The 2.8%


On January 28th, I blogged about the “commercial” in the WSJ proclaiming how insurance companies are going to pay primary care doctors more.   I called it a trap because really it is a bait and switch using unproven quality indicators.   A buddy of mine pointed out the graphic above that was in this article.  I could not believe my eyes.   Of the 954,000 doctors in the United States, there are a little over 352,00 primary care doctors.   With the impending shortage of doctors and the desperate need for primary care docs, it blew me away to find out that the engine running our healthcare system accounts for only 2.8% of our healthcare dollars.  If you said 28% I would have said that sounds low.  But 2.8%!  We are the ones doing most of the work.  We are the grunts.  We are the ones in the trenches.   Where’s the money going?   Well, look at the graph.  I would love to see how much of our healthcare dollars goes to administrators’ salaries (hospital costs exceed 45%). Since there are 5 administrators to every doctor, it seems to reason that there are 15 administrators to every primary care doctor (a crime in upon itself but that is another story).  Who wants to bet that there salaries make up  more than 2.8%?   And that, my friends, is what is wrong with the American healthcare system.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  9 comments for “The 2.8%

  1. Theodore Bacharach
    February 9, 2012 at 5:22 pm

    Evaluating the quality of care and attempting to compensate the physician who does a better job or writes more bullshit is something that is not possible. Oftentimes arriving at a definite diagnosis and a short report that is correct is far more worthy of compensation than the lengthy report that is noteworthy only because it is long and arrives at no conclusions or plans of action. Unfortunately the entities that determine how to rate a report are not able to rate the quality of the care that was provided. It was really great when the person that physicians had to impress were his patients.

  2. Mark C
    February 9, 2012 at 4:26 pm

    Doug- the numbers you provide show that 37% of physicians are in primary care… but account for 2.8% of Medicare spending. What part of the 20.4% of all other physicians/clinical services accounts for the 63% of remaining medical subspecialties? Just saying… the 46% to the hospitals is truly insane since very little of that goes to patient care (as Pat and you explain above). Primary care gets the leftovers once again. ACO, anyone?

  3. mamadoc
    February 8, 2012 at 8:58 pm

    Yeah, I heard that lie too, and it was every bit of 30 years ago. In fairness I think our residency director believed it at the time. The future of medicine is specialists and mid-levels. Sad but true.

  4. Ken
    February 8, 2012 at 6:52 pm

    I remember when I went into Family Practice over 2 decades ago, and how I was told we were the future of medicine. I still hear that lie repeated by FP residency directors from time to time. It’s interesting that we are even lower than “other services” on the graph–I wonder what “other services” are–morticians perhaps?

  5. big picture doc
    February 8, 2012 at 3:12 pm

    And would you pretty please note that it is mostly the private sector that is screwing you?

    • Doug Farrago
      February 8, 2012 at 3:46 pm

      Insurance companies are obviously screwing us. They have always been in my Medical Axis of Evil.

  6. Pat Nagle
    February 8, 2012 at 11:04 am

    I suspect another big chunk of hospital money goes to architecture and P.R. My town has two hospitals-one is part of a big Catholic chain, and one I think is owned by some other corporation. They spend what must be millions putting out glossy/TV/newspaper ads extolling how wonderful they are and what new technology they’ve bought, trying to lure customers. They’re like the Ford and Chevy dealers yapping at each other, only spending millions more.

    And of course they have to have the glossiest buildings and most beautiful lawns in town, also to lure customers. Schools may/may not pass a bond issue when the roof blows off, but these moneygrubbers build whatever they want and pass it on to Medicare et al.

  7. bob
    February 8, 2012 at 8:59 am

    Of that 2.8% of the payments that go to Primary Care Physicians ony 30% actually goes to the Dr’s the other 70% goes to our overhead so reaaly only .84%

    • Doug Farrago
      February 8, 2012 at 9:10 am


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