This is What We Pay as a Country for Healthcare
This is what we pay as a country for healthcare. Almost 19%. Far more than countries that offer universal healthcare, and far more than some countries that have superior outcomes with their cheaper healthcare.
We have long been decrying low wages and poor reimbursement as problems in healthcare, but as the above shows: this country already pays enough in its healthcare expenditures. More than enough. If primary care is to get better pay, it has to come from somewhere other than the GDP. So where? This is when it gets uncomfortable – the ugly work allocation.
If money is going to be spread around more equally there will be absolute winners and losers in that conversation. I hope primary care is a winner. I am going to offend some with my following diatribe on two groups that need to be losers, in my opinion.
A long long time ago, but not centuries ago, I was in med school. As part of my ophthalmology rotation I was able to watch a cataract surgery. This was about 27 years ago mind you. Numbing drops so the needle that was placed through the conjunctival reflection into the retro-orbital space and the area filled with lidocaine. That was anesthesia. The procedure was a laborious 2-hour ordeal. I, not inclined to that specialty, was bored.
But now, and for a very long time now, the technique is totally different. Anesthesia is a valium and eye drops. That is it. Now a small tool is placed through a small hole in the cornea and a fancy Waterpik and vacuum conspire together to perform phako-emulsion and the lens is removed in a few minutes. Then a rolled up lens is slid through the slit, pop it opens, and it is fitted to the old lens’s place. The entire thing takes 8 minutes. Let me say again, the entire thing takes 8 minutes.
Here is the problem – medicare pays the same rate that it did for the two-hour procedure.
With fancy high contrast crystal lenses an ophthalmologist can reasonably be expected to get about five thousand dollars per procedure. With normal cheap lenses they make less, maybe two thousand. So lets just talk about the crystal lenses that are so popular – and touch on the next sore spot, hospitals. A cardiothoracic surgeon makes between 2 and 3 thousand dollars for a coronary artery bypass surgery. That includes all hospital care, rounding on them, the surgery, and several weeks of global care for aftercare work. This three thousand bucks – we need to tell patients how much their surgeon makes, because they are getting stacks of EOBs and they assume the surgeon makes half. They don’t. 150 thousand dollars for a bypass surgery is common – but such a tiny amount goes to the surgeon. That surgeon – who was best in their class mind you – is doing ok but not great. It’s a 3-4 hour surgery and their hours suggest they are making between two and four hundred dollars an hour all told. That optho, in the same hour, made about 35,000. They can easily get in 7 procedures an hour, each one making more than a bypass.
I have had two cardiovascular surgeons in my area go bankrupt. I have two ophthalmologists that lives in Vaquero, a country club area that requires a million-dollar buy-in before buying a villa there. Their income is easily between 3 and 5 million a year. In one procedure they make more than I do in a day, in an hour they make more than I do in a week, in a day more than I make in six months. They have high overhead. So do I. They worked hard in school to get into med school. Me too. They worked hard in med school to get that lucrative spot – so did I. I am family medicine by choice, not default. I was 38th in my class out of 200 and had the single highest grade average in third year in my med school’s history. I get ophthalmology is difficult, important, and lucrative. Should it be a literal 10 times more lucrative than family medicine? Three to five times more than cardiovascular surgery? Not even close. Change is at minimum a decade overdue here.
The other culprit? Hospitals. Hospital care costs a huge proportion of Medicare’s dollar – although difficult to ascertain let’s say 80%, with a paltry 20 going to the rest of us. My biggest beef is with the “not for profit” hospital scam. I am near a not for profit – and I assure you they are all about the profit. They take so so much money, make so much money. So they pay for my competition (hospital owned family medicine clinics that run at a loss, have huge advertising budgets, etc.) They run at that loss because they are encouraged, with whips and chains, to refer to their hospital physicians and use their hospital system. I am in the DFW metroplex. The last I heard this statistic there were 62 hospitals in the metroplex – servicing a population of sub 4 million. Manhattan, which had at its peak 10 million population and now has about 8- has ten hospitals.
So how can ten hospitals adequately care for so many? Some would say that it is distance – Texas is so much more spread out. But no, we have fancy vans with flashing lights that get around pretty fast. The truth is so much darker. These “not for profit” scam shells make so much money – hundreds of millions in profit every year despite obscene payouts of executives and funding my competition – they make so much money and have no shareholders to payout to. So they go to some craphole tiny town in Texas and build a gleaming beautiful hospital. They operate at a loss for a few years (which they need to offset the profits) and then eventually even if it makes money. They then go to a more spectacular craphole and build another one.
We don’t need 62 hospitals in the metroplex. Not even half that. Yes, I am suggesting that we close half the hospitals. How to pick? Easy. Look at the hospital. If it has three plus eras of architecture, six different but slightly matching bricks, and a map is needed to get around meandering halls – that is a real hospital and it stays. If you cannot tell if you are in a Hilton or a Hospital, it goes.
