Wealthy Physician Fallacy: What's the Value of Your Physician in 2015?

What appeared to be an inexorable and disproportionate rise in health care expenditures adjusted for inflation has waned over the past few years. Partisan advocates have attributed this to initiation of the Affordable Care Act. However, unbiased consensus asserts that the financial consequences of Obamacare will take years longer to be evident. More likely, several other factors have contributed:

  • The recent recession and progress in tort reform
  • Generic drug usage
  • Institution of best practices protocols
  • Integration of physician extenders
  • Computerized medical records
  • Reimbursement incentive modifications

Still, from 1958-2012, the time an average workers would have to be active to cover health expenditures has quadrupled while the time-cost of many durables and services has plummeted, often by 90 percent (especially electronics, cited in FORBES 12/22/12).

No matter the recent trend, cutbacks in payments for provider services is a relentless and persistent tool universally acclaimed as cornerstone to healthcare cost containment. Concurrent with the bludgeoning of physician income is the populist conviction that this is morally justified to combat physician greed and unwarranted overcompensation. Take away the rich medical specialists’ ill-gotten lucre and all will be well. To paraphrase Hillary Clinton during her attempt at healthcare reform, the last thing this country needs is another heart surgeon, at least until her husband needed surgical revascularization.

What makes this politically motivated assault more ludicrous is how fallacious this perception is. Consider first the enormous commitment in time and effort required to gain the educational credentials necessary for medical practice. Undergraduate degrees precede four years of medical school to gain acceptance to a 3-7 year residency in a particular field of practice.

The cost of both public and private graduate and postgraduate study has also skyrocketed. US News and World Report in July 2014 reported the average student loan indebtedness as $170,000 for those individuals who borrowed during medical school. Moreover, this figure does not include the interest accrued while repaying the principal due.

The newly minted physician, after a decade and a half of schooling and incurring significant debt, has one more prerequisite hurdle. Malpractice insurance is the ante for providing medical care. The 2010 “Medical Liability Monitor” showed annual premiums of $48,000 for internists in Dade County, FL and $190,000 for general surgeons. OB-GYN premiums were $205,000 in counties abutting New York City.

These are the costs that must be met by the current and future income. Again, geographical location and specialty significantly influence reimbursement. On a personal level as a cardiac surgeon, Blue Cross/Blue Shield paid $3,300 for a 3-vessel bypass in 1980 when I finished the residency and $2,300 for the same procedure when I retired from active clinical practice in 2009. These are nominal amounts, not adjusted for inflation. No provider reimbursement has been sacrosanct, all have gone down.

So how much do physicians actually get paid?  Online Data Profiles Database published in 2013 representative income for starting physicians and for those who had been in practice 6 years. At the lower end were family practitioners and general internists starting at $138,000 and $145,000 respectively.  Internists’ salaries rose to $213,000, but remaining flat for family doctors after six years. On the higher end, cardiologists and neurosurgeons started at $270,000 and $398,000, respectively, and rose to $405,000 and $550,000 after six years.

Is this unreasonable compensation given the requisite time, effort, competitive scrutiny and cost of preparation and insurance?  Not to mention the continuous responsibility and pressure inherent to the profession.  If an individual had only monetary interest as the goal then he or she would be better served by focusing all these mental and temporal resources in innumerable other trades, crafts, services or professions, and would start earning at a much younger age. It is time to stop demonizing a noble profession and start debunking the fallacy of the unscrupulous, wealthy medical practitioner.


By Norman Silverman, MD, with Ryan McKennon, DO and Ren Carlton

What Kind of Business Should You Start? – How Mark Zuckerberg Pivoted From Rating Hotness to FacebookFind Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 1

When it comes to brainstorming startup ideas, new entrepreneurs and even seasoned ones scratch their heads in confusion. Living in the information age, you can scan the current market and see countless new business ideas. With so many options out there, how do you know which one is right for you?

