place in 1997 to restrain the growth of Medicare spending, has had the unintended consequence of requiring larger and larger cuts in physician pay. But Congress has always stepped in to block those cuts. Despite bipartisan consensus that the system needs to be permanently changed, Congress has failed to act. And each year it waits, the cost of a permanent fix rises.
Under the plan drafted by MedPAC staff, physicians still would lose about $100 billion in Medicare payments, coming mostly out of the pockets of specialists. Reimbursements for primary care physicians would be frozen for 10 years, and specialists would see a reduction in payments for three years, at which time their rates also would also be frozen.
Still, according to MedPAC, there would be about a 2 percent annual increase in federal spending per Medicare beneficiary.
That leaves another $200 billion over 10 years that would need to be found elsewhere to pay for the fix. MedPAC intends to propose how to come up with that money, although there were few details today. The staff recommended that this burden be shared by other parts of the health care system, including beneficiaries, hospitals, durable medical equipment, labs and drugs.
A representative of the American Medical Association said that physicians will have problems with the initial blueprint, because it still would mean reductions for many.
MedPAC staff presented the plan to the full commission today as a starting point for discussion.
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While I’m sure well-intentioned, this looks like a case of MedPAC trying to get first dibs on cuts to other parts of healthcare before the Joint Committee comes up with its proposal. The problem is that most of the cut areas suggested by MedPAC have already been earmarked as ways to help achieve the Joint Committee’s goal of $1.5 trillion in spending cuts over the next 10 years, and double counting is not allowed!
This very issue has been written about in a white paper, “The Sustainable Growth Rate: The Elephant in the Room of Deficit Reduction.”
Ken Perez
Director of Healthcare Policy and Senior Vice President of Marketing
MedeAnalytics, Inc.
It seems to me physicians have probably been getting paid more than they should have for a very long time. Now that they are used to that, they don’t want to get paid less! I thought people became physicians to help people get well no to become miliionaires!
MedPAC’s proposal for a $200 billion spending increase compared to the baseline that everyone endorsed last August is too generous, but raises a valid point: all of the cuts should be borne by specialists. In the current issue of Health Affairs, Laugesen and Gilied note that orthopedic surgeons have net (repeat: net) incomes averaging $442,450 — way more than their counterparts in other rich countries. US pay levels have artifically plumped up thanks to our oligopolistic and monopolistic hospital markets. The Super Committee should complement necessary and appropriate SGR savings with measures designed to strengthen the bargining power of private payers, so that public savings don’t get shifted onto private premiums. Conservatives are rightly concerned that price controls breed inefficient organizations that are more interested in their employees than their customers. The only thing worse than price controls is price fixing.
I’m an Orthopaedic surgeon, but not a millionaire. I find the previous 2 responses typical for people that have NOT, repeat NOT, spent 30 years of their lives going to school, residencies and fellowships, all the while accumulating debt. In the meantime, many others traipse off to law school, get an MBA and make six figured salaries 2 years out of college. Now that I’m out practicing with overheads bloated by government mandates and ridiculous malpractice premiums, you have the gall to compare what I make with other “rich” countries? Are these the same countries that have their wealthy people come here because of BETTER care? I care about my patients, but as hard as I work, I deserve to make a good living as well. You want a discount operation, go to another “rich” country and try them out. Let me know how that works for ya.
I’m an orthopedic surgeon and am very pleased with the proposal. It is exactly what we need to start equalizing pay between medical specialties. Read my post on Health Affairs to see how it would help.
http://healthaffairs.org/blog/2011/09/07/physician-payment-reform-an-opportunity-to-bolster-primary-care/
As long as people want service on demand the health care system and politicians respond to this. That means more hospitals and more physicians, both primary care and specialists. I don’t know where the $440,000 average income for Orthopedists comes from but I can tell you that is is probably not showing the true picture. That may be the average but it is probably not the mean.
