Doctor salaries today and tomorrow

Matthew Holt has a great post up about the effects of Medicare's cuts to physician fees:

But the problem physicians face is that they don't really have an alternative. Sure some will retire early, some will move to cash only practices. But given that Medicare is about a third of the money in the system, realistically they can grumble all they like but they'll end up taking it, and of course doing more things to those patients to make it up on volume. And that's not just my opinion, it's the findings of this five year study by the HSC folks. After all, they went to medical school and residency for all those years, what else are they going to do? There's only so much room on the poker circuit and only so many of them can run health plans.

That's why I say that physicians should be figuring out how they collude with government to reduce overall spending while maintaining as good a position as they can. That's what's happened in other countries, and one day it'll happen here. Of course there's lots of time for gnashing of teeth and entrepreneurial end-arounds before then.

Now "whether it will happen here" is certainly the eternal question. Doctors have dual stakes -- one in preserving the status quo and its high salaries, and another in high salaries in the future. Unfortunately humans as a general rule tend to plan for now, not "some day in the future", so I wouldn't expect to see doctors jumping on the single-payer bandwagon until things start looking really bleak.

But considering how much higher physician fees are here than the rest of the world, that's probably in the rest of country's best interest (in terms of costs) anyway.

Comments

[Martin]

There is some fancy name for the strategy the physicians are using. My understanding is that there are many situations where a group that is benefiting from a situation that is bankrupting society will refuse to change its behavior beyond the point of bankruptcy. If that is indeed the case, then it seems like it would be difficult to convince doctors to voluntarily give up substantial salaries in the here and now to prevent an uncertain crash in their income.

[shadowfax]

Here's one doctor in favor of some sort of universal healthcare. My motivation stems from frustration with the administrative hassles which stem from working with a few hundred insurance companies, but moreso from the fact that our ER serves about 120,000 patients a year, of the whom I guesstimate 20-25,000 are uninsured and a comparable number are on medicaid. I'm frustrated because a) I don't get compensated for the services I provide and b) these folks have effectively no access to primary/follow-up/non-urgent care once they leave my ED.

I've crunched the numbers for our practice. If you took all the well-heeled insured patients and reduced the compensation to Medicare's level, and took all the no-pay/medicaid patients and increased the payment to medicare levels, it's be close to a wash. I think our bottom line would suffer, but it would be close.

Of course, ERs with a better payor mix would be really hurt -- so don't expect all ER docs to just jump on the bandwagon. In the end, I just want a solution which gets everybody covered. I would hope one could be at least revenue-neutral for us (we don't really make *that* much money), but it's a train wreck in slow-motion and soemthing's got to be done.