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As physicians, we are expected to be compliant with rules, restrictions, and regulations. We are expected to be risk averse. We are expected to be “providers,” but not necessarily innovators or leaders. As the healthcare system becomes increasingly consolidated into large overcrowded clinics, we are required to perform to the standards set by bureaucrats and clinic managers. These rules are often at odds with the best interests of patients and with our sanity.

The Alienation Of America’s Best Doctors

The best and the brightest simply don’t want to become doctors anymore. Physicians are burning out. They are leaving the profession. They are going bankrupt. They are selling their private practices to big hospitals. They are retiring early. We are facing a growing doctor shortage.

Better to Live and Die in the U.S.A.

The United States healthcare system is often berated for how it treats patients near the end of life. They are purportedly attached to tubes and machines and subjected to unnecessary invasive procedures that cause inordinate pain with no potential benefit, there is underutilization of more compassionate hospice services. This “travesty” is expensive, as the care of dying seniors consumes over 25% of Medicare expenditures. We hear this story so often; it is almost taken as gospel-- but is it actually true? Is it more expensive and invasive to die in America than in other developed countries?

Gun Ownership and Doctors?

According to the Pew Research Center, there are approximately 32,000 gun-related deaths annually in the United States; 19,000 are suicide, 11,000 are homicide, and the rest are accidents, police shootings or of unknown causation. Moreover, there are more than 78,000 nonfatal gun wounds each year. Given the disproportionate number of victims that are less than 40 years of age, the morbidity and mortality of gun violence is significant. Physicians are involved with many types of public health issues, but few are as controversial or divisive as gun safety. Is it really an issue that falls within the medical domain?

O Tempora, O Mores: Affordable Care Act - Big Dream or Big Let Down?

I confess I was a strong proponent of the Affordable Care Act. My reasoning was subtler than the hallowed pantheons of its staunch supporters and the apocalyptic predictions of its detractors. Forty years after graduating medical school I concluded, after many stutter steps, the American healthcare delivery system was economically unsustainable and the citizenry was neither living longer, nor better, despite medical expenditures that dwarf any other developed nation. My career also allowed me to personally interact with cardiac surgeons from all continents and see that their clinical results and research efforts were laudatory by any standards.

High Depression Rates in Resident Physicians — Fact or Fiction?

The December 8, 2015 issue of JAMA had a startling key clinical point; the prevalence of depression or depressive symptoms among resident physicians in training was 28.8%. The data was generated by meta-analysis of 31 cross-sectional and 23 longitudinal studies published in peer-reviewed journals involving 17,560 trainees. Two-thirds of the trainees were in North America, but the others were from Asia, Europe, South America, and one from Africa. Sensitivity-analysis confirmed that no individual study affected overall prevalence by more than 1% and that the incidence of depression was not influenced by study design, continent of origin, surgical vs nonsurgical program nor level of residency year.

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Hospital Administration Attempts to Cut Costs and Increase Quality at Expense of Physicians

A nonprofit hospital care system in Oregon with 450 beds has been in an acrimonious negotiation with its staff hospitalists for the past 2 years. The mounting economic pressures on this small, community oriented institution have had the expected consequences of hiring new administrators to implement the latest trends to rein in the budget and effect efficiencies of healthcare delivery-- as if that has been so successful in the rest of the country. The battle has really centered over the physicians losing control of their work time allocation, individual decision-making for diagnostic and treatment plans, as well as bristling at bonuses based on the administration’s definition of quality.

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Yesterday afternoon I had the privilege of helping to honor the graduating class of 2016 at Experiencia Preparatory Academy. They have 3 graduates this year that have overcome a special set of challenges, including moving from Mexico to the United States and having English as a second language.

Affordable Care Act: Affordable for whom?

Entering its third annual open enrollment period, Obamacare is the subject of cacophonous political acrimony, again, championed by its supporters and vilified by its opponents. Each side presents its own “metrics” of success or failure
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