Whenever we start talking about the increase in health care costs we invariably start to think about the amount of money made by the providers. The costs of paying the providers make up 30% of the cost of care so it’s pretty easy to make them a target.
Medscape WebMD recently published their Physician Compensation Report for 2011. It paints a pretty interesting picture of the current economics of the general provider community.
Overall, the average “salary” for the 15,794 physicians across 22 specialty areas averaged somewhere around $250,000 a year. Orthopedic Surgery and Radiology did the best at around $350,000 and Primary Care and Pediatrics received the least at slightly under $200,000 per year.
About half of the respondents indicated their income “remained the same” between the years 200
9-2010, but more indicated their incomes increased than decreased during this time.
Those in the North Central U.S. averaged the most ($225,000) and those in the Southwest and Northeast averaged the least ($190,000).
All respondents felt they should be earning more and less than half of the Primary Care practitioners felt they are currently fairly compensated for their efforts.
They all work a lot of hours and spend way too much time on paperwork and non-patient administration.
Almost a third are not so sure they would choose medicine as a career if they had to do it all again. They would either go into business, law, or teach.
When looking at the pure numbers we need to remember these amounts don’t include the general costs of education, general overhead, malpractice insurance, staffing, and all the other costs that we require providers to assume as a part of participating in the health care system we have created.
The question isn’t really “how much” but what is the value? That is the challenge we just haven’t been able to determine very well.
So, before we look only to putting some arbitrary limits on the fees paid to providers as the sole way to control costs we should first look at the ways we can measure and improve the value of the dollars that are being spent; more electronic technology, accessing best-practices, reducing administrative nonsense, and creating more informed consumers come to mind. And, providers need to be accountable for the value they provide, just like we’re expecting other stakeholders to be accountable in their new roles as well. Providers can’t just do whatever they want any more and expect someone else to pick up the tab.
Princeton economist Uwe Reinheardt estimated that if you cut physician income across the board by 20% you would only shave 2% off national health spending. That’s not a very big dent.
While health care spending is a problem, how we’re spending the money is an even bigger one.
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