Posted on 07/08/2024 12:05:57 PM PDT by nickcarraway
— It's time to take back control of our profession
As you may recall from my recent analysisopens in a new tab or window of the 2024 Doximity compensation report, doctor pay is decreasing in real terms. That's a problem given that the same report indicated the large majority of doctors do not feel fairly compensated. Moreover, physicians are being asked to do more and more. We see this in doctors' responses that indicate higher patient workload and greater administrative burdens as top causes of burnout.
Decreasing doctor pay coupled with greater workload is a recipe for disaster on both an individual and systems level. Burnout is at an all-time high among physicians. If things don't change, that will only get worse.
So, let's examine why exactly physician pay is decreasing and what we can do about it.
The Current State of Decreasing Physician Pay
In 2023, average doctor compensation increased by nearly 6%. This is a positive difference from 2022 when doctor pay fell by over 2%.
While this is great for 2023, overall trends still do not favor physicians. Inflation is slowing, but it has run rampant in recent years. With these inflationary pressures, doctor compensation has seen no real growth.
In simple terms, doctor pay has not kept up with inflation over the past several years. Thus, in real terms, pay is contracting. Our purchasing power based on our compensation for clinical and non-clinical care is less than it was before.
Other Factors Leading to Lost Income
Even though physician pay increased overall in 2023, multiple factors have led to declines in specific areas.
Declining reimbursement
Medicare physician payment has decreased by 26%opens in a new tab or window since 2001. Additionally, a recent Harvey L. Neiman Health Policy Institute study foundopens in a new tab or window that physician reimbursement per Medicare patient decreased 2.3% between 2005 and 2021 when accounting for inflation. And this was despite a 45.5% increase in physician services to each patient. Again, less pay and more work.
Medicare data is the most widely available and thus serves as the benchmark in these cases. However, it appears insurance reimbursements are down across the board. Thus, a main factor here is decreasing insurance reimbursement for physician services.
Changing employment models
For the first time, the majority of physiciansopens in a new tab or window work within an employed model under a healthcare system, university, or private equity company.
Why this happened in the first place is up for debate. One view is that physicians wanted to trade the stress of running a business and dealing with insurance companies and government policies for a stable paycheck and no headache. That's a large part of why I opted for an employed position.
The tradeoff here is that physicians gave up control of their business. We became employees. We found ourselves on the outside looking in when it came time to negotiate reimbursement rates, policies, and even practice guidelines.
And unfortunately, we also started to be viewed as expendable by our employers. Some physicians came to view themselves as expendable as well. So, we accepted a lower value and took on more work.
Lack of education
The last big factor I will discuss is a lack of education. No, not medical education. We all get plenty of that. But we lack an education in the business of medicine, practice management, negotiation, and personal finance.
We therefore feel like we do not have the ability to run our own practice, making an employed position the only option. Again, I am an employed physician. My chosen practice setting best allowed me to provide the type of care I wanted within my field of reconstructive microsurgery. But even within that framework, this education is important should our practice change or if we want to have leverage within an employed setting. Without knowing how to negotiate, we cannot leverage our unique skills and value for better pay.
And lastly, without good personal finance habits, we are tied to our paycheck. But once you enact a plan and reach financial freedom, you are no longer financially tethered. You can practice medicine on your own terms.
A Quick Aside: Plastic Surgery
In the Doximity compensation report, plastic surgery was one of the few specialties that bucks the trend. We saw an increase in pay even after factoring in inflation.
Why is that? I believe one driving factor is that the aesthetic portion of plastic surgery is an out-of-pocket, cash pay practice model. And, despite aesthetic surgery being a very minor portion of my practice, aesthetic surgery dominates the field of plastic surgery.
A cash-based practice allows plastic surgeons to negotiate prices and reimbursement directly based on supply and demand, as well as inherent skill and services offered. Insurance and red tape are cut out.
Even within an employed or hospital model, this trend may be due to the fact that plastic surgeons help reduce length of hospital stay and services needed by managing challenging wounds and surgical problems. These are important parameters for hospitals and they may be willing to compensate those improving the metrics.
Lastly, in general, I do believe that plastic surgeons tend to be more likely to learn about the business of medicine. Maybe because private practice is still such a big component of the field, unlike other specialties that have become predominantly employed. But really, this is just speculation.
The Impact of Decreasing Doctor Pay
Overall, this lack of growth in physician compensation may:
Increase specialty gaps Worsen the physician shortage Increase burnout All of this leads to fewer doctors and worse patient care. Not good for medicine or society as a whole.
What Can We Do?
