Health Costs Fueled By Doctor Pay

A recently published study suggests that high physician fees are responsible, in part, of increased U.S. health care spending, versus other countries. The study was published in the September 8th issue of the journal, Health Affairs.

Family Practice News reported that there is a larger pay differential in primary and specialty care in the U.S. versus Australia, Canada, and some other countries in Europe. “Our findings, as a whole, suggest that the observed price differences are not entirely a consequence of differences in underlying practice costs or in the tuition costs of medical education,” said Miriam J. Laugesen of Columbia University and Columbia colleague, Sherry A. Glied, currently on leave at the U.S. Department of Health and Human Services (HHS), reported Family Practice News.

The authors note that higher U.S. physicians incomes may be due to more highly educated and skilled professionals; however, increased fees that private insurers pay for general care and for hip replacement surgery, in particular, are more likely to blame, said Family Practice News. The researchers reviewed fees, incomes, and spending for primary care and orthopedic surgery, specifically hip replacement surgery. Primary care was defined as general and family practice, internal medicine, pediatrics, and obstetrics-gynecology, Family Practice News explained and U.S. physician data and fees were compared to that for Australia, Canada, France, Germany, and the United Kingdom, which all utilize fee-for-service reimbursement.

The U.S. had the highest physician income, with primary care doctors earning about $186,000 before taxes and after practice expenses, while Australian physicians earned $92,000. Primary care physicians in the United Kingdom earned closer to U.S. primary care physicians; approximately $159,000, said Family Practice News. Meanwhile, U.S. orthopedic surgeons earned the most money yearly—$442,000 after expenses and before taxes; French surgeons earned $154,000 and UK surgeons, $324,000.

The researchers used the fee for an 11-to-15 minute office visit for an established, not new, patient, and revealed that Australian public payers reimburse at $34; the UK reimburses at $66; in the U.S., physicians received about $60 from public payers; and Canadian physicians received about $59, Family Practice News explained.

The authors also determined that in the U.S., primary care physicians earned approximately one-third more than their colleagues in other countries, receiving larger reimbursements from private insurance than their foreign colleagues. For orthopedic surgery, the public pay rate was lowest in Canada at $652 and highest in the United States at $1,634.

Chapin White, a senior health researcher at the Center for Studying Health System Change, said in an interview that it’s not just physician fees, there is a basic flaw in how the payment system works. In the U.S., primary care physician income is about 42% of that earned by orthopedic surgeons in the U.S., likely because insurers have negotiated lower fees for primary care physicians. In other countries the gap is closer, more like 60%. According to White, wrote Family Practice News, “it’s not at all the case that primary care is underpaid, but more that the surgeons and specialists are overpaid.”

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