Show Them The Money

I’m going to quote two numbers, and I want you to guess what they are:

$584,000

$185,000

Ready?  The bottom number is the average salary nationwide for an internal medicine physician.  So that’s not bad, right?  1% right?  The other number is the average salary nationwide for an insurance company CEO.  Before the million dollar bonuses.  Things that make you go “Hmmmm”.

There has been a lot of data coming out recently from medicare about physician pay.  High billers, sometimes with names used, are all over the papers.  Average salary data and pie charts and graphs and treasure maps and hieroglyphics top internet sites and blogs.  Doctors make so much money!  What are they complaining about!  Selfish bastards!  Money grubbing thieves!  Yeah.  Remember those two numbers?

There are three points I want to make here, in no particular order.  First: spending on healthcare is up around 2.7 billion dollars.  Physician pay is 20% of that.  Uwe Reinhardt, who is much smarter than me, and is an economist, not a doctor, puts it this way in a recent letter to the editor of the New York Times: (http://query.nytimes.com/gst/fullpage.html?res=9B00EEDE163AF936A3575BC0A9619C8B63)

” …cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.  This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent…”

The second point is, admittedly, sort of a 1% problem, but it bears consideration.  Again, Uwe Reinhardt:

“In ”Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid.  A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited.Any college graduate bright enough to get into medical school surely would be able to get a high-paying job on Wall Street. The obverse is not necessarily true. Against that benchmark, every American doctor can be said to be sorely underpaid.”

That argument is a little harder to take, when basically he is saying that talented people (some would say privileged people) have choices about how they’d like to be successful, and given a choice based purely on money people who could go to medical school wouldn’t.  I’d like to believe this isn’t the choice most doctors make.  Most doctors are doctors because they want to help people.  I can’t imagine investment bankers have the same motivations.

My third point relates to the high cost of entry into medicine and the high cost of maintaining a practice.  We’ve heard the overhead argument before.  Take-home pay is less than the gross amount would suggest, because of medical school costs and malpractice, etc..  What about all the data that says that American doctors get paid more than other doctors worldwide?  Kevin Pho, of KevinMD (who needs to be posting my work more often I might add…) used the example of France, where doctors make about half what we make here.  True.  Guess what?  French doctors don’t pay for medical school or malpractice.  Look at Kevin’s graphs, they’re awesome: http://www.kevinmd.com/blog/2014/05/pay-french-doctor.html.  A word to the wise – France’s top tax rate is 71.3%.  I don’t see that happening in the US any time soon.

And so we come to Elizabeth Rosenthal’s piece in the NYT: (http://www.nytimes.com/2014/05/18/sunday-review/doctors-salaries-are-not-the-big-cost.html?_r=0).  Remember that first number?  I mean, if I wanted to make money I wouldn’t be slaving away nights and weekends in the OR, I’d be putting my feet up on my big desk in my corner office and watching my dividends multiply.  Treasures untold indeed.  Let’s not fight about money.  Doctors are not the bad guys.

 

 

For Hank Stern, Life’s a Beach

We’re getting a nice dose of warm weather across the Midwest right now, which makes Hank Stern’s latest Health Wonk Review–Life’s a Beach edition–perfectly timed. It sure would be nice to head to the coast for a while and enjoy the cool water and the nice breeze. Instead, I’ll settle for reading some of the best health policy blog entries of the last couple of weeks. And you can do the same here.

 

Insurance Works. Sort of.

Where did I put that post I wrote on how Massachusetts has the highest health care costs?  I need it now, because apparently all that money is working.  Today I learned that since the mandatory health insurance law was passed in 2006 mortality has decreased by 3%.  Which is 3% more than any other state.

So this is good.  Changes in mortality can really only be measured over years with millions of patients, both of which this study, which came out today in the Annals of Internal Medicine, has.  And these results make a certain amount of sense.  What do people die of these days?  Heart disease, diabetes, infections, cancer.  All of these things, except maybe some forms of cancer, are things that can be treated if treatment is careful and consistent.  Which means a decent doctor, regular appointments, and faithful adherence to medications.  The chances of all three of those things happening definitely increases if patients have insurance.  It actually corresponds to the finding a few months ago that people are using more health care now than they were, even in emergency rooms.  If you take the money component away, they will come, to paraphrase Kevin Costner.

Remember the Oregon study?  It found that giving people insurance improved mental health and financial security, but not physical health.  This is not contradictory to the Massachusetts finding.  Remember that healthcare does not equal health, and lower mortality does not mean more health.  It just means that people with chronic conditions are being treated.  That’s a really good thing.

But.  If you treat more people, it costs more.  The ACA doesn’t do anything substantive to change that.  Health care costs will go up, even if less people die, because chronic, lifestyle- and genetically -based conditions will not go away by insuring people.  For that to happen we need much broader efforts at encouraging health, not encouraging health care.