…in the United States, regions that spend the most on health care appear to have higher mortality rates than regions that spend the least, perhaps because of increased hospitalization rates that result in more life-threatening errors and infections. It has been estimated that if the entire country spent the same as the lowest spending regions, the Medicare program alone could save about $40 billion a year.
Overutilization is driven by many factors ”” “defensive” medicine by doctors trying to avoid lawsuits; patients’ demands; a pervading belief among doctors and patients that newer, more expensive technology is better.
The most important factor, however, may be the perverse financial incentives of our current system.
Doctors are usually reimbursed for whatever they bill. As reimbursement rates have declined in recent years, most doctors have adapted by increasing the quantity of services. If you cut the amount of air you take in per breath, the only way to maintain ventilation is to breathe faster.
Overconsultation and overtesting have now become facts of the medical profession. The culture in practice is to grab patients and generate volume. “Medicine has become like everything else,” a doctor told me recently. “Everything moves because of money.”
This problem sits at the intersection of two weaknesses in the American system. To be charitable we can assume excess testing is often ordered in full CYA-mode in response to our overly litigious society. More importantly these financial-medical abuses occur because [b]someone else is paying the bill[/b].
The horrible inefficiencies of government medical systems –[i]e.g.[/i] Canada, where I lived for many years– cuts way down on over-testing for the simple reason that scarcity and delays make it impossible even though someone else is paying the bill.
Only about 10% of all American medical care is paid for by the patient. This has nearly eliminated the former “patient as customer” discipline and courtesy characteristic of American medicine as recently as 1965. When you’re paying the bill the doctor is there to serve [i]you[/i] and you both know it. It also had the side-benefit of greatly reducing mal-practice suits.
Any real solution to America’s medical dilemma will involve [i]less[/i] third-party coverage, not more. It doesn’t go through government — ask people about the VA, Indian Affairs medicine, or for that matter Walter Reed hospital — but must be built on a restoration of the “patient as customer” relationship. For that to happen people will need to be weaned off their $100-deductible, employer-paid policies.
I’m a CPA and have had many physicians as clients over the years. It is impossible to imagine these guys’ monthly cash burn. Two or three homes, usually an ex-wife receiving alimony and child support, eighty thousand dollar automobiles, private school tuition, I could go on and on.
It’s incredible. If you are advised to have any kind of invasive procedure at all, up to and including surgery, find an older physician or two to give you a second opinion.
Gee — my brother-in-law is a general surgeon and he barely breaks $100k in annual income. Must be doing something wrong.
#1 Bart — do you believe in any kind of insurance or should everybody be prepared to pay for every possible medical expense, including catastrophic ones? Do you have the million bucks it might take to treat you successfully if you got cancer? Our NJ Governer was in a major car accident last year that cost him at least $300,000, which he paid out of his own pocket given that he has about 300 million. Should we all save up $300k for such a possibility, or is it OK to pay an insurance company to spread the risk around a larger pool the same way we do with our home and car insurance? And if its OK to do that for major expenses, do you have some line that you draw where it’s NOT OK to try to spread risk but everybody must be prepared to pay for themselves? When you get rear-ended and you take your car to a body shop does it bother you that the shop knows that your insurance is paying for the repair? Do you insist on paying for it yourself to get more respect and better service from the shop? (And of course, to keep their prices down?)
One of my clients is an Endodontist. He does root canals all day long. His W-2 for 2007 was in the $1.3MM range from his professional corporation. I have nurse anesthesists who make close to $200K a year so I’d say there is definitely something amiss with a general surgeon who is only making $100K. My wife’s best friend is a lab technician at a local hospital and she’s making in the 90s.
Endodontists (the good ones) make a humongo amount of money. They can charge $1,000 for an hour’s worth of work. Interestingly enough — a hefty portion of this is paid directly by the patient and it doesn’t seem to drive the price down. (For example, I have had several root canals, all of which I paid for entirely out of pocket. I also had a $5,000 implant paid out of pocket. Even good dental insurance typically only pays 50-75%)
By contrast, my brother-in-law is a general surgeon. NOBODY pays him out of pocket. He has to take whatever insurance gives him. And that includes consulting with the patient to begin with, doing the procedure, and then all follow-up visits required. If the patient is in the hospital and gets really sick, Phil may have to run over there and check/manage the patient 5 times or more, plus post-hospitalization visits. If you think there is “something wrong” with him you’re quite wrong. He works in a partnership with several other doctors. They work in Denver. If he worked in a major city on either coast he could make twice that.
Some doctors are making outrageous amounts of money; others aren’t. Are there seems to be little connection with who pays for it. If you doubt this, just check the amounts of money made by cosmetic surgeons and virtually ALL their clients pay out-of-pocket. It is a myth that the insurance system drives up doctor’s fees (although it certainly drives up the amount of money spent on health care, with a big fat amount going to the insurance companies.) In fact, insurance companies use their power to drive DOWN doctor’s fees.
#3 — I absolutely believe in medical insurance.
What, however, would auto insurance cost if we expected it to cover oil changes, brake jobs, and a new battery?
Our insurance — $10K deductible by choice — costs us $116 per month, for the two of us. If there were kids at home it would be $128. That’s with a cancer history. When we purchase medical services we get an immediate 30% discount for payment at the time of service. I wish the law would allow us to use Health Savings Accounts at that level of deductible.
