By J.C., on August 14th, 2008
In most professions you get paid the more senior you become. An attorney typically bills hourly and as he becomes more an expert in his field and within his firm, his hourly rate continues to increase. Similarly in business, as you climb the corporate ladder, your salary increases. Medical doctors have an unusual situation. Once you become a doctor, you get paid per office visit, per consultation, per procedure, or per surgery the same as whether you have been doing it for 30 years.
The main reason that physician pay does not increase according to seniority is because the payer is usually Medicare or an insurance company that pegs their reimbursement to Medicare rates. When your payer is the government, they don’t care whether you are the best in the field or you have been doing it for 20 years. They don’t care whether you take 1 hour or 10 hours to do the surgery or see the patient. The pay is still the same. Thus in many ways, medicine is sort of an “all you can eat” type of service. You only get paid once, but you must provide complete service.
While the pay increase from resident to attending physician is a typically a huge jump, doctors hit a ceiling early on after they become fully fledged physicians. One reason for this equality in pay among doctors of all levels is that when dealing with human life, it is expected that all doctors provide the best possible care. Differentiating one physician from another or one surgeon from another is very difficult. Additionally, seniority does not necessarily mean that the product or service is better.
Although the pay per service does not increase the more senior you become, in reality the more senior you become the faster you typically perform a service. Thus in some sense pay does increase but this is due to the physician working faster and more efficiently. In practice this is not necessarily always a good thing because some physicians tend to rush or hurry through their patients or procedures. Sometimes this results in poor care or mistakes.
For the physicians who operate non-PAR or take cash payments such as plastic surgeons or dermatologists, they may be able to charge more given their experience or reputation. However, the competitive landscape in any city usually caps levels to cater to what is reasonable for individuals.
By J.D. Seagraves, on August 12th, 2008
The federal government’s debt will soon reach $10 trillion. That’s about $130,000 per family of four in the United States.
But if you think that’s bad, then consider the real national debt. After all, the phony $9+ trillion “debt” does not include any of the following:
- The Social Security deficit
- The Medicare budget shortfall
- The new Medicare Prescription Drug Benefit
- Unforeseen (but virtually guaranteed) future wars
According to Richard W. Fisher, president of the Dallas Federal Reserve Bank, the first three of the above account for $99.2 trillion. Of this, Medicare makes up 69%, Social Security 14%, and “conservative” President Bush’s Medicare Prescription Drug Benefit 17% (more than Social Security!).
But what about #4? The U.S. has been in a nearly perpetual state of war since Pearl Harbor, and we now have a “War on Terror,” the proponents of which admit has no end in sight and could last for 100 years. War is expensive, and yet government accounting doesn’t even consider it. We’re spending at least $6 billion per month in Iraq, and there are more (and bigger) wars on the horizon, if history is a reliable guide.
How do liberal and neoconservative economists – the ones who scoff at the gold standard and celebrate the Fed – respond to this? For the most part, they don’t. If they do, they make ridiculous claims that “enhanced productivity” will allow us to claw our way out of this hole. But for the most part, they ignore the matter and hope the monetary and fiscal facade can remain standing another day longer, hopefully until they’re in their graves from old age. Unless these economists are pushing 80, I fear they may not get their wishes.
The fact is that the U.S. is bankrupt. We’re just lucky that the rest of the world is still living the fantasy, pretending that the emperor (or in this case, the Empire) has clothes. Sooner or later, and I’m betting it’s sooner, the chickens will come home to roost. The U.S. dollar will follow all fiat currencies that came before it in reaching its intrinsic value of $0.
Or another way of looking at it, the Fed can simply print $1.3 million per family as part of a “national debt bailout” and call it even. I’m sure there would be plenty of court economists who would celebrate this as a majestic action by the U.S. economy’s central planners! But one way or another, Dollar Hegemony is coming to an end. The sensible thing to do is get prepared.
By J.C., on July 19th, 2008
I previously wrote about how I feel like we are in the “Era of Ancillary Services” for the physician. The New York Times recently ran an interesting article about cardiologists and the unnecessary CT-angiography scan. At the heart of the issue is that among cardiologists the CT-angiography scan (basically a 3-dimensional X-ray of the heart showing how much vessels are occluded) is controversial in its actual preventive utility.
Medicare, in its effort to cut costs, has balked at reimbursing for these scans. However, many cardiologists continue to order these tests because they make money (up to half of the income of some cardiologists) and patients demand the scans. Last year 150,000 of these scans were done at a cost of more than $100 million. All data trends indicate that their use is increasing significantly.