To expect service on demand 24/7 hospitals must have the staff and equipment to respond. That is why it costs so much to be seen in a hospital ER even for relatively minor problems. How much should an Orthopedic surgeon be recompensed for being on-call for a weekend? Most hospitals cannot afford that expense.
I think this whole discussion misses an important point. We need to look at Helth Care as a source of jobs not just for physicians, nurses and other post graduates but also an entry level source of good paying jobs for those with high school and technical school training. It has been a great entry level with potential for advancement and on the job career training.
It certainly doesn’t require $200,000 to create each job.
I’m one of the greedy, overpaid specialists, an Oncologist ,and after 18 yrs in medicine I’m not a millionaire either. I think that people who don’t know what they are talking about just shouldn’t comment. Primary care docs are grossly underpaid and that is why they are going to be protected under this plan. Of course they are not going to get any kind of revenue increase either and their overhead will continue to rise. I see pts regularly who either can’t find a PCP or don’t want to go back because of poor service. The quality of hospital care in our area is sinking and the hospital groups are having trouble retaining enough people to do the job. I don’t think Hospitalists will be protected under this plan so that problem will worsen. If I tried to improve my payor mix, I bet I could get Medicare to <40%. After 3 yearly 6% cuts it might just be time to say adios to Medicare just in time for my 50th birthday. Almost every doc I know is disgusted with this situation!
Contrary to what we are told, skyrocketing cost of healthcare has has got little to do physician salaries. My understanding is that, of all the money spent on healthcare by this country, 16% goes to physician salaries. Lets stop picking on the physicians who are the source of healthcare and should be protected and valued. Let’s look at some of the other areas of waste and exploitation. Look at all the cottage industries that have sprung up and leach off of the services provided by physicians…Medical supply companies, home health care companies, implant manufacturers, the health insurance companies, the drug companies, the attorneys….the list goes on and on. These are the areas that need to be scrutinized and held accountable. Without physicians, none of these industries would exist (except the attorneys).
The results of the devaluation of the physician are already being seen in decreasing enrollment in our medical schools. There is going to be a critical shortage of physicians soon. Hopefully, steps can be taken to encourage young people to go into medicine before the shortage reaches crisis proportions.
I am an orthopedic surgeon. I am 67 years old and I can still not afford to retire. I thoroughly enjoy providing care for patients and working 50-60 hours a week. However, Medicare pays us 42 cents on the dollar and is our worst insurance payer.
We belong to an HMO that pays better than Medicare! I will assure you that if there is a decrease in Medicare reimbursements and it crosses our break-even curve our group (12 orthopedists) will stop seeing Medicare patients. The data regarding an net $442,450 income for an orthopedic surgeon obviously didn’t poll the orthopedists n our area.
I’m a first year resident in orthopedic surgery. I’ve been to college for 4 years, medical school for 4 years, and now a total of 5 years of residency. I owe more than $290,000 in student loan debt and that was average for students graduating from my med school. I work more than 90 hrs a week (if you think hour restriction rules actually change the work load i have a bridge in Brooklyn id like to sell you) and make about minimum wage after taxes. I work hard, I care for the well being my patients, and I spend my free time asleep, studying, or trying to be a part of my family’s life. I already make payments on my student loans and will soon have a mortgage and the expense of opening and staffing a practice. I never expect to be a millionaire but after sacrificing so much and working as many hours doing the work we do if people cannot afford to comfortably raise a family then they will take their skills elseware. I could be a millionaire by now if I were this dedicated to any profession but I choose medicine because it allowed me to care for others in a way they were not capable themselves. Don’t penalize those that contribute the most to a system or the system may start to fall apart.
it’s hilarious to me that we have set up this comparative effectiveness institute, and before they even get untracked, it’s been decided that the best thing for health care is to reallocate pay away from specialists. Shouldn’t we at least have an idea of what delivers value?
Primary care is good. We need more primary care physicians. Preention is good. We need more prevention. But the first order of business is to treat people who are sick and disabled NOW, and the most acute future shortages will not be in primary care, qccording to the government’s HRSA studies, but surgical specialists.