So – if I was king of the world, and I am not, ophtho and hospitals should be nervous. Cue the angry responses.
https://www.statista.com/statistics/268826/health-expenditure-as-gdp-percentage-in-oecd-countries/
Manhattan did not peak at10 million population and does not now have about 8. New York city has a population of about 8 million, but Manhattan is only one borough of five in NYC. The current population is only about 1.6 million.
Thanks for the clarification. My large error.
My dad was an ophthalmologist beginning in private practice in 1971. He did very well for a long time – and saw a hell of a lot of people in our rural area for free – but despite continuing to work full-time including surgery, saw about a 50% decrease in his reimbursements with annual increases in overhead.
A large part if this is that CMS/Medicare/AMA et al ad nauseum should not exist and certainly had no business in determining payment. My dad’s generation were the original guilty party that allowed ICD’s, CPT’s, and the whole rotten government medicine entitlement mindset to become cemented into an ignorant society. And since no one will allow Medicare to be phased out, and since Big Insurance follows the prime rate set by CMS, there will be no free market fix, and everyone will continue to get poorer. The smart medical students are the ones who plan for minimal debt, minimal time in, and an alternate way to make a living. And then, there are the rest of us …
I appreciate you writing about the incentives in payment of physician services. I don’t agree with your recommendations because they are based upon the assumption that someone has to gain and someone has to lose. This is because we docs remain submissive to the idea that there is a limited pie of money for the productivity we provide. The answer here is to leave the price trapped scheme of RVU’s and a committee of 16 deciding the market. The real answer is a free market health care system. No one in medicine (with rare exception) can fathom this concept because we have been brainwashed from infancy that health care is a right and governed. That is the fallacy of all times.
I turned down dental school in 1968 in favor of starting med school (bad decision) and then chose the up-and-coming new “specialty,” ‘family practice” as it was called in those days (bad decision #2)…but in the early 1970s, before insurance dug its roots into our profession more deeply, there wasn’t much difference among doctors’ salaries/earnings…You went into what attracted you. I like the “whole patient” but didn’t realize when I was a resident that I’d end up treating practically nothing but colds and depression and mild muscle pain and overweight diabetics ad nauseam…Back to the original post, one of the reasons our healthcare spending is so high is that few people in the USA take care of themselves and go to doctors and urgent care midlevels for everything under the sun.
Exactly right.
PLEASE ACCEPT THIS CORRECTION AS YOU ARE INDICTING A SPECIALTY WITH INCORRECT AND OUTDATED INFORMATION. I may be the only ophthalmologist on this blog but I do take offense. I am a little bit older than you- I started in private practice in ophthalmology in 1983. In those days, insurance companies- and there were only a few big players with limited offerings, reimbursed doctors according to “usual, customary, and reasonable” fees. For perhaps the first 10 years of my practice, the actual cataract surgery procedure was very lucrative. I am in Florida, and there were ads from docs in California offering to fly patients on public transport to their offices for cataract surgery while here in Florida limo services were offered. OBVIOUSLY TOO MUCH FAT IN THE SYSTEM. As I understand it, Dr Hsaio worked for Congress/Medicare to reform the whole payment structure and this was gradually phased in. I do not understand all the components that were considered but somehow the reimbursers wanted to deal with all doctors equitably- that was their goal. So they considered for every CPT code, the overhead involved, the time involved, the technical and cognitive difficulty, etc,etc. So today I am reimbursed by my local Medicare carrier $533.81 for a cataract operation that takes 15 minutes………I originally got about $2500 for a procedure that took an hour and included a couple of hospital visits- pts spent 1-2 days after surgery in the hospital in those days. Now please let me enlighten you that the surgical fee includes the preop visit with review of a 10 page informed consent that needs to be initialed on every page, review of preop instructions, calling in meds, obtaining any preauthorizations, scheduling with the surgery center- let’s say 30 minutes of work. Then this involves me driving to the surgery center and back home- and dealing with OR personnel and turnover times, etc. Then I am responsible for the postop care for the next 90 DAYS!!!! If these lonely seniors call and report anything funny with their operated eye, it is a free ride! I would venture to say that $533.81 is reaching the break even point- I have seen many patients with unrealistic expectations who are just not worth this level of reimbursal. Now we all know that there are ways to make money outside of Medicare. I can sell a patient glasses for example.
