Doctors’ income
declines, survey finds

The poll of Kapiolani Health
physicians finds 45 percent couldn't
meet expenses in the past year

By Lyn Danninger

Some Hawaii doctors are seeing their incomes decline even as their workload goes up, according to a survey taken late last year. Moreover, nearly half of the responding physicians reported a "payless payday" in the past year.

In November 2001, more than 1,250 doctors affiliated with the now-defunct medical plan Kapiolani Health were surveyed on a number of issues related to their practices. The questionnaire was sent out by the Kapiolani Health board in an effort to gauge the mood of its members. It was completed and returned by 522 doctors.

Forty-five percent of those who responded reported they had at least one month during the past year where they did not make enough money to cover basic office expenses such as rent and payroll. For obstetricians and pediatricians, the number was even higher at 60 percent.

Dr. Melinda Ashton is the pediatrician responsible for designing the survey and also medical director of Physicians HealthHawaii Inc., the network of physicians created to care for Kapiolani's health plan members. Ashton said the idea was to present a snapshot of physician's opinions.

Normally, physicians are not known for answering surveys, so Ashton said she was surprised when she received so many responses from the doctors.

While she was anecdotally aware that physicians incomes had been declining over time, Ashton said she did not expect to see so many reporting a "payless payday."

"We hear everyone talking about costs going up so this just confirmed the impression that people are not doing as well as we had hoped," she said. "Just like other small businesses in Hawaii, our costs have gone up."

Although the survey, which was not crafted by polling professionals, did not specifically ask about salary levels, 79 percent of the physicians who responded said their pay is now less than it was a few years ago or had remained about the same.

For many physicians, take-home pay is determined only after office costs and income from patient care have been balanced. If physicians had reported a declining number of patients, the drop in income could be explained, Ashton said. But she found the majority of physicians, 64 percent, reported they had an adequate number of patients and a further 29 percent said they are successfully increasing the number of patients they see.

Based on the answers received, Ashton's survey concluded the amount many physicians receive per patient is not always enough to cover their expenses. Moreover a slight majority reported they do not have enough money set aside in retirement plans to cover anticipated future needs.

When asked to evaluate the likelihood that they would remain in medical practice in Hawaii, 57 percent said they would stay no matter what happened, but 20 percent said while they wanted to stay in Hawaii, they were not sure if they could maintain a successful practice here. A further 12 percent said they were open to opportunities for a better income or a lower cost of living, while 2 percent said they were actively pursuing other opportunities away from Hawaii.

The results of the survey don't surprise either Dr. Gerald McKenna, current president of the Hawaii Medical Association, or immediate past-president Dr. Philip Hellreich.

"The situation is really dire for a lot of physicians," said Hellreich. He said he has spoken to at least two specialists recently who are planning to relocate. Moreover, in his own long-established practice, Hellreich said he experienced a month in the past year where he did not meet office expenses.

"The image of a physician playing golf a couple of times a week is just not true," he said.

"Hardly anyone I've been speaking to is not feeling the pinch and we'll ending up losing some of our finest doctors," he said.

McKenna agreed.

"I've certainly heard from many doctors having a difficult financial time. They've either had to lay off people or cut back hours. We've had to cut back people's hours in our office and it's not because there isn't plenty of work," he said.

Bill Donahue executive director of Hawaii Independent Physicians Association, another independent group of about 500 doctors said his physician group reported many of the same problems experienced by the doctors surveyed. Moreover, he's not surprised so many physicians took the time to complete the survey.

"It obviously hit a nerve," he said.

"Overhead costs for physicians in Hawaii are among the highest in the nation," Donahue said. "When you combine that with ever-declining insurance reimbursements it's no surprise to hear that doctors are working more hours just to stay even."

The result, he said, is that private practice is becoming less appealing to new medical school graduates.

"You can understand why plans such as [health maintenance organization] Kaiser are attractive. They offer steady income and regular hours," Donahue said.

McKenna agrees with Donahue's assessment.

"More doctors are looking towards working for someone else so they don't have the hassle," he said. "Fewer are looking to go into traditional private practice."

Docs' dough

Questions from a survey sent to doctors in the now-defunct Kapiolani Health:

I find that I have trouble covering some of my monthly expenses:

7% >> Every month

16% >> Less than every month

22% >> Not usually, but I have had at least one difficult month during the last year

41% >> Hasn't happened yet

13% >> I don't think this will happen to me

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