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

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