Editore"s Note
Tilting at Windmills

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September 3, 2007
By: Shannon Brownlee

[Note: Shannon Brownlee is the author of the upcoming book Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer. She'll be guest-blogging this week on various healthcare-related topics.]

UNKIND CUTS?....Last month Blue Cross put physician reimbursement cuts into effect in California and doctors were predictably outraged. "I don't know how anybody can afford to stay in practice and accept Blue Cross rates," Dr. Charles Fishman, a San Luis Obispo dermatologist told the Los Angeles Times. "Boo hoo" was undoubtedly the response from many readers. It's hard for the average American to feel much sympathy for a profession where the median income is $215,000 a year. Soon, Medicare will be making its own cuts, and we'll hear a new round of complaints from doctors.

The point of all this cutting, of course, is to rein in spiraling health care costs. But reducing reimbursements to doctors never works in the long run, and you'd think payers would have learned that lesson by now. Why doesn't it work? Because medicine, as Dr. Arnold Relman, the former editor of the New England Journal of Medicine, once observed, is the ultimate piece work industry. When you pay them less per "piece," physicians can and do increase the volume of services they provide in order to make up for lost income.

That means that we don't end up saving any money by tightening reimbursements. But we do end up pissing off doctors, who don't really want to have to run around doing more procedures and seeing more patients just to maintain the same income. It also means we patients can expect to be given a lot more unnecessary procedures, because when doctors do more, they don't necessarily do more of what we really need. In the 1990s, managed care trimmed physician reimbursements and an avalanche of unnecessary procedures and blood tests and CT scans was the result.

All of which is just one more reason why fee-for-service has got to go. It's a broken payment system, and it simply encourages bad quality care. Doctors need to be put on salaries.

Alan Sager, at Boston University, suggests that we take the portion of our national health care bill that already goes toward physician reimbursement — about $500 billion — and say to doctors, in effect, you can keep the money, but you have to take it in the form of a salary. Surgeons would no longer be paid separately for each surgery, and primary care physicians would no longer get a separate fee for each office visit.

We might want to redistribute the money a bit, so primary care doctors make a little more and the super-specialists make a little less. The main idea here is to recognize the fact that we can't save money by squeezing doctors, and what we ought to be doing is removing the financial incentives for giving patients care they don't need.

Shannon Brownlee 2:17 PM Permalink | Trackbacks | Comments (70)

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You are right, even though we docs are a typical target. I want universal health care and provide much free care as part of my salaried university job because I feel it is part of my responsibility. Whenever this topic comes up, I just ask those suggesting it why they think doctors should lower their standard of living going forward to pay for it? I suggest that the virtual mortgage we take out to become doctors means that we don't all live the life of Riley. I then ask them to have everyone lower their own standard of living by just 3% to cover all uninsured patients. And then I get mean stares. I think it unreasonable to ask doctors to reduce their salaries when everyone else's in health care (see nursing) is going up. Yes, we make more, but that is because I get called in the middle of the night, make life and death decisions, and spent more than a decade preparing for my job. I agree that there are better targets...but, frankly, Medicare reimburse has controlled remuneration pretty well compared with inflation.



Posted by: JB MD on September 3, 2007 at 2:33 PM | PERMALINK

How would salaries be determined then? Who would pay the salaries? If doctors received straight salaries, would we tend to see doctors avoiding caring for sick patients; that is, would they take on younger,less ill patients, and avoid older, more ill patients?

I actually think this idea has merit, but in a very abstract way. The devil would be in the details.

Posted by: dvg4048 on September 3, 2007 at 2:33 PM | PERMALINK

When people object to nationalizing our health care system, a favorite response is that the system would still be private, just like it is now, only the payments would come from the government.

Now we're already talking wage and price controls and redistribution of provider income.

Can we stop kidding ourselves now?

I always wonder when someone says "we" should "redistribute" things, who exactly "we" are.

Posted by: harry on September 3, 2007 at 2:35 PM | PERMALINK

If X pays Y a salary, then Y is X's employee. Y is the doctor in Shannon Brownlee's post. But who is X? What person or what entity is paying those doctors' salaries? Do they all become employees of institutions of some kind - universities or medical centers or big practice organizations? Do they become government employees? Those are all plausible options but of course would be a giant change in American medicine. Not saying who pays the salaries is a pretty big gap in your first post, Ms. Brownlee.

Posted by: Richard Riley on September 3, 2007 at 3:08 PM | PERMALINK

Bill Gates should pay their salaries.


Posted by: craigie on September 3, 2007 at 3:16 PM | PERMALINK

I think we need free medical school.

Posted by: Tilli (Mojave Desert) on September 3, 2007 at 3:17 PM | PERMALINK

Wow. What do they teach for economics at the Ivy League schools these days if the elite white pundits are coming up with idiotic ideas like this. The only way to put all physicians on a salary is for the government to be the only employers. Of course, there will still be "cash and carry" medicine like most of dermatology. How does the government keep physicians from making money of elective cosmetic surgery if it does not fund the procedures to begin with? The same goes for IVF, gastric bypass, Lysic eye surgery, etc.

Posted by: superdestroyer on September 3, 2007 at 3:20 PM | PERMALINK

I believe that in oh Canada there is a cap on the number of patients docs can see, and a set (negotiated) price for everything they do.
I wonder about the other piece in the chain, ye olde insurance companies.
The main point, of course is super solid: don't discourage innovation and needed care, and don't encourage unneeded procedures.

Posted by: cassandro on September 3, 2007 at 3:28 PM | PERMALINK

I'll second Tilli (Mojave Desert). I'm tired of the Doctors who justify their huge salaries because their medical education cost so much, and they spent so many years preparing, and they work such ungodly long hours especially during their internship years. Other also people spend years preparing, drop a fortune on their education and work super long hours without seeing the wealth rain down on them when they graduate. The cost of education is a problem of education financing, and the long hours and years of training are part of the dysfunctional culture of the medical training and profession. If it would control physician salaries, by all means, I'm all for the state providing free medical education.

