Doctors’ Fees May be Target of Cuts

A new study published in the September issue of Health Affairs shows that U.S. physicians are paid far more per service, in some cases twice as much, than their counterparts in other countries.

The research shows that these fees, not practice costs, drive higher healthcare spending on physicians. These findings, the researchers say, could encourage policymakers to target physician fees as a way to reap desired savings in healthcare.

The researchers compared fees paid by public and private insurers for primary care office visits and hip replacements in the United States to those in Australia, Canada, France, Germany and the United Kingdom.

The researchers found that:

  • On average, U.S. primary care physicians were paid 27 percent more by public payers for an office visit and 70 percent more by private payers for an office visit than physicians in the other five countries.
  • U.S. physicians were paid 70 percent more for hip replacements by public payers and 120 percent more by private insurers than the average in the other countries. Private insurance fees for hip replacements were nearly $4,000, about twice as high as the private rate in any of the other countries.
  • U.S. orthopedic surgeons’ pretax incomes, net of expenses, were $442,450, compared to $186,582 for primary care physicians.

“For decades, policy makers and medical leaders in this country have debated financial incentives to spur more doctors to become primary care physicians,” lead author Miriam Laugesen, assistant professor of health policy at Columbia University’s Mailman School of Public Health, said in a news release. “Our work shows that continuing attention needs to be paid to the difference in payments across specialties, and how we can get better value for those expenditures.”

Laugesen’s co-author is Sherry A. Glied, assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services.

U.S. physicians’ incomes were well above their counterparts in other countries, the researchers found. Orthopedic surgeons’ income ranged from $154,380 to $324,138 in the other countries, while primary care physicians’ income ranged from $92,844 to $159,532.

Dr. F. Dean Griffen, president of the Louisiana State Medical Society, said he doesn’t think the spendable income that U.S. physicians make is disproportionate to that of doctors in other countries.

The Health Affairs article appears to imply that the United States is wasting a lot of money on physician fees, Griffen said. But only around 20 percent of U.S. healthcare spending goes to physicians, while the remainder goes to other healthcare entities.

“I don’t think the reason that healthcare is disproportionately expensive is because of doctors,” Griffen said.

The United States’ approach to care and the healthcare system differ from other countries, he said, and that allows other nations to further stretch their healthcare dollars.

For example, if a European patient goes to a hospital weakened and deconditioned, he goes home with instructions on how to get back on his feet instead of getting rehabilitative services, home healthcare, physical therapy or three weeks in an extended care facility, Griffen said.

“You go home and your family sucks it up and gets you going, or not, depending on what kind of family you have,” Griffen said.

Griffen said he’s not sure the study does enough to account for the differences in the business climate for U.S. physicians versus that of their counterparts.

“I don’t question the facts that they report. I question the expense of operating a physician’s business (here) compared to Switzerland or wherever,” Griffen said.

In the United States, as much as 30 percent of a physician’s income might go for professional liability insurance, Griffen said. In many countries, there’s basically no liability so doctors in those nations have much lower professional liability costs.

An article published in the August issue of Health Affairs says that U.S. physicians spend four times more than Canadian physicians on their interactions with insurers, Griffen said. This is just another example that the cost of doing business in America is higher than in other countries.

A physician in Europe might have zero overall expenses because he or she is working for the state or some other entity, Griffen said. Increasingly, doctors here aren’t working for themselves because the cost of doing business is so great.

Before Griffen became a professor of clinical surgery at LSU Health Science Center – Shreveport, he worked at a multi-specialty clinic in Shreveport for 35 years.

The clinic’s four-man pediatric group ultimately left for a hospital because overhead costs escalated so much that the doctors were barely breaking even, Griffen said. The pediatricians joined a hospital system, which uses their business to generate revenue from ancillary services, such as laboratory tests.

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