And once again, everyone complains about how much orthopaedic surgeons make. Gross income is the wrong measure. Look at what they get paid per unit of work performed. A hip and knee specialist makes on average 6 percent more per RVU than a family practice hospitalist. That is hardly an obscene amount.
Bone and joint disorders are by FAR the leading cause of disability and lot work days in the US. The supply of ortho surgeons, according to HRSA, will grow 3 percent thrpugh 2020 while demand will grow 21 percent. The supply of primary care physicians will grow 18 percent while demand will grow 20 percent. Have you noticed tht everyone has stopped talked about resident enrollment in primary care? That is because it has increased and fill rates are up to 97 percent, up from 91 percent in 2006, due, no doubt, to a 22.6 percent increase in pay according to Medpac.
An ortho surgeon gets about $1200 for a Medicare total hip or knee replacement surgery. In exchange, society gets a mobile, pain free patient who often returns to work, who has been shown to live longer with improved cardiovascular health t a cost per quality adjusted life year that is well below any cost effectiveness threshold you care to name. Further, only about 25 percent of people who need total joints actually get them.
If anything, we should be paying orthopedic surgeons more…not less…because what they do is of urgent need and incomparable value. Of all the ways to become a millionaire, orthopaedic surgery is one of the most noble and beneficial for society.
Here’s a thought. Rather than try to make healthcare in the US a fixed pie, take some money from the other worthless goverrnment activities and put it in healthcare. Healthcare will never be self sustaining financially because demand will continue to grow due to third party payment. if healthcare is the priority, prioritize it and cut the other stuff.
Typed on ipad, so apologies for typos.
As long as our country’s laws are written by lawyers, elected by the funds of special interest, patients and their physicians will continue to be squeezed out of our healthcare system. The Bar Association pays for the election of most of the democrats in congress, so the constant burden of $120,000-$350,000 malpractice premiums for surgical specialists will never decrease, but only continue to increase. And how many other occupations are the service providers under such constant scruitiny of hungry personal injury lawyers? So there will be no curve to “save your #ss medicine” that results in big, expensive work ups for trivial symptoms and findings. The corporate giants that provide heavily marked up medical equipment that our government subsidized system pays for keep many congressmen well funded, so it will be quite a while before the average ICU bed costs less than $100,000-$200,000 to purchase new. Not for profit hospitals that cry poor all pay their top executives seven figure salaries. And Obamacare will even further pit hospital vs private practice practitioner by forcing them into these large ACO models, bringing back capitated healthcare that everyone loved in the 90′s and making healthcare even more of an oligopolic, government subsidized, inefficient system. So it’s easy to start with the group with the smallest Washington lobby, physicians, who’s salaries make up <20% of medicare expenditures.
The article reads:
“…physicians still would lose about $100 billion in Medicare payments, coming mostly out of the pockets of specialists.” (10-year plan).
That’s $10B a year for about 5-600,000 specialists. I’m getting over $16k a year/physician. Somebody’s doing some monkey business here. Which way are they trying to spin this anyway?
I decided to do a quick calculation:
I’m convinced that these numbers are made of air. As you know, $16k is nickels and dimes for most specialists, but many are scared to death. If we assume an income figure of $400k for the average specialist, that’s only 4% of their Medicare income, probably 1-2% of overall. And $10B – that’s only .004% of the $2.5T annual cost of healthcare! We have a long ways to go to get affordable care in this country… unless my calculator’s broken.
Correction – Savings of $10B a year is 4/10% – .4% of the total $2.5T. My calcultor doesnt have enough room for all the zeros lol.
I’m an orthopedic surgeon. We need more primary care physcians. For this to happen, they need to be paid more. There’s no logical reason for a specialist to be paid several times what a primary care doctor earns.