I appreciated Josh's honesty, but if he had been paying attention, he would have realized that during the Bush years the majority of Americans have experienced a decline in their standard of living even as health costs have increased. Josh, dear, you sound just a little out of touch.

By the way, Shannon, welcome to the comments section of Washington Monthly! I'm really looking forward to what you have to say!

Posted by: PTate in FR on September 3, 2007 at 3:37 PM | PERMALINK

Cost control

If the market doesn't work because there's no competition, collusion, etc., then what should control or determine health care pricing or payments (salary) to doctors, nurses, administrators, pharmacological companies, etc.?


Let's say it's run like a lot of government programs ... by the state with federal funding and oversight. What is the precise structure going to have to be? Same as now? Somehow different?

Posted by: MarkH on September 3, 2007 at 3:50 PM | PERMALINK

Another way to drive down doctor's salaries would be by increasing the supply of physicians, by increasing the number of slots available in medical schools. Supply and demand!

Posted by: CFG in IL on September 3, 2007 at 3:51 PM | PERMALINK

I work for the government, make a salary rather than a per-piece paycheck, and think the idea has big problems when transplanted to the healthcare world. How would it work? Doctors presently get money from government healthcare, corporate healthcare, and private payers (and combinations of all three.) How would they merge?

Would a doctor that sees 90% private persons paying cash and 10% Medicare/Medicaid get 10% of the government maximum salary? What about a guy who sees 10% private, 30% private/corporate, 30% government healthcare and 30% government/private patients but only fully treats the private patrons? I see the doctors not having to let any of their office staff go. Right now, handling the billing is more than a full-time job or two for most doctors' offices. How this can be fixed will have to be part of the solution rather than an addition to the problem if this proposal is to have any chance of flying.

Posted by: jon on September 3, 2007 at 3:53 PM | PERMALINK

Yeah, my local University hospital just had a huge dispute with Blue Cross. BC wanted to cut doctor's reimbursement. The hospital (the largest in our state, one of the largest in the US) had enough power to fight back, eventually an undisclosed agreement was put in place. But for a few weeks, it looked like the hospital would just refuse to take any Blue Cross patients unless they paid full price out of their own pockets.

But BC will get even somehow, even if that means they have to gouge consumers directly. I just had my gall bladder removed at that hospital. My first memory after waking up from anaesthesia is being wheeled out past the pharmacy to pick up some pain meds on the way home. The pharmacist told me BC had denied my coverage for post-surgical painkillers. Since then, BC has denied coverage for all my (previously covered) prescriptions. I called BC and they said "oh, we just put a new computer program in place to evaluate drug coverage." Oh great. Now I'm worried they're going to decline my $15k surgery, which I preauthorized and was told I whould only pay $1400 (I hit my annual out of pocket cap).
Oh what a mess.

Posted by: charlie don't surf on September 3, 2007 at 3:54 PM | PERMALINK

Along with more doctors, why not open the system up to nurse practicioners? They are perfectly able to handle much of the stuff doctors do now, have more training than many doctors did even thirty years ago, and can be trained faster and cheaper than doctors.

I know they aren't doctors and can't do many very important things, but they should be a bigger part of any system.

Posted by: jon on September 3, 2007 at 3:56 PM | PERMALINK

All somewhat moot in that the number of primary care physicians is and has been for many years dropping at a steady rate. We will soon have no one to whom we can "go to the doctor" when we need a diagnosis, treatment plan, etc.


Posted by: Cranky Observer on September 3, 2007 at 4:07 PM | PERMALINK

Ah, Kevin.

Sounds like more "command and control" socialism to me. What you're proposing here in effect is to cap the amount of procedures equal to the "salary" you are paying the doctor. Who pays the salary? Who determines the salary? Don't you think government will get chummy with certain big shot docs and squeeze out the little docs? What about opportunities for graph and corruption?

In the final analysis, all this will accomplish will be the downgrading of American care while the disadvantaged will still be out of luck and now doctors will be on the government teat. Sounds like a forumla for disaster.

I tremble for my country.

Posted by: egbert on September 3, 2007 at 4:21 PM | PERMALINK

Thanks for welcome, PTate. Glad to be here.

Richard Riley gets the prize for coming to precisely the next question -- who pays, and who does the physician work for?

First, let's remember that there are lots of doctors on salary -- at places like the Mayo Clinic, and Kaiser Permanente, and Group Health Cooperative of Puget Sound, the Veterans Health Administration, and Intermountain Healthcare, some of the best organized medical practices around. The key word here is organized, but I'll leave that part for another post.

These systems are either prepaid, integrated Health Maintenance Organizations (to be distinguished from the managed care we all learned to hate in the '90s). Or, in the case of Intermountain Healthcare, an integrated hospital system that hires its physicians. Or a government-run system with a budget, a la the VA.

They are also demonstrably better at delivering high quality care than the rest of the fee for service world.

So who would salaried doctors work for? Either an HMO, as is the case in Group Health and Kaiser; the government, as in the case of the VHA; or a hospital system, as in Intermountain Healthcare.

Yeah, yeah, yeah, I know, everybody is blowing a gasket right now, saying I'm crazy if I think Americans are going to go for either a government-based system like the VA, or an HMO. All I can say is, look at the data. These systems all do a better job of delivering care that people need, not giving them stuff they don't need, and doing it all for less money.

Oh, and the doctors who work in them are generally more satisfied with their jobs.

Who would pay? Well, employers and individuals pay HMOs directly. All of us who pay taxes help support the VA system. I don't know how Intermountain gets paid.