In the best case, having a CT-angiography that reveals significant occlusion of vessels may indicate the need to increase medications or undergo a procedure to unblock coronary arteries. In the worst case, having a CT-angiography can reveal that there are no blockages in a healthy and asymptomatic patient.
What is interesting about this issue is that the economic and political lobby for CT-angiography is extremely strong and was able to get Medicare to back down from their coverage reversal. Obviously, cardiologists, who may own the machines or have a financial interest in the machines, are going to fight all they can to keep this industry alive. Some people feel that the lobby is driven by capitalism under the guise of “improving patient care.” It is the rare cardiologist that refuses to order scans, own scans, or have financial interests in scanning facilities. Most other cardiologists feel that they might as well own or else they will be leaving money on the table.
At the heart of the issue though is whether these scans affect the actual outcome of the patient. There is very little evidence to suggest that it affects or does not affect patient outcomes. There are many patients in whom asymptomatic disease has been detected. There are also symptomatic patients where the scan confirms what previously was a sound clinical diagnosis based on history and examination.
It does not appear that CT-angiography is going away. The demand is just too high from patients and the lobby is too strong. This is yet again another example where the utilization of healthcare and the discovery of medical advancement are incongruent with the payment and reimbursement mechanism in this country.
By J.C., on July 15th, 2008
With cuts in Medicare slated this year, physicians are once again being put between a rock and a hard place. Reimbursements continue to decrease for all medical services. Given that private insurance companies typically peg their reimbursement rates to those of Medicare, the current downtrend in physician reimbursement is making things difficult for physicians.
Some physicians are going out of their way to stop seeing Medicare patients. The reimbursement is so bad that, financially, the doctor is better off not seeing a Medicare patient because it takes so much time and there is so little financial reward. The concept of a “non-PAR” physician is starting to make its way into acceptance in the medical profession. Unfortunately this means that access to quality care will continue to decrease for patients.
Clearly, the system is broken. We as a country cannot afford the cost of taking care of our aging population. The government’s solution seems to be to continue cutting reimbursements. Most companies would try to grow revenue and manage their expenses. However, for the government, the only way to grow revenue is to raise taxes. In a non-election year, this is a difficult task. In an election year, it is impossible. Thus the government, in the form of its Medicare payer, continues to act in a recessionary mode – cut costs, slash expenses, and prepare for a downturn.
This is no way to run a business. This is no way to run the country. There are many proposals out there to increase revenues and meet the demand of the American consumer patient. One strong proposal asks patients to “buy in” to their own healthcare much like they buy into their retirement plan at work. They can contribute to a “health fund” that covers costs of their healthcare. In this manner physicians will get reimbursed at adequate rates and will have an incentive to treat Medicare patients.
Although this is only one proposal, it is one that increases the revenues of the government’s Medicare business. We cannot continue to keep cutting costs with no end in sight.
By Jennifer Bunn, on July 13th, 2008
It seems that, by 2009, doctors may be able to bill Medicare for electronic consults, a practice that has been discussed in the past but has not been reimbursed by insurers (except in a few remote instances) to date.
Under this new provision, consumers of healthcare will be able to log on to the Internet and consult their doctors from the comfort of their own home, thus saving themselves from lengthy visits to hospitals or busy waiting rooms.
An advantage of this technology, if it should come to pass, is that patients may be able to access a specialist in a more timely and convenient fashion. Also, patients who find it very difficult to travel or mobilize may find this method of care a literal lifesaver.
Physicians may find it easier to monitor their patient’s conditions and prevent complications from occurring if they are able to maintain better contact with them in this manner. And patients in remote areas may have better access to healthcare than they have enjoyed in the past. In fact, remote telehealth has been in use in some areas already.
So what are the potential pitfalls of this practice? The first and biggest area of concern that comes to mind is the measures that will need to be put into place to ensure confidentiality. This will be an important issue, and patients using such a system may have legitimate concerns regarding the security of their personal healthcare information. Secondly, for hospitals that are already having difficulty implementing electronic healthcare records that are very expensive, implementing a system such as this may be too cost-prohibitive. The technology required to capture and store all the data that will be generated by these “visits” will be staggering, not to mention very expensive.
It remains to be seen whether the idea of e-visits will be the wave of the future or simply a great idea that never really took off. Likely what will decide the issue will be the patients who use the system.
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