Thursday, August 1, 2013

Some Doctors Set Their Own Pay

The Centers for Medicare and Medicaid (CMS) sets the rates all physicians get paid and insurance companies base their rates on the same formula.  So who creates the formula?  Well, it's the doctors, silly!  Or at least some of the doctors.  Here's how it works:

A 31 member committee formed by the American Medical Association is made of of representatives from the various specialty societies.   This Relative Value Update (RVU) Committee meets in private and decides how much value each unit of medical work represents.  That unit of work is then assigned a dollar amount and that creates the pay scale.   The catch is that primary care (Internal Medicine, Family Medicine, Pediatrics) is very poorly represented on the committee.  The surgical specialties; anesthesia, radiology and even tiny surgical specialties (like urology or ENT) are equally represented and as a group they get to decide how to value a doctors time and expertise.   This is why primary care has been "undervalued" and underpaid all of these years.  Somehow something done with a scope or a tube or a scalpel is considered many times more valuable than thinking and diagnosing and treating.

This RVU Committee has been criticized for years but no other system has been designed to replace it.  The value that some specialties like ophthalmology and orthopedics are paid has created situations where doctors are paid the equivalent of 12 hours of procedures in a single day.  The panel estimated 75 minutes for each colonoscopy and, according to The Washington Post, one doctor was able to bill for 26 hours of paid work in a single day.  A colonoscopy rarely takes more than 20-30 minutes and most of the work is done by the nurse setting up the procedure.

I have been writing about the fact that fewer and fewer of our brightest physicians are choosing primary care specialties.  This decline has persisted for years and now we have truly reached a crisis point, especially when ObamaCare goes into effect and more people will be seeking care.  It is no wonder that young graduating doctors with $150,000 in school debt would pick a specialty like anesthesia where they could work 8 hours, never be on call, have no practice expense (except a billing and accounting service) and make 4-5 times what an Internist makes.  Thanks to the RVU for the lopsided value they place on medical care. 

Medicare spending is capped.  There is no way to raise the rates for needed physicians (like primary care) unless the value of other services is ratcheted down.  The current RVU Committee is seriously flawed and the time and relative work estimates some of the specialties have come up with is just wrong. Furthermore, this payment method shows no consideration for quality outcomes or value to society. 

The Unites States is the only country where these wide ranges of specialist physician pay is seen.  The Relative Value, as it is done now,  needs to change.




6 comments:

Michael Verhille said...

Michael Verhille said...


So Tony,

I guess you are agreeing that a Medicare reimbursement for a colonoscopy of $220 is outrageous. Do your patients agree? How much do the Sutter Foundation physicians charge for a 35-minute office consultation? Don't answer I know.
It has been the practice of many primary care physicians to blame the fact that they are not rich on greedy specialists. This divisive practice fails to address the real issues. You never see specialists, who have also been facing a greatly decreasing reimbursement, blaming those PCPs who see forty or even 50 "1/2 hour” 99213 appointments in a day. Because it is irrelevant in the issue of how much should a doctor get paid to care for a patient through a colonoscopy which of course includes preoperative evaluation, care during the procedure, care during recovery, follow up on pathology, etc. The idea of placing value of care on how many minutes it takes to provide that care was conceived by an Internist. The gradual decrease in that value over the years produced the predictable response in both PCP and specialists of increasing efficiency by squeezing time spent with patients. This does not make either greedy. Reimbursement for GI docs has dropped so much in SF over the last few years it is almost impossible to hire a new doc. The average age of GI Doctors in my division is well over 60. I am still the young guy at 55.
The only really growing field is Medical Executives, which are truly the ones who are paid well. Hospital Executive pay has skyrocketed; the executives of Physician groups are paid huge amounts of money for very dubious value. Insurance company executives are taking giant paychecks. Maybe you should blog about that.
I would think a well read and thoughtful physician would be more outraged at the shoddy, me too journalism of the New York Times, Washington Post, and even USA Today. Rather than just Parrot the cheap shots.

Mike Verhille

Toni Brayer, MD said...

Mike Verhille: First, thanks for being transparent and using your name in your comments. Despite your passionate criticism of my remarks,I stand behind the fact that the RUC has overvalued procedures and surgeries and undervalued cognitive specialties for years. My comments barely mentioned GI by using colonoscopy as an example, along with other scope driven specialties that have been reimbursed at high rates. I agree that $220 is not overpayment for the time and expertise.

Despite the declining GI reimbursement, however, the fill rate for the recent residency match was 97% in gastroenterology. Compared to Family Medicine U.S. grad fill rate of 48% and Internal Medicine 56%, it is still clear that young doctors are making career choices that will not help our healthcare crisis.

Rather than getting mad or pointing fingers we should work together to reform medical payment so Doctors are fairly paid for the years of training and expertise and patients receive outcome driven value...not just what a specialist thinks he or she might be worth.

Anonymous said...

Seems to me this is just another reason for Single Payer. Let's put the dollars where the true value is: MDs. Let's move back toward health care not health industry.

Michael Kirsch, M.D. said...

I have sympathy for Michael Verhille, who is a GI colleague. It will be tough to find common ground when one specialty must sacrifice for another to benefit. And the new 'quality' metrics that will be tied to reimbursement are a sham. I anticipate that from a financial standpoint that there will be many losers and some partial gainers.

Why do you think, Toni, there is such a gap between the match fill rates for GI and primary care?

Toni Brayer, MD said...

Michael Kirsch: How the heck have you been?

I think there is a large gap between fill rates of primary care and GI because primary care has been systematically disadvantaged and disrespected for the last 20 years and we are now seeing the results. The RUC (which was the point of the blog) has been poorly represented by primary care and consequently they have undervalued the work and low reimbursement (by Medicare and all Insurers) was the result.
There is no reason why radiology, pathology or anesthesiology, three specialties that have no office expense at all should be paid at 2-5 times the rate of primary care.

Additionally medical school academic hospitals are run by specialists and young students never see respected or brilliant primary care physicians while they are in training. They only see hospitalists or specialists.

Our country has never had good medical workforce planning. Physicians (as a whole) are committed, value driven and they are smart. There are many specialties from which to choose that pay well and allow meaningful work and service to humanity. GI is one of them as are about 15 others. At the bottom is the heap is primary care Internal Medicine.