Posted by: Shannon Brownlee on September 3, 2007 at 4:21 PM | PERMALINK

I am tired of people talking "free market" solutions to social/economic issues as panaceas.
It has all the validity of the "laffer curve". An idea on a napkin that has no real world basis in reality.

Fact is there is not a free market solution for health care. The US system is the case in point.

For example, does VA healthcare (i.e. socialized medicine for veterans) at low or no cost create illness or is it there to serve a need? Similarly, are countries with "socialized" medicine overrun with hypochondriacs?

I pay $550 a month for health insurance and haven't been ill for 2 years; however, I was very ill 3 years ago and went more than monthly. After I got better, I didn't need to go as much. Who wants to waste their time going to the doctor after all?

No the problem is that we have 46 million uninsured who must postpone health care until they are gravely ill and go to the ER. THe question is " who are we as a people that citizens have to be driven to bankruptcy to cover their health care costs if they become ill."

See Sicko.

Mary Anne

Posted by: mroyle on September 3, 2007 at 4:22 PM | PERMALINK


I don't know how our care could be any worse than it already is. We're ranked 27th among OECD countries on quality. We're in the toilet compared to western Europe in terms of infant mortality. Our life expectancy is behind Slovakia, if I'm remembering correctly. I'm not even sure I can find Slovakia on a map.

As for CFG's suggetion to increase the number of doctors to reduce how much they get paid, this has never worked, because supply and demand don't work in medicine.Sad but true.

Doctors and hospitals generate demand for their services, and their ability to do so is quite large, so more doctors simply tends to lead to more care, but not better care, and certainly not cheaper care.

We know this from work done by Jack Wennberg and the researchers who produce the Dartmouth Atlas www.dartmouthatlas.com. They have have documented wide variations in how much care patients with the same conditions are given in different parts of the country, and then looked at whether or not patients who got more care did better. They didn't. In fact, more care leads to higher mortality rates. But that's a topic for another post.

Posted by: Shannon Brownlee on September 3, 2007 at 4:30 PM | PERMALINK

Stange article, because Brownlee never addresses the real culprit - the insurance companies rather then the doctors, whom have indeed play right along for all the kickbacks with referrals, over medications and unnecessary medical test and treatment, however the does article end-up at the same deduction - it is the insurance companies that MUST go in exchange for govenment funded medical programs. This way, doctors who were in it for money alone, will be weeded out as well grossly over priced medical procedures. Ditto for big Pharma companies.

Posted by: Me_again on September 3, 2007 at 4:35 PM | PERMALINK

Here we go again. Physician compensation (what goes into the doc's personal bank accounts ... not what goes to their practice to pay for overhead, rent, employees, etc.) is about 10-11% of total health care costs, other professions are about 8-10%. Cutting salaries for health care workers would not make much of a dent in the cost of health care any more than cutting the pay for carpenters would cut the cost of real estate. The excess overhead that is lost to insurance companies vs. the overhead in UHC countries is greater than our total physician compensation and close to all health care worker compensation.

Currently, I make about 40% more than I did as an engineer without the benefits that I had as an engineer (paid vacation and sick leave, dental and vision insurance, 401K matching, even a defined benefits pension). I also work about 25% more hours than I did as an engineer including holiday, night and weekend hours. I needed a four year degree to be an engineer, but I needed a four year degree plus another seven years of training to become a physician. During those additional seven years of training not only did I pay tuition, but I also did not acquire the savings toward retirement that I would have acquired had I remained in engineering.

I have friends who are primary care MDs in France. They lead a comfortable, upper middle class lifestyle like I do. There are certainly docs in both countries who have "riches raining down" on them, but they are doing cosmetic work (aesthetic dermatology, plastics, Lasik) in order to make those million dollar salaries and despite being "doctors" are not really providing health care.

I suppose that you might lower individual incomes by training more doctors, however, I doubt that you would decrease the total expenditure easily. More doctors would each work less and probably happily. Already in this country just about any one with a decent educational record (I did some pre-med classes at a JC and had roughly a B-B+ undergrad average) can get into medical school. About 25% of newly licensed physicians are foreign graduates and about 85-95% of primary care residencies are filled each year. It's not clear to me that many people are clamoring unsuccessfully to become physicians. I am a big believer in universal higher education, but I doubt that removing the relatively minor impediment of tuition would influence anybody to go into medicine. The real cost is the amount of time spent training. If anything, as medicine becomes increasingly complex, more training may be required.

Posted by: J Bean on September 3, 2007 at 4:40 PM | PERMALINK


I don't really care if people want to get nose jobs and Lasik surgery and Botox -- as long as I don't have to help pay for it. There's no reason to prevent that stuff, provided it's safe (or at least sort of).

It's the stuff we all pay for collectively that's the problem. Our current health insurance system is: A) insanely expensive; B) providing poor value for the dollar; C) unaffordable for the vast majority of Americans; D) a necessary evil. Most of us who don't have enough money to pay out of pocket should we fall ill or be seriously injured. Many of us can't even pay for routine care.

If we had a government run system, like the VA, there would always be room for doctors in private practice doing a cash and carry business. I have no problem with that. Doctors have a variety of motivations for doing what they do, and money is just one of them. There will be plenty of doctors out there who would be happy to work in a well-run, organized system, that allows them to do what they went into medicine to do, which is care for patients -- provided we pay them well. As we should.

Eventually patients would find out that the best care isn't going to be found at the cash and carry dermatologist's office. It's in an organized system like Mayo or the VA.

Posted by: Shannon Brownlee on September 3, 2007 at 4:44 PM | PERMALINK

Doctors need to be put on salaries.

As good a statement as you have ever made, Kevin. Single payer, universal health care w/o some cost control is not a solution.

Posted by: Michael7843853 G-O/F in 08! on September 3, 2007 at 4:47 PM | PERMALINK

I don't get it. Perhaps future posts will clarify things, but you aren't making sense so far.