Dunno, RN’s (floor nurses) with three to five years’ experience are scaring the Hades out of $100K in Memphis. My mother had colon surgery a few weeks ago and I ran into her general surgeon in the parking lot getting into a Mercedes SL-550.
Not saying anything is wrong with your BIL as a physician, but I can assure you he is being outearned by people who have no more professional training than an R.N. designation – at least in Memphis.
I did a tax return last tax season for a Jordanian anesthesiologist (M.D. but trained overseas) doing locum tenem work at small county hospitals in TN, KY, and GA and he made over $300K and worked only ten months – had only been in the U.S. for ten months.
I have more examples if you need them.
The examples are pointless. If you go to http://www.payscale.com/research/US/Industry=General_Surgery/Salary you’ll see that the average salary for a general surgeon in the U.S. is $188k.
Here is a quote from a surgeon on a related site about what the potential earnings are:
“Surgery is all about procedures. Cut-stitch-earn and more cut-stitch-earn — and money comes a knocking. 🙂 Of course, the million dollar income days have receded into the past thanks to Managed Care, care-based payment, capitated payments, etc., but the money is still not that bad. Most surgeons I know are workaholics…”
I guess my BIL’s problem is that he is NOT a workaholic and would like to occasionally spend time with my sister and their three kids. Also — please note that a SURGEON believes that the “million dollar” days have been suppressed by managed care. Again — it is a myth that insurance drives UP doctor’s salaries. It’s the opposite.
BTW, I should mention that probably the main reason my BIL makes under the national average (not that the national average is all that huge for a profession that requires 4 years of college, 4 years of med school, and 7 years of residency making no money, working 24 shifts, and living in a dump) is that he works out of a Catholic hospital. General surgeons get most of their business from hospitals (few people walk into a surgeon’s office and say “Hey doc, I think maybe my appendix has burst”) and they require him to take ALL patients who come in — regardless of whether or not they have insurance. Something like 40% of his patients have no insurance and you can guess how much they pay him. [Most people without insurance are not libertarians who don’t believe in it. They’re just poor. 🙂 ] He says that every year it gets worse and every year his income goes down. Either we ALL pay out-of-pocket so he can charge what the market will bear (meaning rich folks will pay five times as much as they’re paying now — the good old days for doctors) or we ALL get insurance, so that he’ll get paid for every procedure. What he (and this country) have now is the worst of all possible worlds.
The New York Times had a very interesting article which looked at the lives of two brothers (in Cleveland, I believe). One was an internist making $90k and the other was a dentist pulling in over $400k. The dentist worked four 12 hour days. The internist worked 60+ hours/week. Lots of vacation versus none. Dumpy office versus modern office with espresso bar, etc.
As Catholic Mom points out, to be a physician, one needs to be into delayed gratification in a big way. I remember in medical school someone said that over a life time a plumber makes more than a family physician.
Charley is correct about physicians salaries, some are astronomical – Radiology, Orthopedic surgery and Anesthesiology, in particular. I think a lot of my colleagues live without for so long, get out and start spending money like crazy. I have resisted this so far (been out for 4 years). I drive a little Japanese import which is five years old. We are trying to pay off medical school loans (still!) and live modestly. My accountant says that we are much more frugal, and he does most of the other physicians books in town. But again, if one looks at lifetime earnings, if you are interested in making money, don’t become a physician, go to dental school.
Getting back to the article. Defensive medicine is costing the country a bundle. What irritates me about this article is that it attributes all these extra procedures on physicians trying to make a buck, nothing about protection from frivolous lawsuits. I do agree that physicians are trying to maintain their income levels (Medicaire and medicaid seem to cut physician payments but never hospital payments.) But the lion’s share of tests are not done in the physicians offices – CAT or MRI scans, lab work, etc. The threat of lawsuits is pervasive and oppressive. Why should I put put myself at risk when none of the others are and the lawyers would say, “Doc all the other doctors in town get MRIs for patients with headaches. Why didn’t you and you wouldn’t have missed the brain tumor?”
Most cardiologists can’t do cardiac perfusion studies in their office (like in the article). Most can do stress tests in the office. This is necessary in that they are expected in this medicolegal climate to have a stress test on everyone going to the OR if they have a hint of cardiac issues.
It is true that there is a problem with a system that rewards inappropriate tests. However, most tests are not benefiting the physician’s pocket book. Go to the ER with heartburn. You will be dumbfounded at the tests they order. The ER doc doesn’t benefit from any of these.
Royroy, I don’t disagree with your overall point. But if a person unfamiliar to the ER doctor walks into an emergency room with acute painful symptoms which are very similar to a heart attack (they don’t call it “heart burn” for nothing — that’s what it feels like) he would be very wrong to send them home with a Pepsid.
We all know that we are going to get worked over if we go to the emergency room, which is why we try to stay away. I just PRAY that if one of my kids has sudden acute pain his belly that it happens at 2 pm and not 2 am because it’s going to be the difference between a 20 minute doctor’s visit and a 4 hour emergency room visit. All the more reason we should make sure that people have health insurance so that going to the ER will be the LAST, not the FIRST thing they do.