On Wednesday, April 9, the Centers for Medicare & Medicaid Services (CMS) did something they have never done before. They released information detailing how the $77 billion that Medicare spent to pay physicians for their services in 2012 was distributed among the 880,000 providers in the U.S. This caused a small uproar in the media (which is already dying down) about how much certain physicians were paid in that year. However, it quickly became clear there were a lot of misconceptions about what the numbers mean. So, here's a few thoughts on what we learned from this new information.
The information released is good information. It is accurate and reflects data points the public and watchdog agencies ought to be monitoring. The government, as a massive (and unfortunately, growing) payer in the health care market should be transparent in reporting its payments. The data may, as expected, help all of us weed out those bad seeds who fraudulently bill the government for services they don't provide. Believe me, doctors join patients in wanting to end Medicare fraud completely.
But one thing the data do not show is how much your doctor earned. Consider a standard corner gas station, which might sell $4 million worth of gas in a year. Does that mean the owner is a millionaire? Well, considering that the owner probably paid at least $3.75 million for the gas — then has to pay rent, electricity, wages for staff, etc. You can see that such a number really doesn't tell you anything about how much the gas station made in net dollars.
The same holds true when trying to interpret what these dollar figures mean about your physician's pay. While you can see how much your doctor was paid by CMS, it really has nothing to do with how much your doctor actually brought home in the form of a paycheck.
There is one more thing you can see from this data, and that's how poorly Medicare pays physicians for their services. My practice charges $122 for a comprehensive hearing test, performed by a master or doctor of audiology, and takes 15-30 minutes. On average, Medicare paid us $22 for the test. We charge $361 to perform a laryngoscopy (inserting a camera through the nose to look at the voice box), but Medicare paid $83. And when we perform a swallowing test with an x-ray machine and barium, we charge $338 but only get $63. Numbers like this show why senior citizens are having a hard time finding doctors. Medicare doesn't pay enough to even cover the overhead of these and most other procedures. That's a real problem, not only for physicians, but for the patients on Medicare whom we are trying to treat.
Truth be told, the data show that Medicare paid, on average, and across the entire United States, about $57 to the physician for every office visit. $57. Now you can't even have a stopped up toilet inspected by a plumber for that much, let alone have any plumbing really fixed. Do senior citizens on Medicare really expect that their doctor is paid less to listen, examine, diagnose, and treat their health problems than a plumber charges for a simple toilet clog? Most Medicare patients are aware of these discrepancies, and are generally sympathetic to their physician's plight, but really can't do anything about it. Senior citizens are being caught between a rock and a hard place in this federal Medicare system, and one thing is for sure: It is not their fault.
Let me say that I, like most physicians, greatly enjoy taking care of seniors, despite having to deal with Medicare. They are some of my favorite patients, and I feel a debt of gratitude to their generation to see them, treat them with compassion, and yes, learn from them. Caring for seniors is one of the most rewarding parts of being a doctor. I don't want that to end, but the predicament I'm in as a private practice physician is making caring for Medicare patients more and more difficult. And so, as something else that will perhaps come of this new data released last week —we need to ensure the health of our nation's seniors is not further jeopardized by the Medicare payment system currently opened to scrutiny by the public. I hope a better future for Medicare awaits us all.