When doctors go on salary, will it matter how many patients they see or how many procedures they perform? Will they get sent a check for $200,000 each year just for being a doctor regardless of whether or not they see patients? What happens when their employer tells them they need to see 50 patients a day to bring in revenue and be worth maintaining on staff? Mayo isn't a good example because it gets a lot of donations, and Kaiser isn't a good example because it does not take care of its patients or doctors.

Also, intelligent reimbursement tightening could help our system a lot. When a specialist can spend less than five minutes with a patient and bill for over $300, then we've got a problem. If Blue Cross or any other provider refuses to pay more than $50 for a five minute nonprocedural visit, then God bless them, and this is the first time I've ever defended an insurer.

Posted by: reino on September 3, 2007 at 4:50 PM | PERMALINK

When doctors are on a salary, they are no longer working for themselves, but working in a system. At least that's true of Mayo and Kaiser and the others I named. The reason its important that they are in an organized system is that what they do get's monitored -- often by the other physicians in the system. It's self-correcting, in many ways.

Many hospitals get donations -- but they don't do as good a job as Mayo. So that's no reason to discount Mayo.

And show me the data that says Kaiser patients get worse care. They don't. They get better care on average. And doctors everywhere bellyache (just like journalists everywhere bellyache). But in general, doctors who work in organized systems know they are doing a better job and have greater job satisfaction.

Posted by: Shannon Brownlee on September 3, 2007 at 4:58 PM | PERMALINK

Our medical school system is not producing the type of physicians we need, and the laws of supply and demand seem to work if you're talking about the cash and plastic credit economy sector (we have lots of docs willing to inject botox, enhance bust lines, and fix visual acuity with laser surgery because they avoid government or insurance issues for the most part).

Many, many hospitals now struggle to provide care in specialties such as orthopedics, ENT, neurosurgery, and plastic surgery. In the past, the elective money-making (and sometimes unnecessary) surgeries had to be done in hospitals so the specialists were tied to duties to help out with emergency patients. Now, with outpatient surgical centers, they don't even need to take call or belong to a medical staff. It's undeniable that a job without "on-call" interruptions on nights and weekends is a more desirable situation. When you can haul down $300-500 K (or more) in an antiseptic world, why would you bother with a hospital? I am sure these docs work hard for their earnings, but the sum total of their efforts don't aid in the need for provision of health care as an overall system.

And there are severe shortages of many physicians of all types in smaller towns and a dwindling supply of family physicians nationwide.

Our "privatized" health care system has no answers for these physician mismatches, as the money keeps rolling in for medical/surgical procedures and not for primary care and not for provision of hospital specialty care. Many medical schools don't help with their academic and specialty emphasis (students interested in primary care were considered scum even when I went to medical school 30 years ago).

I don't know the answer, but I cringe when I think that a even a small chunk of our medical school graduates are so dedicated to attaining careers in the boutique sector. Perhaps tuition relief in exchange for with a term of commitment to primary care hospital-based care in needed specialties would help.

Posted by: Jory on September 3, 2007 at 5:16 PM | PERMALINK


So, doctors do make-work to raise prices, so they can be wealthy.

How do we let them be wealthy enough to satisfy them, without having them waste resources and destroy the customer's/patient's wallet?

What exactly are the most wasteful ridiculous aspects of the health care system which cause us to have such high prices to pay?

Are there any simple obvious ways to prevent the gouging and waste?

Should all doctors be put into organizations and paid a salary to handle their share of the work load? And, then allow them to handle extra over-time work if they want to make extra dough, at any rate they desire to charge?

Posted by: MarkH on September 3, 2007 at 5:18 PM | PERMALINK

Does the fact that Kaiser had to settle a court case involving the dumping of homeless patients on the streets count as data? Does the fact that they screen carefully for preexisting conditions prove that they are not the model for a national system?

Posted by: reino on September 3, 2007 at 5:25 PM | PERMALINK

Yes, dumping of patients is bad. But it doesn't mean patient care as a whole is bad. And ALL insurance companies these days are carefully screening for preexisting conditions, the the LA Times wrote about earlier this year. Data no, antidotal yes.

Posted by: Tigershark on September 3, 2007 at 5:52 PM | PERMALINK

For all of you policy wonk wannabes out there, you really should visit a VA hospital. They are not the same thing as a civil hospital. VA centers do not have labor and delivery, obstetrics, neo=natalogy, pediatrics, barely have GYN, usually do not have Emergency Departments, do not have sports medicine, tropical medican, and many other things that large medical centers have. They also do not have welfare patients and have a much higher compliance rates from the patients.

So, now the policy wonks want to design a system of regional not-for-profits medical systems who will contract with the government and put physicians on salary. Of course, it puts every urgent care clinic, small internist practice, and many other out patient clinics out of business.

All that does is replace insurance company overhead with large corporation overhead and make getting small things like flu shots, physical exams, and your kids nose looked at much harder than it is now.

Posted by: superdestroyer on September 3, 2007 at 5:54 PM | PERMALINK

Oh, for God's sake. With all the waste in the health care system and all the ways to make the system run better, and some idiot has to focus on doctors, accusing them, as a class, of perpetrating large-scale fraud to maintain their incomes.

Well, I call bullshit.

Posted by: expatjourno on September 3, 2007 at 5:56 PM | PERMALINK

expatjourno is correct. You can't just say that you're going to cut out the 5% of procedures that are harmful--people have been trying to do it for decades with very limited success. Better to focus on the major problems of our current system--the fact that doctors and patients spend a lot of time negotiating with insurance companies and many patients end up bankrupt or seriously financially damaged.

I can see putting doctors on salary, but I can't advocate companies like Kaiser being the ones to run it. The company's business model involves denial of service to patients who need it and avoiding preexisting conditions, two ideas that we can't base a national system on. Additionally, they will fight tooth and nail against regulations that prevent them from encouraging doctors to see more patients and deny more services. If you want a system to focus on patient care, then you need a system without Kaiser. (The hospital can stay as long as they stop dumping homeless people, but the HMO has got to go.)