And a much more lucrative avenue is to push noncovered surgical services…….we have laser assisted cataract surgery where we explain to the patient that we can open the anterior lens capsule with a sharp instrument or use or more highly refined laser. The laser costs $500K to purchase plus maintenance of 100K/yr, there is a per patient user fee, it is not covered by insurance, and the patient typically pays the surgeon an additional $1000 by cash/check/credit card- this is patient choice as they are guided by the physician. (Funny thing is that this is slowly falling out of favor as the surgery center only has one laser and it can slow the surgical traffic down and there are easier ways to get those extra bucks.) We now have access to premium intraocular lenses. So the patient is told they can get the regular lens approved by Medicare or one of the new more highly advanced lenses that can run the total fee per eye up to $5000 in hopes of gaining full spectacle independence- you got that- that means they will never need glasses for the rest of their lives!!! (But of course the results of surgery are never guaranteed). Nor is there any guarantee that the patient may develop macular degeneration and actually lose their vision. So now we have some wealthy baby boomers who understand that Medicare is really just designed for the common man, and they think if they pay more they will get more. These are the same people who lined up for refractive surgery- basically a cosmetic procedure to reshape the cornea using advanced technology- computer guided lasers. Let me just say that many of these docs are superb businessmen with overheads of 80% who run assembly line medicine with large marketing campaigns who are basically selling the patient a bill of goods. A new solo ophthalmologist would never be able to start something like this from the ground up and an old dinosaur like me will soon be exiting my career without ever demeaning myself by essentially “tricking” a patient into paying me more with the expectation that they are receiving “better” care.
The fight between cognitive and procedural specialties has been going on forever. I cannot tell you how many times I am told by a cohort that they are paying us surgeons so little that it cannot get any lower- and it does- so now it is almost more cost effective for us to advise the patient to put off surgery- based on our interest! Unless we have some devious way to increase our income- sell vitamins, etc…..
I would hope that we did not become physicians to become rich. In my day everybody wanted to go into RADS- now they are planning to have computers read Xrays, anesthesiologists have to deal with CRNA’s and we even have a local university pumping out anesthesia techs- whatever that is, and local PE run derm clinics are staffed by PA’s with no MD in sight. What about ER medicine- what if you lose your contract or the administration sets you up with a staff of PA’s who know nothing but cost less than an adequate MD staff? You have to pick a specialty which meshes with your natural talents and which you genuinely like, the hell with the money. Or maybe just do orthopedics dead on for 10-15 years and then retire???? I am sure we have all seen doctors who chose the wrong specialty- AND THAT IS VERY SAD!
Why did the cardiovascular surgeons you mention go bankrupt? Here in Florida we would need them as we do neurosurgeons but with their malpractice and minimal pay for delicate brain surgery, they have left the state.
To give any referrals for these highly trained specialists who are in short supply, i turf the patient to the university 3 hours away. And that is how the future will be. First aid and urgent care clinics in rural areas, megahospital networks in urban areas. Until the system collapses.
I agree with everything you state about hospitals
But what about Big Pharma, and PE companies……capitalism has gone mad!
Please don’t rat me out to my fellow ophthalmologists. If they can look themselves in the mirror every morning, so be it.
I pity the pediatric ophthalmologist who has to deal with screaming infants and keeping patches on amblyopes-also pity the “medical ophthalmologists” who are the surgical ophthalmologist wannabes but are cutting a fine line and may be replaced by optometrists….don’t get me going on them!
KARMA
“The fight between cognitive and procedural specialties has been going on forever”
It really didn’t become a big issue until 1991, when the AMA set up the RUC and dramatically and deliberately devalued cognitive work. It’s been downhill for primary care ever since.
An easy way to address some of this imbalance would be to take the so-called “facility fees” – which can now be $300-400 for a simple office visit – and distribute those funds among the underpaid specialties.
But ain’t gonna happen . . .
Thanks for your thoughtful reply. I am amenable to the facts. The aftercare, global fees, preop forms are universal to all surgical specialties. I get the intense overhead of ophthalmology. The 2 hour surgery was in 1995. In mid 2000s I saw a production – gurneys lined up, the entire procedure was 7-8 minutes. My point is not that they are doing something wrong. My point is that the scale is so far off. I disagree with one thing you said – one of the big reasons I went into medicine was to get rich. I grew up extremely poor and never wanted to scrimp and be overdrawn and worry about money. I do. A lot. Right now given a 70 hour work week I make 95 dollars an hour. I would make so much more as an electrician. My opthos are making 10 times what I make. It is a problem. My ct surgeons were used to three cabg surgeries 3 days a week. A combination of heart specific hospitals across town, statins and smaller stents requiring fewer bypasses, and fatigue caused them to quit. They made 750k a year and didn’t like making 500. Last beef – the ability for doctors to have real meaningful conversations about cost and income is needed. The government has stated we cannot unionize and conversations like this are an anti-trust violation and are price fixing. But hospitals can do it with impunity. As can insurance companies. So – here goes – I charge 100 dollars for a cash visit 99213. I am now in violation of law. I welcome the justice department arresting me as I could use the break.
Great points Ken.
No wonder my uncle, a thoracic surgery, told me to go into ophthalmology. Usually his advice was accompanied by a pantomime of the minimal hand motion needed to do a cataract operation.
Please tell me what year this was. Ophthalmology has changed a lot during my 40 year career. You could easily do very well with just insurance/Medicare in the beginning……now we are just like cosmetic surgeons-trying to collect as much as possible directly from the patient since insurance pays so poorly. The same goes for dentistry…..for some reason when I get a cavity at my age, it is always beneath the gum line, so that means extraction and a dental implant. His income is 10 times mine!