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PRESIDENT’S PAGE
0.7% annual increase between 2003 and 1
The belief that physician fee-for-service is the cause of runaway health care spending is not true. The runaway cost is clearly due to overpriced hospital services, insurance companies working hard to maximize the total cost of health care, and price-gouging pharmaceutical companies. Because insurers are managed care taking — 85% of the insurance premium must be spent on patient care and only A CEO of an insurance company can only The only way to justify increased premiums is by increasing the total cost of care. The billions of dollars spent delaying care through prior authorization are counted in the 85% portion as care delivery, not overhead.
The novel payment methods that are proposed to replace fee-for-service include bundled payments, pay-for-performance, and risk sharing. None of these payment methods are easy to implement in small, independent practices. New staff and software are needed to comply with MACRA and MIPS reporting. This has created a new quality sector in the health
care industry. The cost of compliance cancels out the revenue generated by meeting performance targets, resulting
in either no increase or a net decrease in revenue for the private-practice physician. Bundled payments only work with groups large enough to take on a large insured population. This will drive more doctors out of private practice.
With risk sharing, doctors are paid more by insurers for ordering fewer tests and procedures and sending their patients to the lowest-cost provider (not always the best provider for the patient). This is another type of care rationing.
I believe patients should know if their insurance plan contracts with physicians in risk-based contracts. When patients are denied care by their PCP, they may seek care elsewhere, in a more expensive setting. Since ED physicians must comply with the Emergency Medical Treatment and Labor Act (EMTALA), the ED physician will order the test and the cost of care will rise.
Doctors Seger Morris and Heather Lusby wrote an article on physician compensation for the American Association for Physician Leadership. They state that employed physicians see on average 19% fewer patients
than private-practice physicians. The percentage of private-practice physicians dropped from 41% in 1983 to only 17% in 2014.2
payment structures and private-practice physicians have little ability to negotiate reimbursement rates with private insurers. Given their smaller market share, the laws of supply and demand yield unfavorable results for the private-practice physician, beyond those in concierge, direct primary care, and other niche practice models. The hospital system business model relies on physicians ordering tests, hospitalizing patients, and ordering ancillary services. The hospital system has an incentive to employ physicians to ensure a growing patient base for core revenue streams. The supply and demand are curved in favor
of those employed within the hospital system. This trend is supported by the fact that some specialties command salary subsidy beyond productivity. It is likely this phenomenon will spread to other specialities if compensation continues to outpace productivity.
Andrew W. Dahlke, MD
President, Medical Society of Delaware
REFERENCES
1. brooklynworks.brooklaw.edu/bjcfcl/vol11/iss2/9
2. www.physicianleaders.org/news/physician-compensation-bubble-looming
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Del Med J | March/April 2019 | Vol. 91 | No. 2