I also have trouble with the idea that some fix to the system is as simplistic as paying people the same money but on salary. Doctors' incomes vary wildly now, and any change is going to cause some doctors to make less money. I don't think we can pretend that all doctors are going to embrace (or end up revenue neutral with) any particular change.

Posted by: reino on September 3, 2007 at 6:09 PM | PERMALINK

Before WWII physicians as a group were not that wealthy. It was only with the advent of third party insurance that physicians’ incomes took off. Many of my friends who are physicians complain about dealing with the insurance companies, but whoever pays the bill gets to make the rules.

There does seem to be a lot of resistance among the medical schools to turning out more physicians in general, and more family physicians in particular. Very little evidence of an active conspiracy, more like lots of anecdotes about an old boy (and girl) network that badly wants to maintain the status quo. There was a lot of pressure from the AMA against the military when they opened their own med school to ensure their supply of docs. The Uniformed Services Med School may be a good model; students get a full ride but are obligated to serve afterward.

Posted by: fafner1 on September 3, 2007 at 6:13 PM | PERMALINK

Does this count as data?

How about this?

Does this count?

It's hard to research Kaiser because there are hundreds or thousands of websites put up by Kaiser about Kaiser, and they all claim that the patient care is totally awesome.

Posted by: reino on September 3, 2007 at 6:19 PM | PERMALINK

The VA has been touted as a great example of how we should organize medical care. While the VA has improved in recent years, it should be remembered that for decades it was considered a prime example of where you didn't want to end up if you were a sick veteran.

When medical care is someday delivered as a "free" good from the government, does anyone really think that somehow unnecessary treatments will wither away without extensive government controls over the medical profession and patients?

Posted by: harry on September 3, 2007 at 6:23 PM | PERMALINK

[Deleted trolling. OCD much?]

Posted by: mhr on September 3, 2007 at 6:59 PM | PERMALINK

Having been a salaried physician all my professional life I think it's a great idea. I would go further: all docs with the same number of years of training should make the same salary.

Wow. Hear the surgical specialties screaming. (Being in a surgical specialty I hear them clearly.) But surgery, while more spectacular, is not more difficult or more important than properly diagnosing, treating, and maintaining hypertension, diabetes or ulcerative colitis. Or differentiating between a URI, otitis media, and meningitis.

Furthermore surgeons should do surgery. Lots and lots of it. That's how a surgeon keeps skills, as well as scalpel, sharp. Surgeons should not be doing pre-op and post-op care except tangentially. (Many of them actually have such a system now with PAs, residents, etc.) Even worse, surgeons should not be doing general medicine in the office 3 to 4 days per week and operating only weekly or less.

Such a salary system would help discourage the oversupply of physicians in "glamour" specialties. It would also permit more rapid changes in accepted treatments. When a new or different method of treating a disease is developed it's far easier to get it widely accepted and properly evaluated if neither the docs whose procedure/treatment becomes outdated nor the docs whose procedure/treatment replaces the previous standard do not have financial interest in the outcome.

Posted by: caduceus on September 3, 2007 at 7:01 PM | PERMALINK

Unconvoluting that last sentence:

...if neither the docs whose procedure/treatment becomes outdated nor the docs whose procedure/treatment replaces the previous standard have financial interest in the outcome.

Posted by: caduceus on September 3, 2007 at 7:08 PM | PERMALINK

I am an ER doc working half-time in the private sector on a fee-for-service basis, and half-time in a public hospital on salary, so I am in a good position to compare the two systems.

It is a misconception is that doctors get paid more for ordering more tests. I am paid on the basis of the complexity of my decision-making, nothing else. There are 5 billing levels for a patient encounter, and the encounter is billed based on the complexity of the case and the number of life-threatening possibilities.

A second misconception is the idea of an "unnecessary test." If I order a CT scan to exclude appendicitis and it returns negative, was that test indeed "unnecessary?" About 15 years ago, the legal climate began to change such that there is now a demand for 100% sensitivity in diagnosis. While a careful history and physical exam can get you 85% comfortable there is no appendicitis (as an example), blood tests are frequently required to increase the sensitivity by a few more percentage points. For years (because of the legal climate and because CT scans just weren't that good) this was acceptable. But now 100% is necessary. Now a CT scan is necessary. Because if I have a single patient in that small percentage, I am liable for missed diagnosis. A similar scenario exists for many different diagnoses.

That is why I order more tests in the public hospital. My patients are unreliable and frequently have no resources or primary doctors. I cannot be sure they will understand discharge instructions or return if they worsen. So I perform more scans.

Posted by: House Whisperer on September 3, 2007 at 7:17 PM | PERMALINK

The targets need to be squeezing hospitals etc. that duplicate high-end services of other hospitals, and squeezing medical schools to rein in tuition.

Posted by: SocraticGadfly on September 3, 2007 at 7:20 PM | PERMALINK

For most universities, a medical school is a huge money loser. Tuition does not begin to cover the costs. Also, hospitals have waiting lists now for expensive procedures such as stereotactic radiosurgery, PET scans, computer guided neurosurgery.

Posted by: superdestroyer on September 3, 2007 at 8:04 PM | PERMALINK

I have great insurance (I work in higher education) and I also had a breast cancer in 2005--and it feels like I'm still seeing doctors all the time, getting lots of tests, taking lots of medications (some for sideeffects of the others)--but despite two Ph.Ds working on this (me and my husband) we can't tell if I'm being over treated or if this is all necessary to keep me well.... I do question the doctors, but each feels they are doing what is best...

Posted by: elisabeth on September 3, 2007 at 8:57 PM | PERMALINK


You are right, even though we docs are a typical target. I want universal health care and provide much free care as part of my salaried university job because I feel it is part of my responsibility. Whenever this topic comes up, I just ask those suggesting it why they think doctors should lower their standard of living going forward to pay for it? ...


