Doctors’ Pay
In the September 3 edition, a “retired systems analyst” expressed his amazement that a primary care physician “could not make a living” with the annual gross income of $470,000. [Letters, “What’s Up, Doc?” 9/3/09]. However, our highly trained systems analyst failed to take into account one very important part of the “system” when he offered his inflammatory remarks: the expense side of the equation! In addition, the analyst’s calculation of gross income is also fallacious, as he does not account for paperwork and phone time which would reduce billable hours to five per day and an estimated gross income of $336,000.
Running a simple spreadsheet (taking into account such factors as payroll and benefits for office employees, malpractice insurance, licenses and fees, office rent, utilities, telephone, postage, general liability insurance, allowance for bad debt, and unsecured property tax) would lead to a very conservative estimate of expenses at $257,936; thus leaving our greedy, overpaid, hypothetical physician with a net income before taxes of $61,264 (not including allowance for payment of medical school debt). Dividing by hours worked per year (daytime and on-call hours: 3,360) we find that this physician is pulling in $18.23 per hour.
The really scary issue here is that the healthcare reform debate is being framed and promulgated by people who have no concept of what it takes to deliver the final product. I wish that I was retired like the “systems analyst” who has offered to analyze our practices! – Robert Welti, MD
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As a retired physician and former owner/manager of medical practices in multiple states, I would like to shed some light on the economic plight of primary care physicians. I agree, as would most physicians, that $70 is a reasonable charge for a 15-minute visit; unfortunately, the payers see it quite differently. Medicare and most private payers typically approve $50 to $55 dollars for this service while many HMOs only approve $20 to $30. Unless the patient has met his/her annual out-of-pocket maximum, the insurance companies reimburse at 80 percent and the physician must engage a billing service to pursue the patient balance. The payers routinely deny charges or request additional documentation which forces the physician to spend much more than “15 minutes per visit.” The typical primary care physician spends between 50 to 60 cents of every dollar he actually collects on office overhead, salaries, and insurance. They then need to service more than $250,000 of medical school debts. It is no wonder medical students are fleeing primary care for plastic surgery and other more lucrative fields. – Gary Feldstein, MD
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Harold Jacobson’s analysis of what a doctor would make as gross income is simplistic to say the least. First of all, many doctors would average seeing patients at the rate of three an hour-not four. Secondly, an independent doctor I used to see had three staff people, and at least two of those would have to be experienced and earn a fair amount. Thirdly, there are the expenses of an office in this high-rent town, malpractice insurance, employee benefit expenses, utilities, accountant fees, and so on. Finally, there are the hours of time the doctor has to spend doing extensive paperwork for insurance claims and other issues. This leaves the doctor with a net of probably $100,000 if he or she was lucky, and a much longer workweek than 40 hours. Wake up, Harold-and you used to be a systems analyst!– Michael Klein
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It seems those who are not health professionals don’t realize that businesses in the health professions typically don’t work the same way as other businesses. Patients either can’t afford to pay cash or they are insistent on their insurance covering the bill. They expect insurance to cover all appropriate care, yet this is far from what happens in reality. It’s getting harder and harder for doctors to collect from insurance; helping doctors and their patients isn’t exactly part of the insurance companies’ agenda. Result: Doctors don’t know when or if they are going to get paid. Add that to the present economy and consider overhead-such as, taxes, rent, staff payment, equipment maintenance and leases, malpractice insurance, student loans, etc.-and it’s no wonder so many doctors are throwing in the towel. Licensed doctors, even chiropractors like myself, put in a lot of effort to achieve their skill, knowledge, and license. They deserve a chance to most effectively treat patients and enhance the health and wellbeing of society, while being able to reasonably make a good living in doing so. Hopefully health care reform will deal with these issues, but unfortunately it will probably be a long and difficult process to fix our broken health care system.-Edmund A. Geiswein, D.C., Lompoc