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Primary Care: Supply and Demand
Old 12-14-2007, 05:36 PM   #1
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Primary Care: Supply and Demand

Perhaps a naieve thought, but why doesn't the primary care physician compensation model not follow basic economic principles of supply and demand. We are training fewer primary care docs,therefore should the demand and therefore salaries be going up relative to specialists who are being trained in droves and making much more money.
If family docs and peds held out for higher pay would the "system" have to ultimately raise their fees. Why does a physician with upteen years of training and sacrifice have to settle for a salary that's less than an auto worker at GM with a HS diploma?
If fees were cut for high reimbursed specialists wouldn't fewer docs go into those fields?

Why do Docs allow entities like M'care and M'caid as well as insurance carriers to bully them? Who else can do what they do. I don't buy the argument that its due to their sense of committment to helping folks......Marcus Welby, MD is DEAD for the most part.

Just some thoughts.........anyone care to opine?
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Old 12-15-2007, 07:04 PM   #2
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Originally Posted by ferco View Post
Perhaps a naieve thought, but why doesn't the primary care physician compensation model not follow basic economic principles of supply and demand. We are training fewer primary care docs,therefore should the demand and therefore salaries be going up relative to specialists who are being trained in droves and making much more money.
If family docs and peds held out for higher pay would the "system" have to ultimately raise their fees. Why does a physician with upteen years of training and sacrifice have to settle for a salary that's less than an auto worker at GM with a HS diploma?

I was just reading somewhere this past week that Doctors who become Family Practitioners or Internists (primary care docs) earn on average $171,000, while those who go into specialties (dermatology, etc) earn $300,000+.

You raise a lot of good questions about supply and demand for primary care doctors.

But an auto worker at GM with a HS diploma earning more than $171,000? I think there is some myth making at work there.
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Old 12-15-2007, 07:09 PM   #3
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Was that "earnings" net of expenses?
How much do you think it takes to rent an office, hire staff, etc?
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Old 12-15-2007, 10:34 PM   #4
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Was that "earnings" net of expenses?
How much do you think it takes to rent an office, hire staff, etc?
I think the article referred to doctors "on staff", but I'm not positive. Wish I could remember where I saw it. Was it US News? I think maybe it was. I'll have to look for it again.

Is that $171,000 average earnings figure quoted by the article realistic, or are you thinking "where do they come up with these numbers?"?
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Old 12-15-2007, 10:38 PM   #5
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Might also consider the impact of 6-figure debt for many after 12 years of training before the above salaries begin.

OP should note that fees are often fixed and non-negotiable with Medicare, Medicaid, and HMO/PPO type contracts. We lost that battle decades ago.

There's also the fact that we can't cease, deny or withhold services or goods should a patient or insurance carrier refuse to pay, unlike a Chevrolet dealer, lawyer, or almost any other profession. If you see me and need my care, I must (and should) treat you to the best of my ability, even if you don't pay (of course eventually you would be dismissed but only after your conditioin has been stable for months and I notify you and agree to hang on until you find someone else).

So the free market doesn't apply very well here. Nice idea, though.
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Old 12-16-2007, 08:34 AM   #6
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The economic forces of Supply/Demand are at work in that field... but there are other forces at work also.

If the figures you quoted are accurate (perhaps it is an average)... then a specialist on average is rewarded with about 1/3 more.

It seems to me that I always pay more (or the insurance company does) when I see a specialist. I suspect that the average procedure a specialist performs (compared to a generalist) yields higher fees.

Plus... certain types of specialist (Surgeons for instance) are extremely busy. In both cases, I will bet they are working more than a 40 hour week.
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Old 12-16-2007, 09:16 AM   #7
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Plus... certain types of specialist (Surgeons for instance) are extremely busy. In both cases, I will bet they are working more than a 40 hour week.
40 hour week? You've gotta be kidding. I haven't worked a 40 hour week since the last time I took vacation and stupidly stayed in town.

The discrepancy among medical specialties is multifactorial. Among the legitimate reasons include more years of training and..., well... (I was going to say intensity and risk but then I though about my cosmetic surgery colleagues and dermatologists and on and on).

Mostly I think it is just a combination of cornering the market on specific procedures or illnesses and implicit if not explicit control over the number of given specialists in the market.
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Generalists become Specialists?
Old 12-16-2007, 11:38 AM   #8
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Generalists become Specialists?

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Originally Posted by Rich_in_Tampa View Post
40 hour week? You've gotta be kidding. I haven't worked a 40 hour week since the last time I took vacation and stupidly stayed in town.

The discrepancy among medical specialties is multifactorial. Among the legitimate reasons include more years of training and..., well... (I was going to say intensity and risk but then I though about my cosmetic surgery colleagues and dermatologists and on and on).

