Letters to the Editor

Readers weigh in on reimbursement reform

Robert B. Doherty's article “Does the United States pay its doctors and hospitals too much?” (ACP Internist, June 2012) offers nothing new. We continue to hear about how physicians and hospitals in the U.S. are “paid” more than similar entities in other countries, but this information is not juxtaposed against the absurd costs that physicians incur training and practicing here.

Photo by AbleStock.com
Photo by AbleStock.com

Our colleagues in other countries do not typically graduate with over $200,000 in debt for medical school, not even considering the cost of prior secondary education. Nowhere is there discussion of the soaring overhead, including costs of electronic medical records, hiring staff, and purchasing staff health insurance and malpractice insurance, that weighs so heavily on physicians, especially those in primary care.

I have asked my Washington colleagues to tell me how much of each health care dollar is spent to defray liability expenses. Although they can quickly tell me what we spend on patient care in Medicare and what physicians are “paid,” there are no data about escalating overhead, specifically liability costs. Where are those data and why aren't they discussed as openly?

When I left primary care internal medicine in 2001, my overhead had risen from 30% in the early 1990s to well over 70%. This was with a steady decrease in the amount of reimbursement and a steady increase in the amount of work required to bill. This was with ballooning costs for malpractice insurance despite never being sued or named in a suit during over 20 years of medical practice.

Now, as a hospice physician, my liability costs are still at the level of a general internist, over $35,000 per year. My practice is over 90% Medicare, and I cannot generate enough income through clinical care to cover my costs, especially because I do no “procedures” except the family meeting, which CMS does not reimburse unless the patient is present (even if on a ventilator or so incapacitated he or she cannot participate).

ACP is uniquely capable of stepping up and presenting the full perspective so that we may actually reach some creative solutions in this conundrum of cost and expensive care. Other aspects of cost burdens must be discussed along with reimbursement.

Please don't recycle the stories. Step up and be part of the solutions. The issue is much greater than how much we pay physicians, and cutting reimbursement will not solve the problem. It will just create new ones.

Robert B. Doherty's article “Does the United States pay its doctors and hospitals too much?” (ACP Internist, June 2012) would warrant his resignation if he were a lobbyist for any group other than ACP. It reflects the magical thinking of the ACP Board of Regents, that through the medical home, accountable care organizations (ACOs), e-prescribing, electronic health records and best practices research, medicine can be delivered to more people for less cost. None of these are new concepts and have certainly not been proved effective.

The medical home and ACOs are just another try at gatekeeping and capitation, but we are not any smarter about the use of “new” modalities than we were in the 1980s and 1990s. These concepts will lead to denial of care, as did nonstaff model HMOs.

E-prescribing is not universally loved by patients because many feel more confident with a prescription in hand, and electronic health records are still of questionable help in efficiency.

Best practices research is absolutely not new because it has formed the backbone of all medical journals for over 100 years.

It's a mystery why an ACP leader would pen an editorial that appears to not support the American internist. With friends like this, who needs enemies? I have never seen the American Bar Association indicate that lawyers are paid too much. Could it be that ACP leadership may gain from implementing some of these ideas?

The studies Mr. Doherty cites are of questionable applicability. Liability insurance is so much more expensive in the United States, and pay for procedures tends to be bundled in the United States, but not necessarily in other countries.

The concept of “too much” is a philosophical one, not amenable to statistics. Are legal services too expensive in the United States? If all legal services, including courts, attorneys, manufacturing, etc., are added up, the total cost is greater than that of medical care.

I find it difficult to support an organization that appears to be working against its constituency. I pushed for the formation of a PAC, but how can I support the PAC with this kind of an opinion coming from our leadership?

I would like to respond to Robert B. Doherty's article “Does the United States pay its doctors and hospitals too much?” (ACP Internist, June 2012). As a practicing physician over the last 30 years (general internal medicine and geriatrics<\a>primary care), I've seen the cost of seeing a patient go up far faster than my income or what I am paid by insurers or Medicare. In 1980, overhead in a primary care office was about $10 per patient seen, and now it runs over $55. When one looks at price, one needs to look at the cost as well.

