Doctors are among the highest paid Americans.
The median 1978 income for all private, office-practice doctors was probably $70,000, according to latest survey figures and estimates. Only 1 percent of the U.S. population makes that much.
Many doctors earn more. Yet it is not so much what doctors earn as how they earn it that runs up the nation's health bill. Doctors are in a position to generate their own income when they diagnose and prescribe. In effect, they can control the demand for the very services they supply.
Doctors' fees alone consume just $1 out of every $5 of the national health bill, public and private. All the things doctors do, however -- the drugs, tests, hospitalizations and operations they order, plus their fees -- add up not just to that 20 percent but to an estimated 70 percent of the bill.
The doctor is thus a combined salesman, buyer and deliverer of health care. And the kind of care he or she chooses to deliver cannot help but affect his or her income.
For this reason and others, the things doctors do are today under examination and criticism -- including self-criticism within the medical professon -- as never before. In the view of many critics, many doctors' whole practices consciously or unconsciously become targeted toward "income maximization" -- to quote a term used by business consultants whom many doctors hire.
The result, say the critics, is too often an unnecessary or misguided test, treatment or operation.
A Medicaid obstetrician -- a doctor who earns a high income by giving care primarily to large numbers of Medicaid patients, despite low fees per patient visit or per procedure -- was questioned by a medical society committee for giving every prospective mother a sonogram, or ultrasound, exam. Most doctors don't consider the test necessary for every woman; many don't even have the machine to give it. But each such exam earned this doctor an added fee.
Virtually every medical specialty has its own set of tools or machines whose use earns fees. "And the most conscientious doctors -- those who rely most heavily on careful physical examinations and the patient's detailed history and take time to guide and explain and hear their patients out -- earn the least. The charges for pure time are always less than the charges for 'proceures.'" One hears this complaint, in almost the same words, from doctor after doctor who tries to practice this careful, lower-paid kind of medicine.
The operating room is the site of much of the abuse. The nation is undergoing a "surgery explosion," in the view of Dr. Eugene McCarthy of Cornell University. The rate at which we go under the knife has increased in almost every year since the late 1960s, and last year there was one operation for every 10 persons (though some individuals had more than one). McCarthy blames the explosion mainly on a surplus of hospital beds and a surplus of surgeons.
Among the results:
Some 80,000 operations are being done each year to try to increase blood flow to bad hearts. Many do relieve pain or at least temporarily improve life. But the operation is being hugely overperformed because it is "a big money-maker for doctors and hospitals," with 400 surgeons alone collecting "almost half a billion dollars" yearly, says Dr. Thomas Preston, cardiologist at the U.S. Public Health Service Hospital in Seattle.
Many surgeons agree that the radical mastectomy -- the once-standard removal of the entire breast, chest muscles and under-arm lymph nodes for breast cancer -- now need be done in only a small percentage of patients. But in the first six months of 1978, 18 percent of California surgeons who did a breast operation still did the radical rather than a gentler procedure (which earns a few hundred dollars' lower fee).
The number of hysterectomies rose 25 percent between 1970 and 1975, an increase called "staggering" and clearly excessive by Dr. Kenneth Ryan of Harvard. A 1977 Baltimore study found one hysterectomy in six that was unnecessary.
More than 10 percent of all deliveries are now done by cesarean section, a doubling in 10 years, and the rate has reached 25 percent in some hospitals. Obstetricians say the procedure produces many healthier babies. But many also concede that there are added risks to the mothers, and the rate is up partly because they fear a malpractice suit if they fail to "do everything possible."
Johns Hopkins surgeons, concerned that they, as well as other surgeons, were doing too many appendectomies, cut their rate from nearly 65 per 100 patients with "non-specific abdominal pain" to 7 per 100 with no difference in patients' health.
Most of the 750,000 tonsillectomies still being done each year are unjustified or actually harmful, says Dr. Jack Paradise of the University of Pittsburgh. He says the reasons for the high rate range from outdated beliefs to the "financial."