Mostly I think it is just a combination of cornering the market on specific procedures or illnesses and implicit if not explicit control over the number of given specialists in the market.
Just something to add to the mix, here. If the number of general practitioners graduating through training programs are fewer than the number of specialists, then, at some point reimbursement for family practice will need to increase, won't it?

That's one question.

As the burden for funding health care moves from employers to individuals, which physicians will provide the most value for the patient dollar?

That's the second question.

I don't think the healthcare industry will ever get to free market, but I do think that use of services, questions regarding care/cost by patients may change the dynamics a bit.

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Data from the US Bureau of Labor Statistics
Old 12-16-2007, 11:45 AM   #9
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Data from the US Bureau of Labor Statistics

Physicians and surgeons

"Earnings of physicians and surgeons are among the highest of any occupation. According to the Medical Group Management Association’s Physician Compensation and Production Survey, median total compensation for physicians in 2004 varied by specialty, as shown in table 2. Total compensation for physicians reflects the amount reported as direct compensation for tax purposes, plus all voluntary salary reductions. Salary, bonus and/or incentive payments, research stipends, honoraria, and distribution of profits were included in total compensation. Self-employed physicians—those who own or are part owners of their medical practice—generally have higher median incomes than salaried physicians. Earnings vary according to number of years in practice, geographic region, hours worked, and skill, personality, and professional reputation. Self-employed physicians and surgeons must provide for their own health insurance and retirement."

According to this source, the median (50th percentile) earnings for a family practitioner in the US in 2004 was $137,119 in the first year of practice and $156,010 thereafter.
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Old 12-16-2007, 08:31 PM   #10
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Our primary care physician recently informed us that he has joined MDVIP, an exciting opportunity for only 600 of his patients to pay $1500 annually to have access to him. That's $3000 every year for my husband and me before we even see him. We declined the opportunity.
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Old 12-16-2007, 09:03 PM   #11
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These are referred to as "concierge practices." I find them distasteful at best, elitist and perhaps greedy at worst. Of course "retainers" have long been used in other professions, but not much in health care.

It is a symbol of distorted health care reimbursement and bureaucratic priorities , a mark of desperation which I fully relate to and understand, but a path I would not be comfortable taking.

I've been approached about this a couple of times. There are actually companies specializing in setting up such practices, providing brochures, bookkeeping services and PR advice. They like candidates who are older and experienced to add an air of authority and credibility, all the more if you include among your patients a number of VIPs. Participants often work for free a session or two per month in a free clinic or other worthy place.

Guess I shouldn't be judgmental -- if I were twenty years younger I guess I'd have to look at it carefully if I wanted to do primary care.
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Old 12-16-2007, 09:32 PM   #12
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...therefore should the demand and therefore salaries be going up relative to specialists who are being trained in droves and making much more money.....
There still aren't enough specialists.

During the past year, my wife has needed to see specialists in a few different fields to diagnose a condition which arose suddenly and started with an unexpected visit to the hospital emergency room.

We could not obtain appointments with specialists sooner than 2 months in the future. I contacted several specialists, but they offered appointment even further out in the future. Meanwhile, my wife could barely walk and was out of work for months.

She had good, non-HMO, medical insurance and we live in an area with many hospitals and doctors. Her family practitioner was readily available, but was not able to diagnose her condition.

Luckily, she finally got a diagnosis after several tests and she is much improved.
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Old 12-17-2007, 04:54 AM   #13
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40 hour week? You've gotta be kidding. I haven't worked a 40 hour week since the last time I took vacation and stupidly stayed in town.
That was my point, Physicians tend to work quite a few hours (in general) and are on call. The implication is what it means to earnings vs effort. If 40hr/wk is an accepted standard in the US. It is a reasonable benchmark. However, many of us work some level of overtime compared to that benchmark. People on a salary do not get paid more, it reduces their earnings per hour.

On average if a physician earns $150/year (after biz expenses) and worked 40 hours a week, the earnings would be $72/hour. If the physician actually work 60 hours a week, they are earning $48/hr... or the equivalent of about $100k at a 40hr/wk job without OT.


How many hours a week does the average physician work (the range and average)?
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Old 12-17-2007, 09:27 PM   #14
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The National Physician Survey (http://www.nationalphysiciansurvey.ca/nps/home-e.asp)
is done in Canada every 3 years or so. The 2007 survey results will be released January 8, 2008. Meanwhile, attached is a PDF from the 2004 survey. On average, physicians reported working 50.7 hours a week. There was slight variation across geography (47.7 - 53.6 hours) but of course even that smoothed out the extreme values. Only 28.9 hours were spent in direct patient care, on average.

My general impression is that US physicians probably work longer hours than Canadian ones.
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Old 12-17-2007, 11:37 PM   #15
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I know of one of those concierge physicians who, after all that money you pay him, does not have hospital priviledges. So, if you had anything that required hospitalization, it would require paying a new set of physicians. He is also a major league creep and a shyster. Buyer beware.
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