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How Outdated Data Distorts Doctors' Pay
Hugh Pickens DOT Com writes "Peter Whoriskey and Dan Keating report at the Washington Post that Medicare annually pays $69.6 billion for physician services according to an arcane and little-known price list, known as the Relative Value Update over which doctors themselves exercise considerable and less-than-totally-transparent influence. A 31-member committee of the American Medical Association (AMA) recommends what Medicare should pay for some 10,000 procedures — with the fees based in part on how long it takes to complete each one. But this time-and-motion study often fails to take full account of changing technology and other factors affecting physician productivity, so anomalies result. For example, if the AMA time estimates are correct, then 41 percent of gastroenterologists were typically performing 12 hours or more of procedures in a day, which is longer than the typical outpatient surgery center is open and and one gastroenterologist in the Post story would have to work 26 hours, according to the committee time estimates, to accomplish what he gets done in a typical workday. Here's how it works: Medicare pays for a 15-minute colonoscopy as if it took 75 minutes resulting in a median salary for a gastroenterologist of $481,000. It is possible that in 1992, critics allow, when the price list was first developed, a colonoscopy actually took something close to 75 minute when doctors had to hunch over an eyepiece similar to that of a microscope for a look. But technology has advanced and now the images are processed and displayed on a large screen in high-definition video. Responding to criticism that the nation's method of valuing medical procedures misprices payments, a bipartisan group of legislators has drafted a bill that would reshape the way the nation pays doctors. The bill would require Medicare officials to collect data such as how much time doctors spend doing procedures and reducing the doctor payment for overvalued services. 'What started as an advisory group has taken on a life of its own,' says Tom Scully, who was Medicare chief during the George W. Bush Administration. 'The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild.'"
You know I am sick and tired of everyone blaming doctors for the cost of healthcare in the US. When in fact, doctors salaries are a miniscule portion of US healthcare, especially compared to drugs and device costs and hospital CEO pay! Doctors should be paid MORE. Yes I said it, more! What other profession do you study at least 12 years before you make a decent salary, take on at least $250k in school loans, and work 12 hour days for your entire career?
Yes doctors make good money but it's far less than other folks in the US make who are far less deserving. How about addressing the seriously disgusting salaries on wall street? Should a computer nerd working in Morgan's computer risk group really be making $500k which is FAR more than the majority of doctors? What about the asshole investment bankers making millions at Goldman figuring out new ways to screw every US citizen out of a couple of pennies. Meanwhile the doctor is someone who makes you feel better and often will save your life.
p.s. I am not a doctor. I just work with a lot of them and see how hard a life they have nowadays.
a dentist, and even I can tell you there's more to the story here. That 75 minute colonoscopy is probably an average. No one can predict exactly how long any given procedure will take on any specific patient. If a patient has no polyps, the procedure goes faster. If they find polyps and remove them (that's how colonoscopies prevent cancer) it takes longer. Patient anatomical variations and other medical complications can affect the time required.
I run into the same thing with my patients. A simple 15 minute restoration on a cooperative adult patient can turn into an hour long ordeal on an uncooperative 5 year old, but insurance pays the same for either one.
It's pretty clear that, in aggregate, doctors aren't fleecing the system
I disagree. First, doctors are horrible at finance. Few trouble to manage their own money effectively. It's common for a doctor to be pulling down 6 figure pay, and yet be broke because he blows all his money on expensive cars, big houses, and trophy wives. They are even worse with their patients' money, going through that like the proverbial drunken sailor. They'll happily order unnecessary $2000 scans, "just in case", and to cover their asses and to get some use out of the really expensive equipment the practice should not have bought in the first place. They prescribe expensive brand name medication when a generic is available, and oft times is superior. An example is prescribing Crestor, instead of simvastatin or lovastatin. Even a generic may be the wrong approach, if patients have not tried other measures first, such as improving their diets and exercising. I realize there is a great deal of pressure on doctors from both Big Pharma and patients. We're really sold on the idea of magic pills that fix all our medical problems. Doesn't help that Big Pharma works the public over with all these ads. "Ask your doctor about ..." But rather than go with the flow, especially since it's more profitable, doctors have a duty to push back.
My own personal experience with this was thanks to an automobile accident. Had my parents with me, and they were both injured. My mother finished her hospitalization in a private place, where she had been sent for rehab. On the day they released her, they shoved a wheelchair at us, and shoved a form under her nose for her to sign. The form said that she promised to pay for the wheelchair herself should her insurance refuse. She didn't need the wheelchair, but at that time we were still just a little too credulous and inexperienced with medical profiteering. I protested that we could get a wheelchair from a friend who no longer needed his, but was ignored. I asked how much their wheelchair cost, and was told not to worry about it because insurance would cover it! I pointed out that the form they were insisting she sign suggested that there was a possibility insurance would not cover it, and so I ought to know what it cost. They replied that they didn't know but it was sure to be reasonable. Uh huh. Turned out that damned wheelchair cost $825, 4 to 6 times what it should have cost. That was hardly the only instance of profiteering.
You should read Bitter Pill (paywalled), and How Dentists Rip Us Off (pdf) if you are truly ignorant of the reckless and cavalier attitude the medical community has towards costs.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"