Thursday, April 17, 2014

The Insidiously Steady Income Of Doctors

Many people are attracted by the perceived stability of doctors' incomes. Year in and year out people get sick so doctors will always have jobs, right? By contrast lawyers are beset by an oversupply due to law school greed and technology advancement. Wall Street bankers can suffer a massive hemorrhage of jobs during bear markets in stocks. But parents encourage their kids to become doctors so that they will have peace of mind and not worry that their offsprings will want their old bedrooms back after graduation.

But is the stable income of physicians illusory? What if people really understood the truth about how poorly physicians have been doing? As the just released Medscape physician compensation report showed, anesthesiologists' incomes were unchanged last year from the year before. If you look through the entire report, you'll see that almost all physicians showed little growth in their earnings last year save for a few primary care fields that had single digit increases due to raises in reimbursements specified by Obamacare.

In the meantime, doctors will just have to satisfy themselves with another 0.5% increase in Medicare reimbursements that was voted by Congress as part of another temporary doc fix before a permanent solution to the SGR problem can be found. However, the SGR patch is good for twelve months while the Medicare raise is only good until the end of the year. Therefore during the first four months of next year, doctors will once again have zero chance of getting more money from the government.

While a 0.5% increase may sound better than nothing, it is in fact not an increase at all, but a step backwards. The U.S. Federal Reserve has set a target of two percent as the goal for consumer inflation. Therefore a 0.5% increase is actually a 1.5% decrease in inflation adjusted wages. As a report in JAMA pointed out, between 1996 and 2006 physician income remained stable nominally, but actually fell 25% after adjusting for inflation. At the same time, our own government is predicting that medical inflation will increase at an annual rate of 5.8% for the next ten years.

So how do these number affect doctors? Here is a graph showing price increases for ten years starting from a base of $1.00 today. Medical inflation increasing each year at 5.8% for a decade clearly demonstrates prices zooming up and away. In ten years, you'll need $1.76 for the same $1.00 purchase today. Consumer inflation at 2% shows a more modest growth, with a price reaching up to $1.22 after a decade. Doctors incomes, if we continue to get an annual 0.5% raise in Medicare reimbursements, will only reach $1.05 in ten years. If the SGR fix that barely failed in Congress had been implemented, it would have called for an increase of 0.5% per year for only the first five years followed by a pay freeze for the next five. Doctors in that scenario would receive $1.03 for what is worth $1.00 today. Therefore after ten years, a doctor's income would fall by twenty percent when compared to consumer inflation and nearly half when up against medical inflation.

And everybody knows that the consumer price index as measured by the government is artificially kept low because they take out two of the basic necessities of life: food and fuel. Gasoline prices ten years ago in California were barely above $2 per gallon. Today it is over $4. It is not unreasonable to expect prices to double again in ten years to $8 per gallon, especially as the environmental lobbyists continue to flex their substantial muscles in the California legislature to prevent any further drilling for oil.

Other basics of daily life, including utilities and insurance, are unlikely to rise only two percent per year. Office employees are also probably not going to accept such small annual raises. When Social Security raised its cost of living adjustments by 1.5% this year, howls of protest could be heard emanating from nursing homes across the country. Thus one will be unlikely to find good employees without raises that at least keeps up with inflation, even if the physician/owner does not get any himself.

So one can judge for himself whether having a "stable" income is really such a good thing. Sure the number look impressive. But those same numbers two to three decades ago permitted doctors to buy medical office buildings and rental properties in Beverly Hills. Today's doctors can barely afford a single family home on the Westside of Los Angeles. In another twenty years, perhaps they will have to give subsidized housing to physicians so that they can afford to live close to their hospitals for emergency cases. That's what all this nickel and diming in Congress has done to the downtrodden medical profession.

Wednesday, April 16, 2014

Anesthesiology Compensation 2014. Same Old Same Old

Here we go again, the latest physician compensation report from Medscape. I was once again one of over 24,000 doctors who filled out the survey that Medscape emailed out. Unfortunately, just like last year, I didn't win the iPad Mini for taking ten minutes to answer all the questions. Curse you Medscape.

