Doctors say costs It was once a truism that becoming a doctor was a long road of schooling, grueling hours of tutelage under the worst conditions and years of repaying loans. But at the end of that road was comfortable wealth and employment for life.
eating up incomes
Reduced payments, expensive insurance
combine to make it tough going, they sayStar-Bulletin staff and wire
After 35 years of practice in San Antonio, Dr. Antonio Cavazos Jr. is seeing that way of life disappear.
Cavazos, 66, remembers good payments from Medicare, quick payments from insurance companies and a society that didn't sue its doctors at the drop of a hat.
But the last five years brought two office moves to cut costs, a 300 percent increase in medical malpractice insurance expense, Medicare payment cuts and deep discounts from managed care companies.
"They are squeezing us so it's not such a good business to be in," said Cavazos, who is president of the 4,200-member Bexar County Medical Society in San Antonio.
Former Hawaii Medical Association president and dermatologist Dr. Philip Hellreich agrees. But he says the situation for doctors is far more acute in Hawaii with its higher cost of living, costly state regulations and lack of competition among insurers.
"I'm paying myself 30 to 40 percent less than I was even three to four years ago, yet costs keep going up," he said.
Hellreich said his overhead used to account for about 25 percent of the money he earned a few years ago. Now it ranges from 70 percent to 75 percent. Add to that a recent 25 percent increase in malpractice insurance and a further 50 percent increase projected next year and Hellreich says it's no wonder older physicians are choosing to either leave their practice or move elsewhere.
Other businesses and professions can pass on increased costs to their customers, but not doctors, Hellreich said.
"We are the only profession in this state whose prices are fixed," he said.
Average pay for primary care doctors nationwide was up 1.21 percent to $149,009 in 2001 compared to the previous year, according to recently released results of a survey by the Medical Group Management Association. Compensation for specialists was up 2.64 percent to $263,254 a year for the same period.
During that time, however, the number of patients and procedures increased by a greater amount. Productivity was up 11 percent for primary care doctors and 5 percent for specialists, the MGMA reports.
The same is true in Hawaii, Hellreich said.
"In order to keep pace, I have to see a lot more patients than before," he said.
But even the slight gains in pay nationally will likely have disappeared when account is taken of 2002. At the beginning of the year, Medicare reimbursements to doctors were reduced an average of 5.4 percent.
In February, physician groups successfully lobbied Congress to stop another cut of 4.4 percent in Medicare doctor reimbursement that would have taken effect March 1. Instead, doctors will get a 1.6 percent increase over last year.
Vic Simon, editor of Physician Compensation Report, said that with the cost of running a doctors office increasing, the Medicare cuts come out of the physician's take-home pay.
He said the average cost of paying for office space, nurses, record keeping and other overhead is about 58 cents on every dollar brought in. That leaves 42 cents in compensation for the doctor.
When Medicare cuts 5 percent, that leaves the doctor short a few Lexus payments with only 37 cents on every dollar to take home.
That has led many doctors to reduce the number of Medicare patients they see or stop taking new ones, Simon said.
It's also a similar situation for those who treat workers' compensation patients in Hawaii. Workers' compensation reimbursement is about 10 percent higher than that of Medicare. On the national level, Hawaii's worker's compensation reimbursements are near the bottom of the list, said Dr. Scott McCaffrey, who specializes in occupational and rehabilitation medicine at St. Francis West and sees many workers' compensation patients.
"We are 48th on the rung in terms of our reimbursement," he said. "For every dollar I bring in, I'm lucky if I take home 10 percent."
Then there's wrangling with insurance carriers about claims payments and authorizations for various services, especially for patients with chronic illnesses or injuries who require a lot of care, McCaffrey said.
Moreover, because of low reimbursements, not all specialists want to take on many workers' compensation patients, both McCaffrey and Hellreich say.
"In the end it's the patient who's not getting the care that they should and could," McCaffrey said.
Primary care doctors such as family practice, internal medicine and pediatric physicians nationwide were among the hardest hit by the Medicare cuts. And the new payment schedules also devalued the surgeries done by ophthalmologists and gastroenterologists, Physician Compensation Report's Simon said.
That situation makes it even harder for a place like Hawaii with its high cost of living to recruit specialists who are already in short supply nationwide.
The nation faces a shortage of radiologists, anesthesiologists and cardiologists. "A doctorless Medicare won't work," Simon said. Four years ago, there was a national view that there were too many doctors. "Now (the view) is catching up with the reality that there are not enough."
Simon said some doctor practices have done away with managed care and government reimbursement woes altogether by providing "valet health care" mostly for well-to-do patients.
In the models Simon has seen, the doctors take on about 300 patients each and get about $4,000 in advance to take care of everything from physicals to minor procedures. For the patient, that means more individual attention from the doctor. For the doctor, it means a guarantee of $1.2 million a year before expenses.
It might be an ideal way for a doctor to practice medicine who is sick of dealing with insurers, but it's just not practical, especially in Hawaii, Hellreich said.
"There is just not a large enough segment of people here to allow doctors to do that." Moreover, even the well-to-do patients still want to use their insurance, he said.
The average for an experienced family practice physician nationally is $147,516 a year and $160,318 for an internal medicine doc, according to a compensation survey by California-based Physicians Search.
The survey found that the highest average compensation was $558,719 for cardiovascular surgeons. The highest pay for a heart surgeon in the survey was $852,717.
Neurosurgeons weighed in with the second highest average compensation at $438,426.
But salaries across the board would be less in Hawaii, Hellreich said.
Even though shortages in some specialities mean that doctors entering their first jobs with medical groups are being paid salaries that may be higher than a few years ago, the burden of dealing with lower payments for care on the shoulders of medical groups.
Doctors in private practice are shouldering their insurance burden and the payment cuts on their own.
"Physicians used to be able to make a comfortable living," said Dr. Patrice Burgess, chairwoman of the American Medical Association's Young Physicians Section, but the cushion to absorb rising costs and cuts is "disappearing."
Burgess, who practices family medicine in Boise, Idaho, said she came out of her residency and entered practice in 1993 with $56,000 in debt. Most now enter practice with more than $100,000 in debt and are faced immediately with malpractice insurance rates that make paying back the loans a long process.
"They just don't have a margin. There is nothing to fall back on," she said.
Star-Bulletin reporter Lyn Danninger and the San Antonio Express-News contributed to this report.