Disparity in pay divides doctors


Income inequality in medicine pushes specialists out of fields where they’re needed. This can be corrected. (istockphoto)
October 22, 2012

Recently, a medical student confided in me a thought that few in our profession would dare say aloud: “We may have come to medical school to help people, but we choose our specialty careers based on potential salaries.”

This in part explains why the most-prized residencies are in fields such as dermatology and radiology, whose procedures generate high fees. According to a physician survey by the Medical Group Management Association, the median income of specialists is nearly twice that of primary-care physicians — $384,000 vs. $212,000. The highest-paid gastroenterologists make about $846,000 a year; the highest-paid internists make about $352,000.

As in most professions, it has long been true in medicine that specialists earn more than generalists. They train longer and in many cases pay higher insurance rates, but these factors don’t fully explain the chasm. We’ve now reached a critical point where the income disparity is harming the general population.

(Full disclosure: I am an infectious-disease doctor and make somewhere between the median income of a primary-care doctor and a specialist.)

It is, for example, a major cause of the dearth of primary-care doctors in the United States. The Association of American Medical Colleges estimates that by 2020 the shortage of primary-care doctors will reach more than 45,000 — that’s about 5 percent of the 851,300 physicians of all types that will be needed by then, or about 10 percent of the needed primary-care physicians.

The scarcity of primary-care doctors is leading many patients to forgo essential medical care or delay it to their detriment. I believe it’s time to intervene.

It’s not the market

Many of my colleagues may criticize efforts to level the playing field as “spreading the wealth” or “socialized medicine,” but I disagree. Physician payments are not determined by market forces or patient demand for a particular specialty. They’re driven by Medicare, Medicaid and private insurance. A 2008 study, for example, found that physicians in the highest- and the lowest-paid specialties (hematology/oncology and geriatrics, respectively), earned more than 50 percent of their outpatient income from government sources.

Moreover, in most cases, Medicare sets a payment amount, like a yardstick, for a procedure or a visit, and Medicaid and private insurers pay doctors a larger or smaller percentage of that fee. As a rule, Medicare pays physicians more for procedures — inserting scopes and cutting into the body — than for cognitive services such as diagnosing, coordinating and counseling. In fact, the widest income gap exists not between primary-care physicians and specialists but between proceduralists such as radiologists and opthalmologists and non-proceduralists such as endocrinologists and psychiatrists.

Medicare, for example, pays an ophthalmologist nearly $600 for cataract surgery and the insertion of an artificial lens. (As a medical school colleague once told me: The best job in medicine may be an ophthalmologist in Florida.) Medicare pays a gastroenterologist about $200 for a screening colonoscopy. These procedures take about 20 minutes or less.

In contrast, Medicare pays primary-care doctors about $100 for a visit that might take more than half an hour and involve evaluating and managing a complicated patient with diabetes, emphysema and congestive heart failure.

While it’s true that some specialists, such as general surgeons, typically work longer hours than primary-care doctors, studies show that primary-care doctors often work nearly the same number of hours per week (about 57 for internal medicine) as most specialists. And although specialists do have additional years of training, a 2010 Health Affairs study showed that a cardiologist quickly recoups the lost income from the training years and has a $5.2 million wealth accumulation over a career, compared with a primary-care doctor’s $2.5 million and an MBA graduate’s $1.7 million.

Gaming the system

“The system has been gamed by the specialists,” one primary-care doctor told me. The specialists “have the strongest lobbies in Washington and greater representation on influential medical committees.” He cited the example of an expert committee of the American Medical Association, which recommends to Congress the monetary worth of doctor visits and complicated procedures. Of the 29 physician members on the committee, 24 represent specialists and five represent primary-care doctors. I can’t imagine such a committee deciding to recommend a pay cut for specialists.

Last year, the Medicare Payment Advisory Commission, an independent group with less specialty physician influence, recommended a fee schedule that would reduce the disparity in physician incomes. This plan would require that Medicare cut specialist payments 6 percent per year for three years and then freeze them; meanwhile, payments to primary-care physicians would remain unchanged for 10 years. In the end, these changes would lessen the disparity between primary-care physicians and specialists, but they might not be sufficient to encourage more medical students into primary-care residencies.

The American Medical Association and the American College of Cardiology vehemently oppose such a formula. The American Academy of Family Physicians also opposes the proposed cuts, though the group’s president, Glen Steam, said that although income “does not have to be redistributed,” if that “is what it took, it is not an inappropriate option.”

Most specialists with whom I have discussed the issue agree that primary-care doctors should be paid more, but most oppose increasing primary-care payments by decreasing specialist payments.

I believe that the government needs to increase Medicare payments for coordination of care — for the work of doctors in such fields as internal medicine — and decrease payments for procedural care. This would pave the way for market forces to entice medical students to enter specialities like internal and family medicine. In the transition, Medicare need not decrease overall physician salaries — otherwise, smart and talented students would be deterred from medicine entirely and stifled by the average medical student’s debt burden of $161,000.

Understandably, income inequality among physicians may not engender too much sympathy among patients. Even primary-care doctors earn roughly four times more than the median household does. In fact, 16 percent of the country’s sometimes scorned “1 percent” is made up of medical professionals.

Is it any wonder that surveys show that two of three Americans think that doctors are “too interested in the money”? As the shortage of primary-care doctor worsens, patients need to speak up — since, after all, much of the physician’s salary is coming from their pockets, directly or indirectly.

Jain is an infectious-disease specialist in Memphis and an adjunct assistant professor at the Rollins School of Public Health at Emory University in Atlanta.

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