Let's get right to the point here. Anesthesiologists reported a ZERO change in compensation last year. Nada. A big fat goose egg. On average anesthesiologists made $338,000, the same as the year before. That put the field in sixth place behind Orthopedics, Cardiology, Urology, Gastroenterology, and Radiology. Following close behind are Plastic Surgery, Dermatology, General Surgery, and Ophthalmology. Once again the ROAD specialties are well represented in the top echelons of physician incomes. At the bottom of the list are the usual primary care fields: Infectious Disease, Family Medicine, Pediatrics, Endocrinology, and Internal Medicine.

Male anesthesiologists made much more than female colleagues, $350,000 to $295,000. And that has nothing to do with female wage discrimination. From personal experience, male doctors work their butts off while the women tend to work shorter days or part time. So don't go spouting liberal Democrat propaganda on me.

The sections of the country with the highest salaries were in the North Central and South Central states. The least generous compensation was in the Pacific Northwest, followed by the West and the Northeast. Coincidentally or not, the highest paying regions also happen to be where the economies are the strongest due to increased oil drilling activity. Hmm. You think there's a link there somewhere? Maybe doctors should advocate more oil fracking as a matter of self preservation.

Overall, fifty percent of anesthesiologists were satisfied with their jobs, with 54% content with their income and 48% who said they would choose the same specialty if they had to start over again. That compares to an appalling 27% of IM and 32% of FM who would choose their line of work again.

Anesthesiologists also happen to spend the most amount of time seeing patients. Nearly eighty percent said they saw patients at least forty hours per week. That is actually a good thing since we get paid based partly on the amount of time we are treating patients. By comparison, only 27% of dermatologists saw patients for more than forty hours. And they were number eight in total compensation of $308,000. Again, that's part of the allure of ROAD.

This report is the last one that can be compared directly with previous years. From here on out the shadow of Obamacare will loom large in the compensation of physicians. To what extent won't be known until the next few years' worth of survey results are in. Until then, anesthesiologists better enjoy the good thing they have going right now.

The Lego Movie As Inspiration For Obamacare's Job Loss Spin


Have you heard the news, everyone's talking
Life is good 'cause everything's awesome.
Lost my job, it's a new opportunity
More free time for my awesome community.

"Everything Is Awesome" from The Lego Movie

The Congressional Budget Office estimates that the Affordable Care Act aka Obamacare will cause employers to force more of their workers to work on a part time basis. This way they won't have to buy them health insurance as required by the ACA. This will result in the equivalent of a loss of two million jobs.

How does the White House spin this abysmal statistic? It takes a cue from The Lego Movie, which was released the same week the CBO released this bombshell data. They claim the ACA will allow people to choose to work less and spend more time with their families because they will still have health insurance. Says White House press secretary Jay Carney, "individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families."

I would think that people want to work longer and harder when they are young so that they can retire on time or early. But I guess if you are taking inspiration from a toy marketing movie, logical thinking isn't high on your priority list.

Tuesday, April 15, 2014

Anesthesiologists Will Work For Cheap

The ASA has regularly, loudly, and up to now, ineffectively complained about Medicare's inequitable treatment of anesthesiologists. While other medical specialties receive Medicare reimbursements that are typically about 80% that of private insurance, anesthesiologists receive only about one third what insurance would bring us. This payment disparity is apparent in the just released Medicare doc pay database and it couldn't be more stark or disheartening.

Bloomberg organized by specialty the Medicare reimbursements received by doctors. It then ranked the specialties by the total payments received. Not surprisingly, primary care fields topped the list of most money reimbursed by Medicare. What I found more interesting was the amount given per participating physician in each specialty. According to this categorization, anesthesiologists were the second lowest paid physicians by Medicare in 2012, with a per doctor payment of $27,931. Anesthesiologists came in just above the basement occupied by OB/GYN who each received $13,515. Since Medicare is mainly health insurance for the elderly and disabled, there aren't many expensive deliveries being performed in that cohort.

Anesthesiologists raked in less money than non MD's like speech pathologists ($36,615) and physical therapists ($49,064). We rank just above occupations like optometrists ($26,667) and clinical psychologists ($24,420). Physicians that are closest to anesthesiologists in this hall of shame are pediatricians ($31,319) and psychiatrists ($33,853). By comparison ophthalmologists and oncologists each pulled in over $300,000 per physician that year.

