Greedy Physician Bastards

In pushing toward what passed as healthcare reform legislation, supporters from both parties promoted a core commitment: we want doctors to make treatment decisions, not government bureaucrats or greedy insurance companies. As this news story reminds us, doctors also contribute to the healthcare greed factor.

Medicare, the federally-run health plan for retirees, accounts for about 20% of all healthcare expenditures in the US. In effect Medicare functions as a government-run insurance company, negotiating contracts with doctors, hospitals, pharmas, etc. and reimbursing them for services they deliver to covered health plan members. By most accounts Medicare runs a pretty tight ship, incurring lower overhead costs than private insurers while delivering equal or better health outcomes. Medicare also costs less than private insurance. That’s largely because Medicare negotiates tough contracts, reimbursing the various provider sectors at lower rates than do private insurers.

The federal reform bill, in order to cover some of the costs of increased access to care, imposed fees on private health insurers, pharmas, and medical device manufacturers. The legislation also included some cuts in Medicare, specifically to privately-administered Medicare plans, home care, and selected hospital expenses.

Now comes the time for Congress to decide about Medicare reimbursement rates for physicians. A 21% cut had previously been agreed upon, but the effective date for implementing the cut has repeatedly been delayed. The doctors of course would like to see the effective date pushed back indefinitely or, better yet, eliminated altogether. Democratic Party leadership, including Obama and Pelosi, have assured the AMA that they will stop the pay cut. But the doctors and their lobbyists aren’t satisfied with that: they want other Medicare cuts mandated in the reform bill to be spent on an increase in Medicare physician reimbursement rates.

Just listen to this sob story cited in the linked article:

“In the past two years, (lawmakers) keep coming up to the deadline — or a little past it — and waiving the cuts for shorter and shorter periods of time, which makes us uneasy,” said Dr. Susan Crittenden, a primary care physician practicing near Raleigh, N.C. “The current uncertainty about what the fee schedule will be, and whether at some point there will be a 20 percent cut, makes it harder to accept new Medicare patients,” Crittenden said. Although government surveys indicate that Medicare beneficiaries’ access compares favorably to that of privately insured patients, doctors and patients say that’s not always the case. Crittenden’s practice takes very few new Medicare patients, since the program pays her medical group well below private insurers’ rates. “I like to take care of older adults, but I have rent to pay, and a staff to pay,” she explained.

Of course this sort of alarmist rhetoric is aimed at retirees and their lobbyists: get us more money or we’ll quit taking care of you. It’s a thinly-veiled extortion threat. In this human-interest vignette the Feds come off as the villains, while the private insurers are implicitly portrayed as the good guys. Because private insurers pay them a living wage the doctors are less anxious, able to pay the rent and the staff, able to satisfy their longing to take care of old people. Hey, whatever it takes.

I noticed that Dr. Crittenden makes no mention of her thwarted desire to treat poor people, whose Medicaid reimbursement rates are indexed at a discount even below the Medicare rates. Like many other doctors, she probably already stopped accepting Medicaid patients some time ago. Besides, there’s no political leverage to be gained by calling attention to poor people’s lack of access to care. Most voters believe that they’ll never become chronically unemployed, but they do look forward to a comfortable retirement in which their healthcare needs are taken care of.

Physician fees account for less than one-fourth of all US healthcare costs. However, doctors also control access to all the other expensive healthcare goods and services: they prescribe drugs and lab tests and medical devices, they admit patients to hospitals and long-term care facilities, and so on. Consequently, all these other industry lobbyists support the doctor-centered model of care, which of course means embracing the proposed increases in physician reimbursement.

According to this governmental report, primary care physicians in the US earn about $186,000 per year on average; for specialists it’s $340,000. Not surprisingly there’s a shortage of primary care docs nationwide, while the vast majority of med school students plan to train as specialists. Physicians in the US are paid more than 5 times the average wage; French physicians, in contrast, make a bit more than twice the national average. Is American doctoring worth it? According to most empirical studies with which I’m familiar, health outcomes and adherence to evidence-based practices are no better in America than in France. And, as has been widely observed, population health is worse in the US than in France.

Most physicians in the US work for themselves, either as individuals or as members of physician-owned group practices. They make money by working, and there are no outside investors who skim a share of doctors’ revenues as profit. In a sense doctors are the champions of an anarcho-syndicalist economy in which workers own the means and the output of production. Somehow I’m not sure I want a healthcare system controlled by these particular working-class heroes, any more than I want it controlled by the for-profit insurance companies or by the corporate employers who hire insurers to manage their employees’ health benefit plans.

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