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Doctors’ Salaries; The Media Is The Message

 Stanley Feld M.D.,FACP,MACE   

 Physicians’ salaries are not the cause of the escalating healthcare costs.

The economic factors involved are complex.  The escalating costs result from cost shifting, government regulations and the lack of tort reform. The result is each stakeholder tries to optimize his stake in the dysfunctional healthcare system.

Further dysfunction occurs in reaction to the individual stakeholder’s attempts at optimization. The costs escalate.

The government permits insurance companies and hospital systems to calculate expenses and profits in strange ways.

Physicians’ socio-economic interests have the weakest representation in the healthcare ecosystem.  The lack of representation allows physicians to be the easiest stakeholders to blame for healthcare’s rising costs.  

As always the media is the message. The traditional print media are desperate to print anything that will capture the attention of the public and sell newspapers.

The Dallas newspaper published a story a few weeks ago titled “North Texas Medicare Millionaire Doctors.” and asks the public,

Is your doctor one of the 340 in Texas to make more than $1 million from Medicare?”



"More than 340 doctors and other care providers in Texas received over $1 million each in 2012 under the government’s Medicare health insurance program, according to data released Wednesday that provides the public its first inside look at physician billing practices."

CMS released the Medicare database to inform the public what physicians and physician groups are charging Medicare.

Doctors over 1 million dollars

The data reflects payments made by Medicare.

The data does not

  • reflect whether one physician identifier number is included in the billing for multiple providers.
  • reflect the charges and payment for a service.
  • reflect if it was physically possible for the individual named to perform all the services implied.

It lets the reader imagine that the providers “physicians” are crooks as well as a millionaires.

It then follows that most physicians must be crooks.

There is nothing to be learned from the data as presented. This data must go through many layers of dissection in order to mean anything.

However, “the media is the message” and the point was made.

The bad thing is many of these articles with their imbedded implied conclusions are written from press release information provided by the government. This is called "government induced disinformation."

Reality is much different. Physicians are the most highly trained workers in the healthcare system. Without patients and physicians a healthcare system would not exist. What is the individual physician’s salary? What is he/she worth? These questions are the real questions.

Physicians have seen their incomes fall, their clout with insurers shrink, and their practices weighed down by a plethora of new requirements.

Physicians are starting to wake up and realize that all this is the direct result of them being exploited by payers, hospitals, policymakers, government and other groups that have become more powerful than the medical profession.

The example of the disinformation generated by the implications of the millionaire physicians ripping off the public is just one example of this exploitation of the medical profession.

The other stakeholders are doing this to deflect attention from how they are ripping off the healthcare system.

‘That is because the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine.”

“The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for The New York Times by Compdata Surveys.”

The survey shows that the average salary for  

  • An insurance chief executive officer is $584,000
  • A hospital C.E.O. $386,000
  • A hospital administrator $237,000,
  • Compared to an surgeon  $306,000
  • And an average general doctor $185,000 .

  This is an interesting payment gap. These secondary stakeholders do not add value to direct patient care.

The salary gaps between secondary stakeholders get worse because these numbers represent only the average base salaries.

The basic question is what are these executives worth?

What encourages a board of directors of their organizations to award these high salaries?

What in the government tax structure and regulations encourage these high salaries?

“And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in non-salary compensation. 

Mark T. Bertolini, the chief executive of Aetna, earned a salary of about $977,000 in 2012 but a total compensation package of over $36 million, the bulk of it from stocks vested and options he exercised.

Ronald J. Del Mauro, a former president of Barnabas Health, a midsize health system in New Jersey, earned a salary of just $28,000 in 2012 the year he retired, but total compensation of $21.7 million.

 These two minor examples are appropriate. These are also low-end examples. There are many more.

 The Wellpoint and United examples are more stunning.

 Sources: Compdata Surveys (salaries); the Commonwealth Fund and the Organization for Economic Cooperation and Development (administrative costs)

Physicians are waking up. They are starting to step forward and are pointing out the real abuses in the healthcare system.  

“Doctors are beginning to push back: Last month, 75 doctors in northern Wisconsin took out an advertisement in The Wisconsin State Journal demanding widespread health reforms to lower prices, including penalizing hospitals for overbuilding and requiring that 95 percent of insurance premiums be used on medical care.

The movement was ignited when a surgeon, Dr. Hans Rechsteiner, discovered that a brief outpatient appendectomy he had performed for a fee of $1,700 generated over $12,000 in hospital bills, including $6,500 for operating room and recovery room charges.

Keith Smith M.D. in Oklahoma City has done it. His surgical center is doing surgery for 25-40% less than the typical hospital whose costs are bloated by administrator salaries and bureaucracy that add no value to direct patient care.

Somewhere there is a corporation that is self –insured and will set up an Ideal Medical Savings Account for its employees that will by-pass all the bloated bureaucracy and large salaries of the healthcare insurance industry.
It will result in a decrease in cost and a user-friendly healthcare system.

The generation of a consumer driven healthcare system will begin. All President Obama has to do is get out of the way.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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