Every procedure has its ardent defenders, who claim lives are being saved or improved.
But a basic fault, says the congressional Office of Technology Assessment, is that "only 10 or 20 percent" of all the procedures doctors employ "have been shown by controlled tests to be beneficial."
Dr. Marvin Shapiro of Los Angeles, former president of California Blue Shield and a practicing radiologist, thinks "at least 25 percent of all services rendered in the name of good care are either worthless, dangerous or on a cost-effective basis something between absurd and questionable."
He blames "peer and public pressure" to be up to date, overuse of routine examinations, fear of malpractice suits, doctors' "ignorance" and failure to stay current, pressure from patients and families who want "everything" since "insurance will pay" -- and also some "greed."
By whatever means -- mainly by genuninely caring for sick people -- America's practicing physicians will collect some $40 billion for their work in the fiscal year that will end Sept. 30, according to a government estimate. The doctors' share actually will be somewhat higher; the estimate for "physicians' services" does not include the sum paid thousands of hospital-based doctors (counted under "hospital care") or military physicians.
According to a survey by Medical Economics magazine, the median office-based doctor's 1977 income was $65,430 before taxes. Adding 6.2 percent (the average by which doctors' incomes rose each year since 1974), the 1978 figure would be just under $70,000.
That figure may understate. Dr. Zachary Dyckman of the Council on Wage and Price Stability thinks the highest earners probably don't answer income surveys.
It is certain that thousands of doctors earn $100,000 and more before taxes, and many are in the $200,000 and higher class. Medical Economics says that in 1977, 3 percent earned $150,000 or more; 8 percent, $125,000 or more, and 18 percent, $100,000 or more. At the same time, 18 percent made less than $40,000; 10 percent, less than $30,000.
Among office-based specialists, orthopedic surgeons earned the most, a median $91,940. Urologists earned $80,770; surgeons in general, $78,220; obstetricians, $78,240; internists, $66,140; pediatricians, $54,180; psychiatrists, $53,790. Family practitioners, members of a new official specialty, made a median $61,760; other general practitioners, $51,030.
This survey did not cover some of the highest earners: hospital-based pathology and laboratory chiefs, radiologists and anesthesiologists. They work for either hospital salaries; salaries and/or a percentage of their charges or on a spearate fee basis by which they send their own bills.
Current estimates of their average incomes range from $73,000 to $164,000, depending in large part on these arrangements, with the pathologistlab men with percentage deals in the lead.
The American Medical Association maintains that some government estimates fail to deduct these doctors' expenses, and that the real averages are at the low end. But hospital ratesetting bodies in several states have been battling some such doctors who collect $200,000 or $300,000 a year by their contracts that give them a share of every laboratory or X-ray charge.
The distance between doctors' incomes and those of their patients has grown in the era of Blue Cross, Blue Shield, Medicare and more and more procedures.
Forty years ago doctors made less than twice as much as other professional and technical workers -- the rest of the educated elite -- and less than three times as much as the average wage-earner. Today physicians average more than four times as much as all other professional-technical persons, twice as much as lawyers and more than five times as much as all wage-earners.
Doctors' earnings have fallen slightly behind increases in their living and overhead costs since 1970, says Medical Economics. Still, last June the AMA's new president, Dr. Tom E. Nesbitt, asked doctors to hold back on ee increases voluntarily, since they could expect government controls if their own restraint failed.
He said fees -- recently rising by 9.2 percent yearly -- should be held to an 8 percent increase this year and 7 percent in 1980. He said "this profession can live with this very comfortably."
The Council on Wage and Price Stability has asked doctors to go farther by limiting fee increases to 6.5 percent this year.
Fee controls, unfortunately, have not always worked. According to a survey of 5,000 California doctors, the federal wage-price controls of 1972-75 had no significant effect on their easily-ascertained Medicare incomes.
Unable to raise their charges, they simply expanded the number of services they did and billed for -- the examinations and tests and operations and procedures -- and kept up their earnings.