Why Your Doctor's Not Feeling So Good
Physicians' paychecks are feeling the pinch, an effect of rising costs and the whole managed care mess.
The Doctor Is Out
Lower medical fees, more stress, meddling insurance companies: more and more physicians, young and old, are getting fed up with the modern practice of medicine.
Why even Marcus Welby, MD, would dump his old profession nowadays
By Evan S. Levine, MD
Illustration by Tim Foley
I’m a board certified cardiologist. I’m also board certified in nuclear cardiology, and my lab is even certified by the Commission for the Accreditation of Nuclear Medicine Laboratories. But in spite of all my efforts (including two years of advanced medical training and spending about $10,000 to prepare for my board exams and have my lab certified), Cigna Health Insurance still won’t allow me to perform one of the most routine heart procedures, a nuclear stress test, on my own patients. In fact Cigna won’t allow any cardiologist’s office to perform a nuclear stress test as a matter of “company policy.”
If you think that sounds like a good idea—it isn’t. Instead of allowing me to perform a test on a patient I know, Cigna, it seems, prefers a stranger to perform the test. In some hospitals, doctors who perform the test are not board certified in nuclear cardiology; in others, a physician assistant, not an MD, supervises the treadmill part of the test. But a properly trained doctor knows when to stop a test and how to administer treatment if there is a problem. (Ask yourself who you would prefer to administer this test the next time you take it.)
This is just one small example of the sort of big and little headaches that we physicians put up with every day—and why many doctors are increasingly fed up with the practice of medicine. A lot has been written about the country’s healthcare crisis and, truth is, almost nobody is satisfied with the current system of managed care. You probably aren’t happy about the difficulty of getting in to see a specialist; your employer isn’t happy about rising health insurance premiums; and your state and federal legislators aren’t happy about the rising cost of funding Medicare and Medicaid.
But few groups are as disillusioned as physicians. “If they had to do it over again, most doctors are not sure they would,” says Dr. Sherry Solomon, a Bronxville ophthalmologist who has been practicing since 1991. She knows of a number of physicians who have left medicine; one surgeon decided to open up a bar in the Hamptons and an Italian restaurant in Connecticut. “Doctors are looking to do other things,” she says.
What about the nice living doctors make? Sure, many physicians enjoy a comfortable income. According to a recent survey by the American Medical Group Association of Alexandria, VA, in 2004 the average U.S. general surgeon received $270,000; a diagnostic interventionist radiologist got $410,250. But those paychecks go to a relatively small number of doctors, the medical equivalent of Barry Bonds and Alex Rodriguez. The average U.S. family physician, according to the same survey, last year earned $154,463—hardly an extravagant salary, especially if you’re raising a family in an expensive metropolitan area like Westchester.
Unlike other professions, most physicians have no control over the fees they receive. For the past 20 years or so, most doctors’ financial compensation has come directly from the insurance companies, or federal and state governments. Doctors who accept this type of insurance reimbursement—and probably 98 percent do—are told precisely what they can charge for a given procedure, exam, or office visit. They can bill the insurance companies whatever they like, but in the end they have to accept what the insurers decide to pay.
And over the years, many have decided to pay less. One of the finest cardiothoracic surgeons in New York State confides that his fees have been slashed (like most doctors, he is loathe to criticize big insurers publicly). In 1989, he says, he performed a three-vessel coronary bypass procedure on a patient, a relatively simple operation for him. Adding up what he received from Medicare, supplementary insurance, and from the patient himself out of pocket, he says he was paid $6,564.
Almost 16 years later, in 2005, the same patient returned for a very difficult and risky new procedure that also included an aortic valve replacement. For this surgery, the surgeon says, he has been paid $2,100 and is “waiting” to be reimbursed another $400 from the patient.
Medicare, which sets the benchmark for private insurers’ fees too, has also cut reimbursements for other procedures: a hernia repair, which Medicare paid $507 for in 1995, is today reimbursed at a rate of $442; a gallbladder operation that Medicare reimbursed about $1,000 for in 1979, today fetches $670. Reimbursements have been slashed even more precipitously by Medicaid, the state healthcare program for the indigent; it pays just $140 for a hernia.
Dr. Solomon reports that she receives $600 today for a laser procedure to repair a detached retina that four years ago paid $900. And today she is also required by Medicare to provide follow-up care for up to 90 days as part of her fee. “Someone could come into my office every day for three months following a procedure, and I get paid nothing extra,” she explains.
Meanwhile, doctors’ costs for running their offices haven’t remained the same—they’ve gone up. According to a large Westchester medical group practice, each year since 2002 its costs for health insurance and other employee benefits have jumped 10 percent, rent 6 percent, property insurance 12 percent, medical supplies 4 percent, and malpractice insurance 7 percent.
