Posted on May 18, 2014 in
Articles 
The Article: Why Primary Care Physicians Need a Minimum Wage by Daniela Drake in The Daily Beast.
The Text: While we entertain the idea of increasing the minimum wage, letâs not forget doctors who also need a pay bump. Yes, doctorsâprimary care physicians (PCPs) who are receiving only a tiny fraction of all that money youâre now forced to fork over for health insurance.
To wit, the health insurance calculator for Southern California says a 62-year-old would pay $7,200 a year for the top plan. Most people resent paying this big a fee for something like insuranceâand itâs easy to see why patients can be manipulated into thinking their doctor is being overpaid.
However, the math is simple. The average PCP has 2,500 patients and supposedly makes $180,000 a year. Therefore, the insurer is paying your primary care doctor $72 a year per patientâout of the $7,200 a year paid to the insurer. Thatâs 1% of the insurance premium. It works out to $6 a month (19.7 cents a day!) to have a highly trained professional overseeing your care.
We happily pay more for Netflix and consider it one of the best values around. Is your doctor worth less?
Even if you quibble with these numbers, consider that physician temp jobs pay $70 to $80 per hourâand doctors will see four patients an hour. That works out to $17.50 per visit, less than most co-pays. (Therefore, in many cases the insurer pays the physician nothing out of your insurance premium.) As for the $17.50 for the physicianâthatâs about $10 after taxes.
Given the amount of work that primary care doctors do, itâs simply inadequate compensation. And it shows. Physicians feel overworked and patients feel âunder served.â So much so that plenty of patients are seeking out concierge physiciansâand voluntarily paying extra cashâjust to have an attentive doctor. If we continue this way, we run the very serious risk of having a two-tiered health care systemâand anyone unable to pay cash will receive increasingly substandard care.
A recent Vox article, which calls to reduce doctor pay, struck many physicians as particularly off the mark. The article reported that physician salaries account for 56% of total health care spending (when itâs really more like 10%). It turns out, according to Vox, that all health care salaries account for 56% of spendingâincluding nurses, techs, and presumably administrators, who are also known to make $180,000 a year and occasionally into the tens of millions.
A belated correction was issued on the blog.
But how can a mistake like that be made? Is it because everyone thinks doctors are getting away with something? Over 9 million U.S. households earn more than $150,000 a year, and physicians make up less than 10% of those. Some police officers make $150,000. Members of the San Francisco Symphony orchestra make $160,000 a year. College administrators can make $200,000 to $300,000 annually. Even public school administrators can make over $200,000. First-year consultants can make $190,000. And nurses can make almost as much as a primary care physicianâyet we never hear a call to reduce their salaries. It just wouldnât sell.
Alas, the âgreedyâ doctor is an easy target.
But letâs consider the $10 visit. Your doctor might lance, drain, and pack a boil, or maybe clean out your ears, remove a suspicious mole, perform a pap smear or rectal or breast exam, including palpating deep into your sweating armpits to check for lymph nodesâand yet he is somehow being overpaid? Your primary physician is always on the hook to interpret your labs and specialist reports, and send you a note explaining it all. He is there to refill your prescriptions and take your calls about some pharmaceutical ad or report in the news. When you have a good primary care physician, he is always there for you.
To have someone like that available for you at 19 cents a day would strike most people as a bargain.
Indeed, Princeton economist Uwe Reinhardt has argued cogently against physician salary reductions and for salary raises. âPhysicians collectively [earn] 20% of total health spending,â he wrote, âhalf is absorbed by practice expenses⊠physicianâs collective take-home pay [is] only about 10% of total national health spending.â
Reinhardt points out that physician pay is such a small fraction of health care expenses, it wouldnât do much good to cut it. In return weâd get âa wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy,â Reinhardt wrote. âA superior strategy might be to pay them very well for helping us reduce unwarranted health spending elsewhere.â
He might be on to something. Paying primary care physicians better could give them more time to support the lifestyle changes that keep patients out of hospitals. A physician who the patient trusts is not likely to order unnecessary tests because heâs afraid of being suedâand is less likely to order tests a patient requests but doesnât need. And these are two overriding drivers of health care costs, according to a 2007 McKinsey and Company study.
Of course, almost all American workers feel squeezed these days. But fair physician compensation matters to everyone because when the doctor is squeezed, the patient suffers. Physician-per-patient-pay is now far below what we could think of as a physicianâs minimum wageâwhich we could define as the level at which a doctor can no longer give good care. So when people argue to cut doctorsâ pay, itâs not for the good of the patient. Itâs for the good of hospital and insurance executives, disguised as an effort to save the economy.
And as physicians struggle to preserve fair pay, many people counter that health care is a right, implying that physician services should be completely free. But rather than argue about whether itâs a right, we might think of health care as a valued good that we should provide each other in a civilized society.
We have enough resources to deliver that valued goodâat least for primary care. Indeed, there are lots of things we can do to fix the primary care shortage, not the least of which is to permit nurse practitioners and medical assistants to practice independently. (And yes, they are good enough.) They don’t take medical assistant programs and learn about all things medical just to be taken lightly.
Naturally, there will be objectionsâbut usually theyâre little more than distractions. We could compare American doctorsâ incomes to doctorsâ incomes in the wholly dissimilar European economy, which physician-blogger Dr. Kevin Pho neatly rebuts in Pay Me like a French Doctor, You Know You Want To. Or we could talk about absolute salary size and quickly find ourselves fanning the destructive flames of class resentment. We could engage in thought experiments like whether healthcare spending is really a waste since these monies get recycled back into the economy. All are interestingâbut at this point, they arenât what truly matter.
What truly matters is this: What is good primary care worth? Itâs a fair bet that itâs a lot more than 19 cents a day.