Oh boo fscking hoo. Cry me a river.
How about we just open up the medical colleges so that the number of doctors isn't severely throttled by the AMA and let supply and demand take care of it?

This is the thing that makes talking to so-called libertarians so frustrating. They can't stand the idea of curbs on the activities that benefit them, but they are all about retaining the curbs that prevent any competition.

Posted by: Maynard Handley on September 3, 2007 at 9:08 PM | PERMALINK

The core of the problem is that insurance companies have inserted themselves as the middleman between the patient and the doctor and contribute nothing to the equation. It is the insurance company that is the parasite, bleeding the system dry. They need to go away.

Posted by: The Conservative Deflator on September 3, 2007 at 9:18 PM | PERMALINK

Ms. Brownlee, thanks for the response to my question about who would employ the doctors.

A few follow-up questions, maybe for one of your subsequent posts:

Would there really be no more self-employed, independent contractor physicians? As I am sure you recognize, that would be a HUGE change in the medical profession. I know that more and more physicians are employees of some organization now (HMO, big nonprofit, government, etc., as you say) as opposed to the traditional hanging-out-the-shingle model. But self-employed doctors are still a very major component of the healthcare system - especially in small and midsize cities.

In the Southern town of 40,000 that I grew up in, for example, even today there are a handful of employed ER doctors in the hospitals, and a handful of employed physicians working for state institutions, the county health department, and the like, but the vast majority - I'd guess 80% - of physicians are still self-employed in practices of no more than a dozen or so physicians. In light of situations like this, how would your "all doctors are employees" model really work in practice?

Would doctors really be forced into employment with some big organization, even if they wanted self-employment? Would a medical graduate's only options be (i) employment in some institution or (ii) self-employment with his or her practice limited to self-pay patients, presumably meaning cosmetic surgery or otherwise treating rich patients only?

I hope you'll deal with these practicalities. You seem much more sanguine about having every doctor employed by some bureaucracy than I am.


Posted by: Richard Riley on September 3, 2007 at 9:19 PM | PERMALINK

The government should have always provided training and paid salaries to doctors. The reward should have been the work, not the Porsche. A for-profit medical system is actually extortion. How much does life really mean to you? Who/What are you willing to sacrifice to survive? The real math of this was always degrading and dehumanizing. We kill the poor in America. Incrementally, but the reaper waits for that installment plan to fail. . .

Posted by: Sparko on September 3, 2007 at 9:25 PM | PERMALINK

$215,000 a year? What cannabis are you smoking? My sister, a primary care doc, hasn't been able to make any where near that amount in the 20 years she's been practicing. And please, save the malarky about seeing more patients. Perhaps she should put an egg timer on the counter and after the patient has complained for five minutes, she should get up and walk out the door so she can see even more patients. That would appeal to you, no?

Here's the bottom line, Shannon, and I can't believe you are an "expert" yet you don't seem to know this: Medicine is not piece work. Human beings are not pieces of meat.

Blue Cross and Aetna and all the others continually pay below what it costs for treatment. They do it day in and day out and the person who gets stuck is the practice (in our case, my sister has a private practice and we get stuck shelling out $15 for a $7 flu shot reimbursement).

And, you can cut the crap about phony procedures: that just isn't the truth by any stretch. All it takes is one procedure to save your friggin' life (like the 50 year old professional my sister saved by going out of her way and ordering more tests - he had leukemia and he is alive today as a result - had she not gone above the normal "procedure" level, he'd be pushing daisies up somewhere). Suddenly, those "procedure" you hate are worth their weight in gold.

Bottom line: one payer is needed and the government is the only one big enough to do it. Get rid of all the insurance companies and you'll save zillions and everyone will get the healthcare they need regardeless of who they are.

Posted by: LuigiDaMan on September 3, 2007 at 9:32 PM | PERMALINK


As a group you will find that we are a little more sophisticated than the average bunch.

Try making and arguing a more well rounded proposal.

The way to reduce the financial incentives from paying doctors for giving doctors they don't need is to develop and enforce a strong professional ethic against medical fraud. Maybe putting a few of the most outrageous in prison might help? How about taking away a few licenses?

Posted by: Ron Byers on September 3, 2007 at 9:36 PM | PERMALINK

"treatments" not "doctors." Preview is my friend.

By the way Shannon, I think LuigiDaMan is much closer to having the right take than either of us.

Posted by: Ron Byers on September 3, 2007 at 9:40 PM | PERMALINK

Wow, right out of the box with a commentary that is smug, snotty and superficial all at once. Expatjourno is 100% correct. Pay no attention to the drug companies and for profit insurance companies siphoning billions of dollars out of the system and creating massive overhead and administrative costs. While Ms. Brownlee is attacking those darn doctors, Anthem/Well Point (or whatever name Blue Cross is going by), its CEO and its shareholders are laughing all the way to the bank.

Posted by: Steve Jung on September 3, 2007 at 9:50 PM | PERMALINK

Just my $.02 worth - if you're going to talk about putting doctors on salary, you'll have to do something about paying for their medical training so they don't begin their careers with $250,000 or more in student loans to begin paying off with a (potentially) reduced income.

And while you're at it, you'll have to do something about malpractice insurance rates. One useful thing might be to completely change the way insurance is done in the US - make it nonprofit, or turn it into a pool where doctors in a group pay into it and every year there isn't an award you turn the money back to the member doctors (minus administrative fees). You let the doctors govern it and it might even become self-policing (because keeping bad doctors in the pool will cost the others lots of money).

Posted by: Chris W on September 3, 2007 at 10:37 PM | PERMALINK

Cut her some slack. This is the first post of a week of posts.

