Posted by Bill Sandweg on 31 January 2014.
The New York Times is running a series on health care costs and the incomes of high earning physicians. The most recent article was entitled, “Patients’ Costs Skyrocket; Specialists Incomes Soar”. It appeared on line on January 18, 2014. The article focused on a college professor who had a minor skin lesion and who, after being shuttled between three high income specialists, ended up incurring over $25,000 in medical bills in less than one day. According to the Times, the bills were so high because the professor’s treatment involved three of the most highly compensated specialties in medicine (dermatology, anesthesiology, and ophthalmology) and her removal procedure was done on the grounds of a hospital.
As reported by the Times author, “Many specialists have become particularly adept at the business of medicine by becoming more entrepreneurial, protecting their turf through aggressive lobbying by their medical societies, and most of all, increasing revenues by offering new procedures – or doing more of lucrative ones.” Minor procedures typically offer the best return on investment. In addition to whatever they may receive for actually providing care, many physicians receive additional large sums from business activities such as labs to which they send their patients for tests or facility charges at ambulatory surgery centers. In each case the facility is owned by the physician ordering the test or doing the surgery.
Health care costs are indeed skyrocketing. There are some fascinating numbers in the Times story which help explain why and they don’t involve lawyers. Fees paid to doctors are the second largest component of overall health spending in this country, after hospital costs. Our physicians make far more than do physicians in other developed countries. The incomes of dermatologists, gastroenterologists, and oncologists in the United States have gone up by 50% or more since 1995, even after adjusting for inflation. On the other hand, the incomes of primary care physicians, who are in desperately short supply, have only risen 10% since 1995. Is it any wonder that we don’t have enough primary care physicians? Why would anyone take on a career in primary care when the big money beckons from other specialties? The shortage of primary care physicians will only get worse as more people become insured and seek medical attention.
Meanwhile, the Justice Department has joined multiple whistleblower suits against Health Management Associates, a for-profit hospital chain based in Naples, Florida. The suits allege that sophisticated software was used to monitor hospital admissions. Physicians employed by the hospital chain were given admissions targets and their progress in meeting those targets was monitored on daily scorecards. It is further alleged that physicians who did not meet their targets or who questioned why patients who did not need to be hospitalized were being admitted were fired. Significantly, the Justice Department is involved in investigations into similar claims at other hospital chains.
The next time you are asked to blame the rising cost of health care on greedy lawyers, take the time to look into the actual facts and see where the money goes.
