Thursday, July 20, 2017

Unequal treatment: disparities in how physicians are paid

As a family physician and medical school faculty member, I'm naturally a big booster of primary care. America needs more generalist physicians, not fewer, and much of my professional activity involves encouraging medical students to choose family medicine, or, failing that, general pediatrics or general internal medicine. But it's an uphill battle, and I fear that it's one that can't be won without major structural changes in the way that generalist physicians are paid and rewarded for their work.

In a recent Medicine and Society piece in the New England Journal of Medicine, Dr. Louise Aronson (a geriatrician) described visits with two of her doctors, a general internist and an orthopedist. The primary care physician worked in a no-frills clinic, often ran behind schedule, and devoted much of the visit and additional post-visit time to electronic documentation. The orthopedist worked in a newer, nicer office with an army of medical and physician assistants; generally ran on time; and was accompanied by a scribe who had competed most of the computer work by the end of the visit. Although there are undoubtedly a few family doctors with income parity to lower-earning orthopedists, according to Medscape's 2017 Physician Compensation Report, the average orthopedist makes $489,000 per year, while an average general internist or family physician makes around $215,000 per year. Here's what Dr. Aronson had to say about that:

It would be hard, even morally suspect, to argue that the salary disparities among medical specialties in U.S. medicine are the most pressing inequities of our health care system. Yet in many ways, they are representative of the biases underpinning health care’s often inefficient, always expensive, and sometimes nonsensical care — biases that harm patients and undermine medicine’s ability to achieve its primary mission. ...

Those structural inequalities might lead a Martian who landed in the United States today and saw our health care system to conclude that we prefer treatment to prevention, that our bones and skin matter more to us than our children or sanity, that patient benefit is not a prerequisite for approved use of treatments or procedures, that drugs always work better than exercise, that doctors treat computers not people, that death is avoidable with the right care, that hospitals are the best place to be sick, and that we value avoiding wrinkles or warts more than we do hearing, chewing, or walking.


Medical students are highly intelligent, motivated young men and women who have gotten to where they are by making rational decisions. For the past few decades, as the burden of health care documentation has grown heavier and the income gap between primary care physicians and subspecialists has widened, they have been making a rational choice to flee generalist careers in ever-larger numbers.

The cause of these salary disparities - and the reason that more and more primary care physicians are choosing to cast off the health insurance model entirely - is a task-based payment system that inherently values cutting and suturing more than thinking. I receive twice as much money from an insurer when I spend a few minutes to freeze a wart than when I spend half an hour counseling a patient with several chronic medical conditions. That's thanks to the Resource-Based Relative Value Scale, a system mandated by Congress and implemented by Medicare in 1992 in an attempt to slow the growth of spending on physician services. Every conceivable service that a physician can provide is assigned a number of relative value units (RVUs), which directly determines how much Medicare (and indirectly, private insurance companies) will pay for that service.

As new types of services are developed and older ones modified, the RVUs need to be updated periodically. Since the Centers for Medicare and Medicaid Services (CMS) chose not to develop the in-house expertise to do this itself, it farms out the updating task to the Relative Value Scale Update Committee (RUC), a 31-member advisory body convened by the American Medical Association (AMA) and nominated by various medical specialty societies. Here is where the fix is in. Only 5 of the 31 members represent primary care specialties, and over time, that lack of clout has resulted in an undervaluing of Evaluation and Management (E/M) and preventive services (the bulk of services provided by generalist physicians) compared to procedural services. Although an official AMA fact sheet pointed out that some RUC actions have increased payments for primary care, a 2013 Washington Monthly article countered that these small changes did little to alter the "special deal" that specialists receive:

In 2007, the RUC did finally vote to increase the RVUs for office visits, redistributing roughly $4 billion from different procedures to do so. But that was only a modest counter to the broader directionality of the RUC, which spends the vast majority of its time reviewing, updating—and often increasing—the RVUs for specific, technical procedures that make specialists the most money. Because of the direct relationship between what Medicare pays and what private insurers pay, that has the result of driving up health care spending in America—a dynamic that will continue as long as specialists dominate the committee.


We teach our medical students to recognize that inequities in where patients live, work and play are far more powerful in determining health outcomes than the health care we provide. A child living in a middle-class suburb has built-in structural advantages over a child living in a poor urban neighborhood or rural community, due to disparities in economic and social resources. The same goes for how physicians are paid in the U.S. Until the RUC is dramatically reformed or replaced with an impartial panel, the $3 trillion that we spend on health care annually (20 percent of which pays for physician services) will continue to produce shorter lives and poorer health compared to other similarly developed nations.

1 comment:

  1. It gets worse for 36% of family physicians in lowest physician concentration counties and the 40% of Americans in these counties. These are the practices avoided by all other specialties that concentrate where physicians are most concentrated.

    The future of family medicine, others in family practice positions, and the most of the vulnerable populations in the US are linked together. This includes health care in Red Counties and in the rural counties with majority minority populations as these are the 2700 lowest physician concentration counties. About 45% of the US population will be found in these counties in 2040 along with over over half of the elderly, disabled, veteran, diabetic, obese, mentally ill, and most vulnerable populations. Cuts in Social Security, disability, and Food Stamps will slash more tens of billions.

    Health care has its own mechanisms stripping lowest concentration counties of billions – billions lost that will reshape health and other outcomes worse where they are already worst.

    It is the financial design that shapes access barriers and lesser outcomes where Americans most need care. A few billion in changes once every 15 - 20 years has not even covered rising cost of delivery where only 30 billion a year supports half enough primary care. Stagnant payment with accelerating cost of delivery and increasing complexity is killing primary care - and Americans.

    Generalist and general specialty services are lowest paid and are 90% of local services in 2621 counties lowest in MD DO NP PA and RN workforce. These places have least health spending because of lowest payments for basic services and these basics are paid 15% lower (Medicare 2011 data). Even worse the costs of delivery have hit these small and marginally financed practice worse due to regulation, innovation, and certification costs. HITECH shipped 1.5 billion out of primary care in these counties and MACRA had a 2 billion price tag. Turnover costs exceed 4 billion a year – likely twice as much as turnover should cost because of insufficient payments. These are all dollars shipped from lowest concentrations to higher – another source of disparities in dollars, access, and health outcomes. It should not be a surprise that the 5 billion cost added for Primary Care Medical Home has been largely avoided.


    Across America financial burdens are being shifted to local communities as state and federal and corporate designers. Lowest concentration counties already have a smaller economic engine and losses of state and federal dollars will make situations worse. To even have basic health services, many communities have been forced to divert more dollars to prop up local primary care – resulting in other local consequences.

    Designers immersed in highest concentrations and shaping designs their way have clearly lost touch with most Americans and those most vulnerable.

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