The medical profession gets too little of the blame for the sorry state of American medical care. Remember the AMA has been a staunch opponent of any attempt to move to a more rational system. Doctors are not innocent bystanders.

In the early 90s I went to visit my mother in Fort Lauderdale. There was a huge article in the Sunday paper analyzing the state of medical care in Florida. With more doctors per capita and more competition the doctors just raised their prices because they felt they deserved a certain standard of living.

Go in and tell your boss that you deserve a higher standard of living and see where it gets you.

Posted by: Stuart on September 3, 2007 at 10:43 PM | PERMALINK

When doctors are on a salary, they are no longer working for themselves, but working in a system.

Absolutely! And no! no! no! to this. Doctors continue to be able to choose procedures and patients continue to be able to choose their doctors (actually moreso than seems possible in the current American system of socialism for companies). Keep this apart from a single-payer government-run health insurance system. That said, there's no reason not to cap the number of procedures.

The doctors are not the villains. The vast majority of costs are associated with the private insurance companies. IIRC something like 30% of your costs are 'paperwork' In any system that involves insurance companies they will quite predictably be working to jig up the costs. Quite predictably. You can never adequately regulate for this and they DON'T bring any efficiencies to the system. They need to be relegated to the fringes of health insurance, like in the rest of the world. This is like using a water pistol on a raging fire.

Posted by: snicker-snack on September 3, 2007 at 10:55 PM | PERMALINK

Adding to the lots of good points in the comments above, is the fact that quite a number of physicians don't do procedures, and so can't use that option to offset reimbursement cuts.

My spouse is an infectious disease physician in private practice, who treats many, many, uninsured uncovered individuals with HIV, and other IDs. (About 25%, minimum are uncovered) Just because you or poor or close to it doesn't mean your covered by Medicaid. She and her partners are already treating dozens of patients a day, and on the call weekends, it runs to 60 patients/day + new consults =18 hour days). No way they can see more patients to similarly offset reimbursement cuts. And when doctors here in SC say that treat X number of "private pay" patients, that means those who will generally not pay a cent for their care.

What the new Medicare/Medicaid and Blue Cross cuts will do is drive more physicians into hospital-based practices, and/or consulting/research jobs which are much more predictable in terms of hours. After you reach your mid-50s, its hard to justify 70+ hour weeks for 150,000 a year.

Posted by: Chas on September 3, 2007 at 11:08 PM | PERMALINK

Many hospitals tried employing physicians (in MSO models) and putting them on salary, and the docs responded by playing more golf.

The hospitals responded by putting productivity formulas in physician contracts, so the docs ended up at just about the same place they started, except the hospitals were on the hook for the overhead.

No easy answers here.

Posted by: save_the_rustbelt on September 4, 2007 at 12:06 AM | PERMALINK

While Ms. Brownlee is attacking those darn doctors, Anthem/Well Point (or whatever name Blue Cross is going by), its CEO and its shareholders are laughing all the way to the bank.

Wellpoint's 2006 financials reported about $56 billion in revenues. Of this, $42.5 billion was distributed as benefits or drug costs. $8.8 billion was overhead (administration, etc.), and $1.8 billion was taxes. About $3 billion was net income.

Posted by: Ein on September 4, 2007 at 12:07 AM | PERMALINK

Functioning first world healthcare systems that approximate what true reformers are trying to achieve in this country are the norm. There is no shame in learning from the successes of others and there is no honor in not fighting for what is right and attainable. People need to be reminded that the greatness of the founders was inspired by the ideas of foreigners. Our national narcissism is self-defeating.

Posted by: Michael7843853 G-O/F in 08 on September 4, 2007 at 12:45 AM | PERMALINK

Thanks, Ein. So only 76 cents out of every premium dollar paid to Wellpoint went to providing medical care, compared to anywhere from 90 to 98 cents per dollar under Medicare (depending on whose methodology you accept).

Let's turn our attention back to single payer health insurance. Though both crowd pleasers, I suspect that "doctors ordering unecessary procedures just to increase their income" is to the high cost of medical care, as "welfare queens driving Cadillacs" is to the cost of public assistance.

Posted by: Steve Jung on September 4, 2007 at 1:09 AM | PERMALINK

P.S. While I stand by my characterization of Ms. Brownlee's post, her subsequent comments in this thread have been quite thoughtful, so hopefully that was an aberration. In fact, as someone who grew up on Kaiser, I agree with quite a bit of what she is saying, and would expect that salaried physicians would play a substantial role in any rational national health care system as an option.

Posted by: Steve Jung on September 4, 2007 at 1:28 AM | PERMALINK

Steve Jung's "welfare queen" comment is about right. There are certainly docs who order too many procedures and tests because it's pretty easy to persuade yourself that you are taking extra good care of your patients while enhancing your bottom line. However, there is an entire aspect that's been left out of the equation. People like tests. They like them a lot. Multiple studies have shown that patient satisfaction rises with the number of tests ordered. It's fashionable to claim that "no one wants extra medical care", but it's just not true. I've only met one person who wanted extra, inappropriate colonoscopies, but every day I get requests for MRIs, labs, x-rays, bone densities, antibiotics for colds, referrals to specialists for routine conditions, etc.

Posted by: J Bean on September 4, 2007 at 2:20 AM | PERMALINK

Though both crowd pleasers, I suspect that "doctors ordering unecessary procedures just to increase their income" is to the high cost of medical care, as "welfare queens driving Cadillacs" is to the cost of public assistance.


Posted by: expatjourno on September 4, 2007 at 5:22 AM | PERMALINK

As Harry points out upthread, there was a period, too long, of neglect in the VA system. However, the Trouble with Harry's point, is that he does not explain the reasons. In those days of the late 50s through the 80s, the VA system was the step child in the defense system.