CRNA's faired surprisingly poorly with Medicare reimbursements. They averaged only $12,587 per anesthetist in 2012. Whether that is because they take care of younger and healthier patients than anesthesiologists is hard to say.

Another interesting nugget of information from this list is that only 32,641 anesthesiologists participated in the Medicare program in 2012. The ASA tells us that there are over 45,000 anesthesiologists actively practicing in the U.S. So why are only two thirds of them accepting Medicare? Do they practice in ASC's that don't accept Medicare patients? Do they refuse to accept Medicare into their personal practice? Is this some sort of covert resistance movement against a government that unfairly undervalues our services?

So next time your surgeon ($48,655) complains about how little he is making from Medicare for doing another midnight acute abdomen, just tell him you too can feel his pain.

Saturday, April 12, 2014

Anesthesia Menu Board

In this era of consumer empowerment, people are encouraged to shop around for the best prices. This includes finding the lowest prices for medical care. Unfortunately it is practically impossible for patients to get this kind of data accurately. It is highly variable with a multitude of factors that will affect the final charges. Considerations such as the contract a doctor's group or hospital has negotiated with the insurance company, geographic location of the procedure, the individual's copay and deductibles, and many, many others will ultimately affect what the patient will get in the mail.

Judging by the responses I've gotten from my post about Medicare reimbursements, it appears that most doctors are in the same predicament as their patients when it comes to pricing for our services. We ourselves have almost no clue how much the our patients will have to pay when they come to the hospital. However, with the release of the Medicare physician payments database, it can serve as a good guideline for what doctors can expect to receive for a procedure. Since Medicare is a federal program, the payments should be fairly consistent across the country for a given procedure, give or take a few percentages for geographic variability.

I've taken upon myself to compile a small list of anesthesia services that I randomly chose out of the Medicare database. I've put it into a menu board format so that it will look familiar to anybody who has ever entered a fast food restaurant.

This list is by no means comprehensive. The procedure names may sound vague but they are straight out of the database, not my own words. The prices can also be highly variable depending on things like length of a case and the ASA factor of the patient. These prices also reflect only Medicare prices. Since Medicare severely underprices anesthesia services, private insurance may pay two to three times more to anesthesiologists than what is shown here. If the patient has Medicaid, you are SOL. Medicaid usually pays even less than Medicare, averaging two thirds of Medicare's payments. My state of California pays the least amount in the whole country, with its MediCal program reimbursing only about half the normal Medicare fees.

So next time a patient asks you how much your services are going to cost, you can just grab a copy of this menu board out of your pocket and give a ball park answer. It may not be accurate down to the penny, but at least it will be closer to the actual cost than a random guess like $500 for an arterial line.

Thursday, April 10, 2014

Doctors Should Get Kudos For Accepting Medicare Patients

The government's release yesterday of Medicare payment data has predictably raised an uproar among the public. The conflagration is also being fanned by a media that only sees all the zeroes in the reimbursements but don't care to dig a little deeper into the numbers to understand where all the money is going. Hint: it's not into the doctors' pockets.

While the news concentrates on the witch hunt for doctors who are supposedly raking in millions of dollars from the taxpayers, the CMS database is actually a lot more useful to illustrate how LITTLE doctors make from taking care of our elderly. We should be receiving accolades for how little money we get for treating our nation's grandmothers and grandfathers instead getting smeared with innuendo about our integrity.

If you go to the CMS website, you can download the data that comprise the payment amounts to doctors. The downloads are aggregated by alphabetical order of the physicians' names. Even then each Excel spreadsheet is several megabytes in size. You'll have to be very patient if you have a slow internet connection and an old computer. I loaded just a couple of databases, including the one with my name in it, just to see what kind of information the government is releasing about me to prying eyes. What it tells me is that we are all suckers for accepting such a pittance for Medicare reimbursements.

I only looked at payments related to anesthetic procedures. The horror story is true for all physicians but anesthesiologists already know we receive far less from Medicare as a percentage of private insurance compensation compared to other doctors. This makes the pain of taking Medicare patients particularly acute for anesthesiologists. Since anesthesiologists usually work in a hospital setting, we are all obligated to take these patients whether it makes financial sense or not.

