Do you believe that doctors are overpaid?
When I was in medical school in the early 70s, doctors were generally believed to be “rich,” and parents thought their sons had it made once they got the coveted M.D.
Then came Medicare. Many doctors did even better because many more procedures were done, and the government was paying. But because of the cost explosion, the government quickly began doing something the Medicare law promised would never happen: controlling fees. All physicians’ services now get an AMA Current Procedural Terminology (CPT) code. Each code gets assigned a Relative Value Unit (RVU), and the RVU is multiplied by the Conversion Factor, which is supposed to account for practice costs and local variation.
As the graph shows, the Conversion Factor has actually decreased in non-adjusted dollars. The orange line shows what it would be if it was adjusted for inflation.
The Medicare payment has to cover the total expense of the practice, which has increased with inflation. And additional costly administrative burdens have been imposed. Thus, physicians’ take-home pay is decreasing. Many are unable to keep their independent practice open and have become employed. The emphasis is on “productivity”—submitting enough RVUs to Medicare. Rushed visits, often with a “midlevel provider,” have become the norm.
Another change since the 1970s is the enormous burden of debt that most medical graduates face.
Not surprisingly, doctors are exiting Medicare, or medical practice altogether. Or the most ambitious college graduates are choosing a different career.
The majority of entering medical students are now women. Does this mean wonderful progress for women? Or a decline in the status of the profession? It does mean that services will be scarcer. It is a simple fact that women physicians on average devote less time to practice over the course of their career than men do.
Increasing numbers of physicians are abandoning the third-party and Medicare treadmill and structuring a patient-centered practice: old-fashioned payment at the time of service or direct primary or specialty care on a subscription basis. While “concierge” practices may be very expensive, many monthly subscriptions are quite affordable—especially compared with the premiums for managed care or even Medicare Part B.
It is advisable to combine this with a low-cost, catastrophes-only insurance plan—as so many had before Obamacare outlawed them.
The Clinton Health Care Plan would have outlawed independent practice in which patients paid their physicians directly. Obamacare has mostly destroyed it by forcing people into unaffordable “plans” that drive physicians out with nonremunerative pay. But an escape hatch is there for patients and physicians.
Advocates of “universal care” may complain that it is “unfair” for some physicians to escape from the harried system to a practice that allows personal, attentive care, decreasing the number of physicians serving the patients remaining behind. All should suffer equally, they say.
Is it better for physicians to “burn out” and leave entirely? Or should they be conscripted and forced to work? Or should we encourage the development of a free-market model, in which doctors ask, “How can I help you?” instead of “What’s your insurance?”
Additional information:
- “One Complaint per Customer, Please,” Foundation for Economic Education, 1987
- The Resource-Based Relative Value Scale: A Threat to Private Medicine, AAPS, 2001
- Patients: For Protection and Affordable Care, Opt Out! 2013
- Opting Out of Medicare: A Guide for Physicians, AAPS, 2023
- Find an independent medical practice
