Less Doctor Pay, More Health Costs

Less is more.

Cliche

Of all the ways to limit health care costs, perhaps none is as popular as cutting payments to doctors. In recent years payment cuts have resulted in a sharp downturn in revenue for many hospitals and private practices. What this has meant for most physicians is that in order to maintain their income, they’ve had to see more patients. When you reduce the volume of air per breath, the only way to maintain ventilation is to breathe faster.

Sandeep Jauhar, MD, “Busy Doctors, Wasteful Spending,” New York Times, July 20, 2014

If something sounds too good to be true, it often is. Such is the case with cutting doctors’ pay. American doctors are among the highest paid in the world. Why not just cut their pay, put them on salary, bundle their services, just pay them for what works? Wasteful spending costs the U.S. $750 billion a year. What doctors order accounts for or affects 80% of health costs.

But alas, less may not be more. As Doctor Jauhar, an internist, points out, when you receive less pay, you have to see more patients to make up for the loss. And when you see more patients faster, you make mistakes and you miss things.

To keep those mistakes and misses from hurting you and the patient, you worry more about malpractice.

When you worry more about malpractices, you make more referrals to specialists, who order more tests. And who will certain do something. That is what they are trained to do - do something.

You may order more tests yourself, just to make sure you haven’t missed something.

You may order an MRI or CT scan , which have been embedded in the public’s mind as a standard of care and the magic answer for finding out or ruling out the causes of back pain or joint pain or headaches or belly or chest pain, or whatever else ails you.


You may write a prescription. The patient came to you for help. They want something done for them. And writing a prescription is something. It is better than simple talk and counseling, which takes more time. And more time is something you do not have.

To create more time for yourself and your family and to assure yourself of a more secure financial future, you may go to work for the local hospital. Unfortunately, because of a law allowing “facility fees, “ more and larger fees are charged if the patient is seen in a hospital-owned facility Fees charged are often 50% to 60% higher than fees charged in a physicians office.

And so the physician payment and health cost cycle goes. Where it stops no one knows.

Perhaps we could slow it down by reducing the pay differential between hospital-owned and independent doctors, by cutting regulatory paperwork, which takes 25% of doctors’ time, by punishing doctors for ordering those procedures patients and lawyers expect, by spending more time counseling patients to walk more, eat smarter, drink less, and take better care of themselves, but that would take more time, of which you have less and less.