Good discussion. But we seem to leaving out the biggest cost factor of all, the patient. In all of the debate and deal making behind Osamacare, we left out “Patient Responsibility”. Without a doubt our patients are the main cost driving factor. We are a society of obese, diabetic hypertensives, who drive to fast, drink to much, smoke, import and use illicit drugs, ride motorcycles… without helmets. We bitch about a $25 co-pay to see your doctor but have no problems spending $30 for a carton of cigarettes or a movie and popcorn. And when we show up in the ER with our heart attack or broken femur, we gripe because the care is not free and fast! Until people become responsible for their own actions, and stop blaming others for all their woes, none of this will get any better. Politicians will keep on promising benefits and entitlements to groups that will vote for them. The “Eagles” have a great song called ” Get Over It”. It should be our National Anthem!
Well said – but while insulation by third parties has relieved patients of responsibility for costs, at the same time it has allowed physicians – of all specialties – to over-provide, creating a vicious cycle that is unsustainable, if I may be trite. No question however that primary care, which must be the basis of any system, is in need of support. How about letting them have ALL the fed $ and those of us in the specialties let the market determine our fees? Scary, no? Might be hard to sell all that labral / impingement surgery if it had to come out-of-pocket.
Callihan predicted this (What Kind of Life? 1990), we either need to limit care or be prepared to spend an infinite amount of $.
The only way that I can rationalize the comments made by Ms. Grossman, PSH and even some of my orthopaedic surgery brethren, is that they believe a maximum income should be established above which no individual should be permitted to earn, irrespective of profession. If a low six figure salary is too much money for a physician, than for whom is it not? A benchwarming professional athlete? A twentysomething Wall Street trader?
Get value has it right. Total hip replacement has been shown to be the medical service/procedure from which patients derive the greatest improvement in their quality of life. When I ask nonmedical professionals what a surgeon should be paid for taking near cripples, with constant pain and suffering, and a generally unsatisfactory quality of life to pain-free walking and activity, they offer figures like $10,000?, $15,000?, $20,000? This is the value they would place on such an intervention, when compared with other things they purchase in their lives. When I tell them $1200 they are aghast. My medicare beneficiaries are similarly shocked at how little I am paid for helping them. Now if a prolific surgeon performs 300-400 such procedures in a year, giving that many individuals a new lease on life, he/she is overpaid? I should think not. It is a paradox that Americans have little problem with the incomes of those who provide us things that are truly luxuries, but that those who are the most indispensable to our lives should take a pay cut.
Surgeons or physicians of any specialty are not the problem here folks. They are, however, an easy target. If we continue to devalue the profession we will see a steady erosion in the quality of the care provided. Bright undergraduates will look at the opportunity cost of slogging through medical school and the prospects of this profession and will choose another career.
And Dr. Rutherford, I can think of several “logical reasons” why an orthopaedic surgeon should be paid more than a primary care physician: specialized technical skill, increased training, increased risk assumed. There’s a baseball statistic called WAR or wins over replacement. It means how many wins did that player contribute to his team’s win total above and beyond what they would have gotten from a “replacement value” player, someone they could have picked up off the scrap heap. The orthopaedic surgeon’s WAR to if you will, exceeds that of a primary care physician, and his/her compensation should reflect that.
Doctors are just one part of the problem and shouldn’t be assigned any more blame than their fair share! Unlike other industries, cost consciouness is not part of the culture in health care – two generations of health professionals were trained in an industry that pays lip sympathy to costs! Hospital leaders feel they can’t really estimate their operating costs, so they set rates to provide plenty of cushion. Given the number of businesses in the health care food chain, everyone cushioning their bills, and we get a culture where cost containment becomes irrelevant!
The only way out is for hospitals to employ more cost-accountants and for physician leaders to shed their dogmas – replace high-overhead ERs with store front primary care centers staffed with nurse practioners and PAs; stop providing high tech treatments to terminally ill patiens with very little hope of recovery!
Even more important, foster a national culture of health – teach patients how to maximize daily physical activity, shed the car culture, and study ways to simplify and de-stress their lives with Yoga and Tai-chi!