And Gives an Insight into the Economics of Physician Care
The Incidental Economist, despite it unusual name, is a great Forum that is devoted to health care in general and health care economics in particular. One of it very good contributors, Aaron Carroll comments on a Wall Street Journal article on how a medical practice near Denver made only a $29,000 profit, and is struggling to come up with the capital needed to improve services and qualify for additional payments from insurance companies.
The new reimbursement designs also can offer doctors significant financial rewards if they hit quality goals and reduce costs.
But to effect these changes, doctors often must make a major financial commitment. That means upgrading their information-technology systems, adding support staff and getting special training to do the kind of outreach and coordination that make a practice a "medical home."
Immediately evident is that the story omits the salaries that the practicing physicians take home, so we don’t know whether or not these doctors are making $50,000 a year or $500,000 a year or more or less. And Aaron, who is a physician himself does not spare the criticism for a profession which complains about its economics while at the same time making a large amount of money
Every time I see a piece in the media about doctors complaining about money, I cringe. What the article fails to mention is that the clinic is “struggling” because it’s also likely paying its physicians a nice six-figure salary. There seems to be this feeling that many (not all) doctors share that they are “entitled” to large salaries. Yes, they have a high cost of education, and yes, the years of training they had to go through is extreme. But still, when your nice six-figure salary becomes a slightly lower six-figure salary, you don’t get to go around complaining that you’re “struggling to make ends meet”. It’s sad for you. It’s going to make your lifestyle a little less awesome, likely. I’m not unsympathetic. But consider your audience.
But the real value of this piece is this commentary here by Aaron.
But back to the article. It reports that some doctors are choosing to go work for hospitals or large groups, with the necessary infrastructure in place. That’s sad for those who like to be in private practice, but again – that’s not “struggling to make ends meet”. It’s a changing marketplace altering the way medicine is practiced. It happens in lots of fields.
And while Aaron sees this as a negative, economics sees this as a positive. Physicians should be doctors, they should not be businessmen and businesswomen. They should be salaried employees of a hospital or large self contained health care provider unit. The fee for service model is a major part of the health care model in the
, a major reason why our health care costs are significantly more than any other countries, with the health care itself being significantly less than many major countries. United States
So this trend is a positive one. Let practices be acquired by hospitals and health insurers. Let doctors receive a base salary as compensation. And most of all, let’s let doctors get on with the business of health care, and not be consumed or even diverted by the health care business.