Study shows 8% drop in surgical specialists’ net income, reimbursement from 1995-2003

Fallout may include less physician volunteer work, pro bono care and more medical specialists.

Physicians continue to feel the financial constraints of decreased reimbursements and the results could prove disastrous for the profession, patients and the entire health care system.

After adjusting for inflation, a new study from the Center for Studying Health System Change (HSC) revealed an overall 7% drop in physicians’ net incomes between 1995 and 2003.

Alwyn Cassil

Of the medical groups polled, primary care physicians and surgical specialists took the hardest monetary hits with 10.2% and 8.2% deceases, respectively. Yet, the study found that incomes for medical specialists remained relatively steady (-2.1%), and other non-medical professions saw a 7% rise in earnings.

The suspected cause for the financial slump: lagging public and private payer fees. “Our belief is that stagnant, or even in some cases, declining reimbursement rates are a significant factor in the decline in real incomes for primary care and surgical specialists,” HSC’s director of public affairs, Alwyn Cassil told Orthopedics Today. The study noted that Medicare reimbursements increased only 13% during the studied period, while inflation rates soared 21%. “In 1995, commercial fees were 1.43 times Medicare fees on average; by 2003 this fee ratio had fallen 1.23,” the researchers wrote in their study.

In reaching their conclusions, investigators conducted telephone surveys of 12,000 physicians from 1996 to 1997 and between 2001 and 2002. They also polled 6,600 doctors from 2004 to 2005. Researchers reported a 52% to 65% response rate. The study’s findings combined previous HSC reports and cited other prominent research from groups such as the Medicare Payment Advisory Commission (MedPAC) and the National Center for Health Statistics.

Spine surgeons hit hard

Specific surgical specialties may bear more of the brunt from the reimbursement blows. David A. Wong, MD, told Orthopedics Today that spine surgeons have seen a 30% to 40% drop in income. He said that surgeons are also hit with “hidden reductions” such as the inclusion of 3 months of follow-up care and day-of-surgery assessments into global fees. He noted a -45% and -27% change in reimbursements for instrumentation and laminotomy CPT codes, respectively, from 1992 to 2002.

“Reimbursement has not even kept pace with inflation,” said Wong, a member of the Orthopedics Today Editorial Board. “We are absolutely falling behind. Physicians have traditionally looked after Medicare patients for a lower reimbursement in the spirit of ‘public service.’ Unfortunately, private insurance companies have taken advantage of physicians’ good will and begun to index their reimbursement to Medicare. Physicians have limited leverage against private insurers who are exempt from antitrust.”

The study also found a rise in testing and specific procedures. It highlighted a yearly 6% increase in minor procedures vs. 3% for major operations from 1999 to 2003. “It may be that some of those surgical specialties, some of those procedures, just may not be as amenable to productivity gains as some of the procedurally based medical specialties,” Cassil said. Procedure-based specialists may also have greater financial footing because they can invest in specialty centers, she said.

Although hampered by reimbursement pressures, the study found that only surgical specialists showed significant increases in direct patient care. The group devoted 47.2 hours per week with patients in 1995 vs. 50.1 hours per week in 2003. “Direct patient care time has definitely increased to try to offset the lower reimbursements,” Wong said. He spends nearly 80% of his time with patients and estimates that his colleagues spend more.

The bottom line: more physicians moving to medical specialties, less charity care and less time for professional activities. The study also cited a 6 percentage point increase in the number of medical specialists, while primary care physicians and surgical specialists each decreased by 3 percentage points from 1995 to 2003.

“I think the underlying take away is that the payment system is sending some inadvertent signals to the physicians about what kind of medicine to practice and how they practice that medicine,” Cassil said. “The rewards for doing things to patients are relatively greater than the rewards for the evaluation and management of patients, which tend to be the kind of services that primary care and cognitively based specialties provide.”

The study cited reports of decreased physician desire to volunteer services. “When there are a limited number of working hours and the are lower, the prospect of using a block of time for non-reimbursed activity is not reimbursements appealing at this point,” Wong said. “This impacts pro bono patient care, service to the medical profession and the community.”

Stuart Hirsch, MD, said that he is also seeing physicians opt out of Medicare due to reimbursement challenges.

“There will be, over time, increasing difficulty with access to the best quality physicians and especially in the most high-demand areas,” he told Orthopedics Today.

Experts noted the timing of the study’s findings prove especially poignant as the Centers for Medicare and Medicaid Services (CMS) proposes to increase physician reimbursements for evaluation and management services.

While CMS holds that the plan will more adequately pay physicians for spending time with patients, Hirsch noted that the budget neutrality measures included in the ruling will put money in the pockets of some physician groups while taking it from others.

Hirsch, a member of the Orthopedics Today Editorial Board, said that physician reimbursement is a complex issue and that new health care approaches require open-mindedness.

“There is no other profession that has allowed itself to be so managed the way that medical care has been managed and, to some extent, it has been to its significant detriment,” he said. “The funding that should be going to quality care and to the patients’ providers — the physicians who are giving care — it’s typically going to health insurance companies, CEOs and administrative overhead.”

While Cassil noted that the HSC is not an advocacy group, she said that the study’s findings could give lawmakers a better picture of physicians’ financial situation.

“The reality is that physicians are just like anyone else,” she said. “They respond to the financial incentives that are put in front of them. And there is this larger public policy issue of, ‘Are we sending them the signals that will result in the work force and the kinds of physicians in the right specialties in the right place that will actually meet the needs going forward?’” Cassil said. “As policy makers grapple with this, they should be aware that these pressures exist for physicians.”

For more information:

• hschange.org
• cms.hhs.gov