The following is a list of procedures performed and billed by anesthesiologists that I randomly pulled from the spreadsheets to illustrate how little money they made from the program. The first column is the average amount they charged for the procedure while the second column is the average they received from Medicare.

As you can see, anesthesiologists barely make back ten cents on the dollar for interventions that have life and death consequences. Only $99 for an emergency intubation? That is somebody's life on the line. If we failed and the patient dies, or worse suffers anoxic brain injury, that $99 wouldn't even cover the lawyer's lunch bill. A brachial plexus block for only $48? It take at least twelve years of education after high school and thousands of hours of training to be able to confidently and successfully place a block. For all that hard work we don't get paid enough to take a family out to see a movie? If there is nerve injury or a catastrophic complication, that $48 suddenly doesn't seem worth the risks.

The worse news for anesthesiologists though, if it could possibly get worse, is that our reimbursements from Medicare aren't all that different from CRNA's who bill for the same procedures. Again here is just a quick random sampling of the spreadsheet. The amounts that are reimbursed are determined by complicated formulas that is beyond my scope to explain here. This tiny sample does not imply an overall trend, which will require analysis of thousands of numbers for which I'm not getting paid enough to do, as in zero.

Notice how CRNA's make nearly as much money as anesthesiologists, give or take a few dollars? Data like this along with the government's lovefest with nurse anesthetists could make medical students start having second thoughts about going into anesthesiology.

If you think these number look bad, wait until millions of patients start arriving at the hospital doorsteps with their new Obamacare insurance plans. Those reimburse at Medicaid rates, which is even lower than Medicare if that is even possible. Doctors need to show their patients and the media these numbers, not hide from them as if we have something to be ashamed of. If the amount of money we get paid for performing life saving procedures isn't enough to even get a plumber to come to your house to look at your stopped toilet, there is something wrong with the system. And Congress's and the AMA's only solution is to prolong the pain.

Wednesday, April 9, 2014

Do 345 Doctors=1 Geek?

Well if this isn't a slap in the face and a freezing cold splash of reality for anybody who works in healthcare. Sheridan Healthcare, the physician outsourcing company has announced that it is seeking an initial public offering. Sheridan is one of the largest multispecialty physician group in the country, employing over 2,000 doctors in 25 states. It has been on a tear acquiring medical groups left and right. For such a large corporation, the company is seeking a relatively modest valuation of $2 billion for its IPO.

By contrast, Facebook made headlines worldwide when it announced the acquisition of WhatsApp in February for $19 billion. This is a phone app that allows people to text and send each other cat pictures for free, like a multitude of other text apps available for iOS and Android. WhatsApp has almost no revenue and employs just 55 employees.

So let's work out the math. Two billion dollars for over 2,000 doctors equals under $1 million per doctor. Much less if you subtract out the value of all the non-physician employees and company assets. WhatsApp's valuation is $19 billion divided by 55 employees or over $345 million per employee. Three hundred forty-five to one. Doesn't sound quite fair does it?

The market is telling us it values people who allow others to waste their time texting 345 times greater than a person who helps others attain and maintain their health. One company wastes a person's productivity while the other helps a person get back into society as a productive citizen. One company barely requires a college education to be successful while the other needs hundreds of thousands of dollars in student loans and at least twelve years of one's life in servitude before making any actual money and starting a life.

But of course the stock market would value the two companies differently. Healthcare is considered a burden on society. Its only feature is to make people poorer for what should be a universal right that nobody should have to pay a dime. A phone app can reach billions of people around the world and all those eyeballs can be worth a lot of money to advertisers. People willingly pay real money for that.

Is it any wonder that nerds get gourmet food and company gyms for free while we have to sneak lunch into the operating room to keep from fainting from hypoglycemia? Any young person able to write five lines of code would be crazy to want to go into medicine. The cost/benefit calculus barely works for medical schools and private practice anymore. Doctors are the leeches that are sucking the life out of America while the nerds will ride in on their white iPhones to set the country free. Ooh, I like that. Let me put that on my Facebook page.