One of the reasons for the lack of money and concern by the government was because of the success of that greatest of all government ideas, the GI Bill of Rights - Many returning vets availed themselves, as well as Korean vets, and were able to find work in the private sector, where they were covered by company medical plans. By the early 90s, more and more vets were losing their medical coverage and had to turn to the VA. This prompted the Clinton Administration to upgrade the system. Record keeping, and pharma systems are superior. Many fine Doctors and staff, including Emergency, at our local Portland and Vancouver facilities. Sharp young Primary Care doctor caught my Diabetes Type II in time, just last year.

But, the system is still underfunded. And, I might add that LugidaMan's last paragraph speaks volumes.

Posted by: thethirdPaul on September 4, 2007 at 10:21 AM | PERMALINK

This pediatrician would be happy to have a fair salary, rather than piece-meal payment. Of course, I'm making less than 100K now, mostly because our society doesn't value children, and doesn't reimburse for their care at the same rate as older people.

Doctors will scream and yell, but in the end, they will be happier, being allowed to practice medicine within some logical constraints rather than the crazy quilt situation we have now.

I know that universal health care would lead to a restricted formulary of drugs. You know what? All of my patients have restricted formularies, and many of the private ones don't make any sense!! I have to use a Palm to TRY to keep track, and I still get parents coming back saying that the med I prescribed cost them $150 for a month's supply. (I wish they'd call me from the pharmacy when that happens--I try to encourage that.)

The current system is unsustainable. It is already in the process of imploding, like our nation's infrastructure. It's just that the failures are occurring on a more personal scale, in homes all over the country. What has happened to our country? I thought we were the best in everything, and we can't even immunize all the babies?

Posted by: DrFood on September 4, 2007 at 11:19 AM | PERMALINK

Well, I can tell you one reason patients ask for tests. I know which tests my doctor will want to do, and I want to get those done before my appointment so he can have the results when I meet him.

As for the idea that doctors won't want to work for someone else, doctors already work for someone else. If they don't keep a rough idea of what and what won't be reimbursed, they'll be in financial trouble pretty quickly. When it comes to prescriptions, the insurance company calls the tune. If the patient can't afford it, they're not going to take it, and yes, this has been confirmed by numerous studies.

For the average American, healthcare is as rigidly and irrationally controlled as any Stalinist state, and when they can't get treatment, they can't even get any pain relief, because our War on (some) Drugs puts the doctors under the thumb of the local sheriff.

So we drink to forget, and to get some sleep. Yes, we have a lot of alcoholics, but at least nobody's declared war on them- lately.

Posted by: serial catowner on September 4, 2007 at 1:33 PM | PERMALINK

It's hard for the average American to feel much sympathy for a profession where the median income is $215,000 a year.

This would be a lot more powerful if you were stating that $215K/year was average salary. If there are, say, a million and one doctors in the U.S., approximately 500K are making more than $215K/year and 500K making more than that. Those working in public health or in small towns make less than $200K/year.

My cousin, an OB-GYN surgeon without a "permanent" gig, meaning she works at more than one clinic/hospital to keep full-time employment, can hardly afford her malpractice insurance anymore (approx. $50K/year), lives in a two bedroom condo in the suburbs and drives a Honda.

Not all doctors are filthy rich plastic surgeons.

Posted by: JeffII on September 4, 2007 at 1:40 PM | PERMALINK

And, BTW, Josh (first post), sure you get called in the night- by nurses, who work all night long. Yup, there's nothing like skipping your 0200 "lunch" so you can figure out if you need to call the doc or can tough it out until first rounds.

Nursing pay may be going up (tell it to the Marines) but we still get paid 75% of what men would earn in a male-dominated field that required the same skills. I don't think you'll get far calling for less pay for nurses- the hospitals already know they can't provide the care if they pay any less and lose the rest of their nurses.

Posted by: serial catowner on September 4, 2007 at 1:41 PM | PERMALINK

Why am I paying my insurance company a salary... And not my doctor?

Posted by: Crissa on September 4, 2007 at 5:13 PM | PERMALINK

"Kaiser isn't a good example because it does not take care of its patients or doctors."

Kaiser in California was #4 out of 25 HMOs in an NRC study. Try again.

Posted by: Sock Puppet of the Great Satan on September 4, 2007 at 6:20 PM | PERMALINK
This would be a lot more powerful if you were stating that $215K/year was average salary.

No, it wouldn't. First, because average is an ambiguous term which can, among other things, mean "median", but more importantly because, if it was "arithmetic mean" (the most common use of "average"), it would be less powerful, since a relatively small number of doctors making far above $215,000 could make the average $215,000 while the vast majority of doctors made significantly less than that, while the median means that a randomly-selected doctor is as likely to make more than $215,000 as less than that.

Posted by: cmdicely on September 4, 2007 at 6:56 PM | PERMALINK

No, it wouldn't. First, because average is an ambiguous term which can, among other things, mean "median", but more importantly because, if it was "arithmetic mean" (the most common use of "average"), it would be less powerful, since a relatively small number of doctors making far above $215,000 could make the average $215,000 while the vast majority of doctors made significantly less than that, while the median means that a randomly-selected doctor is as likely to make more than $215,000 as less than that.
Posted by: cmdicely

No, because most doctors aren't making seven figures a year (nor are there just a few making so much more than that so that they'd weight an average) and because there are more 500,000 doctors in the U.S. Therefore, an average of $215K/per year would be a more significant statistic than that figure being the median.

Sure, by your seven-year old literalist's reasoning, we have just five doctors in the U.S. with the lowest paid making just $50K, the next lowest paid making $175K, our man and/or woman in the middle making the $215K, then Doctor X making $550K and, finally, Doctor XY, the Gate-Buffet hybrid, making $5.5 million. Then you'd have a fucked-up average. But, again, we don't have just five or even 50,000 but approximately 800,000 doctors in the U.S.

Posted by: JeffII on September 4, 2007 at 8:01 PM | PERMALINK



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