On top of those normal costs of business, doctors are struggling under stratospheric malpractice insurance premiums. I pay $16,000 a year for my malpractice insurance, and I count myself lucky. According to one insurance company survey, the average general surgeon in Lower Hudson Valley pays $66,369 in malpractice premiums—a 69 percent increase over five years ago. Doctors in ob/gyn pay even more ($110,767, up 53 percent in five years). “Some ob/gyns have had to limit the number of babies they deliver in order to keep their premiums down to a manageable level,” says Dr. Carl Feind, a cardiologist who practices in Hyannis, MA.
And if you’re just starting out in medicine, you’re probably carrying immense debt. A year at Tufts Medical School, the most expensive in the country, will currently set you back more than $44,000 in tuition and fees. Once you factor in living expenses (even medical students have got to eat), many young med school graduates are holding a quarter-million dollars of debt. “I’ve just started my second year of medical school and have just passed the $100,000 mark,” says Flavio Casoy, a student at Brown University Medical School. He wonders how he’ll ever be able to pay back what he owes. “It’s terrifying.”
After medical school, aspiring doctors still face additional years of training in their medical specialty before they’re ready to practice. Most medical residencies pay about $40,000 a year, far less than first-year lawyers earn. Several years ago when I interviewed at Yale New Haven Hospital for a cardiology fellowship, I was told they did not provide health insurance. I would have to pay for it myself—about $2,400 per year—out of my $30,000 salary.
Why would any sane person enter into private practice? Fewer are. Dr. Norman Sas, a 1974 graduate of New York Medical College, who has run a successful Bronx practice for 25 years, reports that he can’t find anyone to join his practice. He’s been advertising for a new associate for six months. Of the 18 responses he has received, he’s interviewed eight. “The first two interviews lasted about an hour-and-a-half,” he says, “all the others about 30 seconds. That’s because I asked the last question first: ‘How much do you want?’”
It turns out they all wanted about $180,000, about the going rate for a new surgeon at a large university hospital—but roughly $50,000 more than Dr. Sas believes he can afford. “In my practice, the average gross income is around $900 per surgical procedure,” he says. “So for me to break even on a new guy, he would have to do about 310 cases in his first year. It took me about 12 years to build a practice that generated 300 cases a year.”
How can university hospitals afford those salaries? Hospitals, he explains, can subsidize surgeons’ wages with so-called “bed fees”—charges to patients for using hospital facilities such as operating rooms and equipment, not to mention those infamous $20 aspirin tablets. “Whereas my income is solely derived from the work I do, the hospital has another source of income,” Dr. Sas notes.
With managed care, many physicians run a daily bureaucratic gauntlet under which they must obtain permission from insurers before they can perform many tests and procedures. In theory, this is to reduce unnecessary tests and keep medical costs down, but in practice, many doctors will tell you, it often turns into an exercise in medical interference and nickel-and-diming. One prominent urologist told me about a case where an insurance company demanded to speak to him several times before allowing him to perform what he felt was necessary surgery. He got so fed up that he told me, “I just might tell the patient to go somewhere else. It’s not worth the heartache.”
Is it any wonder a growing number of physicians are dropping out of insurance plans? One local family practitioner recently ended his 14-year relationship with a major health maintenance organization (HMO), when his contract expired. Among the last straws: the HMO repeatedly failed to give the doctor and his partner a schedule of the fees they would be paid for their work, he maintains. “They only sent us a list of our HMO patients,” he says. “But it was a no-brainer. We were receiving less money from the HMO than we did 14 years ago. It provided 40 percent of our patients, but only 25 percent of our income.”
But opting out can be hard on patients. One Yonkers doctor who dropped an insurance plan said that some of her patients wanted to stay on and pay out-of-pocket for their office visits, but were unable to. Why? Since the doctor was no longer a member of their insurance plan, she was no longer permitted to order any tests or consultations for those patients.
“I can’t wait to get out,” says the family practitioner who recently dropped the HMO. Now in his early 50s, he says, “I’m fortunate because I don’t have too many more years of practicing left. The whole business plan for medicine is no longer working. It’s headed for collapse.”
One cardiologist said he was called by his patient’s insurance company while she was in his office waiting for a stress test. The insurance representative had called to say that they were denying his request to perform the study on his patient because they had just noticed that the doctor was not certified to perform stress tests. The doctor said he’d happily fax a copy of his certification to them at once. The rep agreed that would be fine but said it would take a week to process the matter. The patient, who had already taken a day off from work, had no choice but to return two weeks later—and miss another day of work.
Evan S. Levine, MD, has offices in Yonkers and the Bronx. He is the author of What Your Doctor Won’t (or Can’t) Tell You, published by