H/T American Thinker
September 30, 2011
The Coming Obama Administration War on
Doctors
By Scott Kirwin
A recent study in the journal "Health Affairs" compared physicians in the United States
with those in Europe, Australia, and Canada and concluded that higher physician
fees, including those by primary care physicians (PCPs), were the main reason
for escalating health care costs in the U.S. In short, the authors of the
study Miriam Laugesen, an associate professor at Columbia University, and
Sherry Glied, appointed in June 2010 by the Obama administration to the
position of assistant health secretary for planning and evaluation, believe
doctors are overpaid.
Glied tried distancing the Obama administration
from the study in a statement after the study was announced, saying that the
study did not reflect the administration's views. Laugesen has targeted
physicians in the past. In her 2009 paper "Siren Song," she compared Congress to Ulysses as
being unable to resist the siren song of physicians' groups. Glied's work has
been no less controversial, penning a study that found "substantial
racial/ethnic disparities in satisfaction with care," implying physicians
were racists.
I presented the study findings to the CEO of a
non-profit hospital. He believes that this study is the first shot by the Obama
administration in a war against physicians to cut health care costs by cutting Medicare payments. There is currently a bill in Congress recommending a
29% decrease in Medicare physician fees, and he believes that the Obama
administration will use this study to negotiate a "compromise" cut of
10%-15%. Since private insurance increasingly uses the Relative Value Unit
(RVU) method to determine their own reimbursement schedules, this would have
the effect of cutting payments not just for Medicare but to private insurance
payers as well.
It is ironic that doctors would find themselves
targeted by the Obama administration. The American Medical Association endorsed
ObamaCare, much to the dismay of a large
portion of its members.
Although the Association tried to walk back its support two years later, the
AMA finds itself in the sights of the administration that got what it needed
from the group, and Republicans who view the organization as providing the
cover the bill needed at the critical time when it could have been killed.
Suddenly doctors find themselves with few friends on either side of the aisle.
Laugesen and Glied's study design suffers from
errors of omission and faulty assumptions although it was extensively cited by
the press. First, it didn't mention the cost of malpractice insurance, which
averages $12,500 per year for primary care physicians but is tiny in countries
with national health systems that do not award large payouts. Second, it called
the cost of medical school in the U.S. "negligible." Medical school
abroad is often free, but American doctors graduate $180,000 in debt that will
cost each $400,000 in taxable income to pay off over 15 years after the loan is
capitalized and taxes are included. Next the study compared Medicare payments
with private insurance payments, but it didn't consider Medicaid, which pays on
average a third less than Medicare for the same treatment.
What is the average pay for a primary care physician
in 2011? Statistics vary. It should be no surprise that health care personnel
placement firms report higher salaries since placement firms encourage lucrative
starting salaries so that they can get a bigger cut after they place a doctor.
But this overstates salaries since most doctors earn these starting salaries
for a fixed time and are then placed on productivity -- whereby their salaries
fluctuate depending on the number of patients they see and the procedures they
perform in a quarter as translated into RVU's. The Bureau of Labor
Statistics reports
a median income for family and general practitioners in 2011 of $163,510.
If salaries are the main driver of escalating
costs shouldn't they escalate? A 2006 study by the Center for Studying Health System Change
reported that in 1995 the average salary for a primary care physician was
$135,036. By 2003 that figure had risen to $146,405, but adjusting for
inflation by using 1995 dollars, the 2003 salary was $121,262, a 10.1% decrease
in just 8 years. Translated into 1995 dollars, the BLS 2011 median income of
$163,510 becomes $110,299. Primary care physician salaries have actually
declined over the past 16 years. Even Laugesen and Glied's fantastic average of
$186,582 is the equivalent of just $125,862 in 1995 dollars, below the 1995
average of $135,036 reported in the 2006 study.
According to the Department of Health and Human
Services, in 1995 the per capita national health expenditure was about $3,950.
In 2009 the per capita
expenditure was $8,086 -- $5,744 in
1995 dollars. Health care costs are soaring -- that's a rise in 16 years of 69%
beyond inflation, but Laugesen and Glied's conclusion is wrong. How can primary
care physicians be the main drivers of higher U.S. spending on health care when
their earnings have fallen over the past 16 years, not risen?
Medicine is a business, but for some reason
doctors are penalized when they begin to treat it like one. As the CEO of the
non-profit hospital states, "[r]elating the income to the costs born by
physicians is a silly comparison. ... That isn't ever done for the lawyers, is
it?"
Doctors aren't to blame for the health care
system mess, but they will soon find themselves held responsible by an
administration that got what it needed from them two years ago and now finds
them expendable.
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