Our insurers now require us to maintain, at a cost of $7 per patient seen, a tickler system to remind people who miss scheduled visits and tests. It has been reported that 35% of the cost of a visit is consumed in billing and documentation for insurers (about $20 for each $70 office visit). Employment of support staff has grown from 4.5 for a two-physician office to 4.5 per practitioner. Health insurance, unemployment, and other benefits go up proportionately, as well as wages. Properly coding an office visit is supposed to take a physician five to seven minutes for a visit that used to take 15, so we become 40% less efficient, and I don't even want to go into the cost and inefficiency of the electronic medical record, which according to the government is supposed to pay for itself by effectively allowing doctors to upcode, therefore charging the patient more for the same service.

Rather than worrying about the price a doctor is charging (adjusted for inflation, my income peaked in 1982 when I worked only 11 months), perhaps a better use of government time would be seeing where the health care dollar ends up, and where it brings and doesn't bring value. Is a tickler system worth $1 per visit when it costs $7, and if so should we force everyone to spend the money or protect them from liability if they don't, as long as the savings are passed along to the consumer?

Doctors all over the country are selling to hospitals or other organizations because the business model for primary care doesn't work any more. Rather than blaming those who are trying to survive under ever greater financial burdens, perhaps officials should look critically on the burdens themselves and decide whether society should require and gladly pay for them, or eliminate all the low-value cost centers in our horribly inefficient system so we don't have to continue to dramatically increase prices to meet costs.

Mr. Doherty responds: I am not surprised that my column created a stir, and I appreciate the comments.

I certainly agree that the crushing burden of medical school debt needs to be addressed. ACP has advocated for expansion of existing programs, like the National Health Services Corps (NHSC), to provide scholarships and loan repayment for medical students who agree to a primary care service obligation in an undeserved area. Last year, the NHSC awarded approximately $900 million to fourth-year medical students, and the corps field strength has tripled over the past four years to nearly 10,000 clinicians.

Yet a higher level of medical student debt does not fully explain the relatively higher compensation of U.S. physicians compared to other countries. According to a study published in the September 2011 Health Affairs, “The difference between annual net incomes, after practice expenses, of primary care physicians in the United States and in the second most costly country, the United Kingdom, is $27,000—somewhat more than the estimated $21,300 per year of practice required to recoup the average tuition investment in education. The difference between the annual net incomes of orthopedic surgeons in the United States and the United Kingdom is $118,000—nearly five times the estimated $24,400 difference in investment repayment costs.”

The same study also found that the differences in practice expenses by country, including medical liability insurance premiums, also do not account for the higher net incomes of U.S. physicians. Instead, the authors wrote, higher fees are the main reason for higher spending in the U.S. for primary care physicians and orthopedic surgeons.

As an advocate for internal medicine physicians and their patients, ACP believes that payers need to support the value of care provided by a well-trained internal medicine specialist. The fact that U.S. physicians are paid more than those in other countries doesn't necessarily mean that they (and particularly primary care physicians) are paid too much—at least when compared to other learned professions in the U.S.

But physicians can't just ignore the evidence that higher prices (which in some cases are reflected in higher net incomes) contribute to the escalation of U.S. health spending. Rather than defensively trying to explain it away, isn't it better for the medical profession itself to offer solutions to the concerns about high prices and high costs of care?

These solutions include helping to develop new value-based payment systems, like patient-centered medical homes, which can appropriately compensate physicians who are accountable for the quality and effectiveness of the care provided through coordinated, team-based practices. These practices are focused on patients' needs and are run by physicians, not managed care insurance companies.

The fact is that some physician services are overpriced (while others are undervalued) by any standard of fairness and fiscal responsibility. It is better for ACP to directly address the problem and offer ideas for better ways to value and pay for care, rather than leave it to the politicians to bring down prices through arbitrary cuts in reimbursement.