Many of the contributors to decreasing pay are out of our control. But there are always things we can do at both individual and system-wide levels.
On a system-wide level, we must advocate for physician well-being, including financial well-being. We also need to reassess the structure of medical practice. Perhaps a concerted effort toward more favorable practice settings are needed. Representation and a voice at the table with regards to policy is also necessary.
Realistically, however, there's no quick or easy solution to the issue of compensation at a systems level.
At an individual level, my recommendation is for physicians to improve their financial education and build basic habits that will lead them to financial freedom -- so they can practice medicine because they want to, not because they have to. Moreover, doctors should know how to negotiate with health systems and insurance companies to ensure fair reimbursement for the services they provide. We need to get into the game.
If we can take back control of our finances and come to better understand the business of care, we can do more to take back control of our profession.
Jordan Frey, MD, is a plastic surgeon at Erie County Medical Center in Buffalo, New York, and founder of The Prudent Plastic Surgeonopens in a new tab or window.
Looking to improve your financial well-being? Check out Frey's online course, Graduating to Successopens in a new tab or window, a comprehensive and interactive 12-module course that helps doctors achieve personal, professional, and financial success during and after their transition from trainee to attending. Or read his best-selling book, Money Matters in Medicineopens in a new tab or window.
I can't muster any sympathy for them being underpaid and can't give two sh-ts for their feelings in most cases.
If the damn government was in charge of the Sahara Desert, in five years or less there would be a shortage of sand. There is nothing they can't screw up. The last thing this cluster fluck of a nation did half right was WWII.
Business management? Doctors? The two never met in most cases. If I had run my business like most clinics are run I would have been bankrupt and run out of town on a rail. As far as most docs go with business management and personal finance is does the money coming in hand have more than the money going out hand? That has been all that is required.
One of our local cardiologists has a or had a flying Mig-29. Nearly killed him but he had it. This isn’t a big city.
Just out of general interest, nothing specific, I have noted over many years now that India, Pakistan, and Nigeria seem to produce “qualified” doctors at a high rate that feature almost daily in the UK Daily Mail for sheer homicidal incompetence and for being sex-pests in the NHS horror-abomination that it has become. A benign idea gone horribly wrong (the NHS).
I’m starting to think this is revenge by the former colonies by medicinal warfare.
Perhaps the overflow is hitting the US now.
That also means a nearly complete loss of independence in judgment: they have to follow the treatment protocol demanded by the group or hospital, not what they think is actually best for you. The protocol is whatever generates the most revenue.
The American medical system is an amazing mass of fraud, waste and abuse and is directly injuring many of the patients it claims to be helping.
It needs to be razed to the ground and replaced with a system like Germany's, which is also a fee-for-service system not a barracks national health scheme like Britain's. Everyone pays in (those not working or retired have the gov pay), one negotiated fee schedule across the whole country, no malpractice insurance, but comprehensive disability coverage. No "in network" "out of network" or "cash price" bull crap. You can change jobs without worrying about your health insurance. No Medicare, no Medicaid, no Workman's compensation, no VA: the gov can just pay for the same insurance if you are old, poor, or a veteran. I lived there for a while and paid 1/10 of what I paid here for the same coverage.
I never knew this about Germany’s healthcare system. Thank you for the information
Their actual direct pay may be decreasing - I don’t know but I do know that many doctors are part of practices that run test mills that charge thousands and thousands of dollars for most procedures/test they prescribe.
So, you want us to be the property of the government, with no say in our health.
Considering the fact that one of the big issues here in changing jobs is possible loss and the fact that last time I looked a fairly standard BCBS policy for myself and my wife was about $22,000/year, the notion that you have a choice in the US in health care is rather quaint.
I lived in the U.K. for a while. Our system gives a lot more choice than theirs did.
Yes, if you change jobs it can be a problem. But at least you can’t lose everything if you disagree with thew government. I live in CA, where they’ve euthanized people.
Might be a good research topic.
After they sold their souls during Covid, IDC about their pay. You would’ve expected the inherently decent ethical ones to emerge from the nightmare and revert to being their good ol’ selves.
It didn’t happen where we are. (I don’t know about other places.) It seems that every visit is adversarial, having to deal with their pissy attitudes and/or “I didn’t give a s#it”.
Bravo, for saying it like it is. Same in my profession. Men won’t work so hard so cheap.
Germany's system is almost like ours: you pick the doctor, you have a co-pay, etc.
We’re slowly moving in that direction. And you can be sure you’ll be shunted off to hospice if your insurance won’t pay for the expensive cancer treatment.
Apollo program...
Bkmrk.
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