My Take: The Medicare Physician Database

 

In 1994, I wrote 99 Questions You Should Ask Your Doctor and Why having observed my dad’s journey through a two week medical ordeal involving heart bypass surgery. I asked him lots of questions, and queried his clinicians just as fervently. But answers weren’t readily available, and neither my dad nor his physicians were especially keen to engage.

The medical profession is rightfully proud it is highly regarded. It is equally defensive about its errors and bad actors and especially sensitive about its finances. Thus, since 1979, data about how much physicians bill Medicare has been kept out of public view until last Wednesday. HHS headlined its news release to punctuate the significance:  “Historic release of data gives consumers unprecedented transparency on the medical services physicians provide and how much they are paid” (HHS.gov, April 9, 2014)

Media attention has been intense: some examples…

  • “Sliver of Medicare Doctors Get Lions Share of Payouts” (New York Times April 8)
  • “Doctors’ Medicare Pay Revealed” (USA Today April 8)
  • “Data Uncover Nation’s Top Billers” (Washington Post April 8)
  • “Coming Soon: More Ways to Get to Know Your Doctor” (Los Angeles Times April 8)
  • “Looking under the Hood of Medicare” (USA Today May 9)
  • “Small Slice of Doctors Account for Big Chunk of Medicare Cuts” (Wall Street Journal April 9)
  • “Medicare Pulls back the Curtains on How Much it Pays Doctors (NPR April 9)
  • “Top Paid Doctors Say They have Reasons” (ABC News April 9)
  • “The top 10 Medicare billers explain why they charged $121M in one year” (Washington Post April 9)
  • “Seven Doctors got more than $10M each from Medicare in 2012” (USA Today April 10)
  • “Find out How Much Your Doctor Makes from Medicare” (Cleveland Plain Dealer April 10)
  • “The Medicare Data Pitfalls” (New York Times April 10)
  • “A needed look into the cost of Medicare” (Washington Post Editorial April 12, 2014)
  • “What Doctors Make from Medicare” (Bloomberg Business Week April 14)

What have we learned from this data? 

  • Physicians receive 30.6% of what they charge to Medicare, but this range is wide: Total charges: $252.4 billion; total payout to doctors $77.4 billion) Reimbursement rates vary widely by a practitioners license and specialty: public health agencies/clinics (94%, mass immunization specialists (92%) and slide preparation facilities (91%) fare best versus anesthesiologists (15%) and nurse anesthetists (13%)
  • High volume services and drugs are the biggest costs to Medicare: The most frequent procedures/services billed were ambulance mileage (138 mil), simple office visit (99 mil) contrast agent for radiology procedures (86 mil) and moderately complex office visits (84 mil). The most expensive treatments: provenge prostate cancer treatment ($25,730/case), Humate-P hemophilia treatment ($25,695/case), blood clotting ($22,556/case), implantable device for pain management ($12,701/case) and stent placement including angioplasty ($8510/case)
  • There are significant differences between physicians for whom Medicare is a primary payer and the rest: The highest 2% of physicians who bill Medicare represents 24% of total payments to physicians ($77 billion);  the lowest 75% of physicians accounted for 24% of expenditures.
  • The data must be understood in context: for example, payments to 17000 ophthalmologists (the biggest payout specialty) includes costs for injectable drugs (Generic:Ranibizumab/Branded: Lucentis) used monthly in procedures like age-related macular degeneration. The data covers 89 different groupings of physicians—the variability in Medicare payments is wide and much that would need to be understood about practice settings, subspecialization, in-office activity et al is unknown.

But the bigger question is this: does this data matter? What is its impact? Here’s my take:

1-Americans are fascinated by their physicians. Three generations of TV viewers have watched the professional and personal heroics of Marcus Welby, MD, Milburn Stone (Gunsmoke), Ben Casey, Doogie Houser, Dr. Jane, Medicine Woman and many others.  There is a strong appetite for information about physicians. Social networking is replacing word of mouth as the primary channel through which consumers compare notes about clinicians, and there’s no shortage of data to augment their impressions.

2-The Medicare database paints an incomplete picture. For starters, these data reflect Medicare billings, not billings to private health insurers, Medicaid and others, nor income from investments in surgery centers, diagnostic imaging facilities and other passive income sources. The data is accurate but incomplete.

3-Tighter scrutiny of physician business dealings is certain. A central theme in the Affordable Care Act is transparency. Increased limitations on physician self-referrals, changes in the Physician Quality Reporting System, required reporting about drug and device inducements (Physician Payment Sunshine Act), anti-fraud provisions and other features of the law make clear that physician practice patterns will be more closely regulated. In addition, peer reviewed medical journals now require disclosures of author conflicts of interest, and Congress is interested in relationships between by drug and device manufacturers and hospitals and physicians (Group purchasing organizations, Physician Owned Distribution organizations and others).

Question #11 in my ’94 book was “How much money do you make?” Obviously, a bit tongue-in-cheek because most consumers would not be inclined to ask the question though it’s top of mind frequently. I wrote: “Are doctors overpaid? Probably not.  As highly educated professionals who work over 60 hours per week, their income is in line with salaries in the marketplace. The case could be made that primary care doctors, currently at the bottom of the pay scale for physicians, are underpaid in terms of their strategic value to the future of healthcare. Most physicians are in the medical profession primarily because they want to help patients achieve optimal health, and they receive the psychological and social rewards that go with that role. But there is no denying the secondary reason: they want to make as much money as they can, and the medical profession is a good way to do that”. (p.48).

The Medicare database feeds our collective curiosity about the medical profession. Though flawed, it’s likely to add a dimension to the transparency debate in healthcare, and further frustrate principled medical professionals for whom their job is a calling.

In the modern era of U.S. healthcare, medicine has played a central role. That’s not likely to change, but the level of scrutiny about how the role is played will intensify as the business dealings and clinical performance of its members is in the spotlight.

Paul

PS: Many Americans will race to the post office to file tax returns tomorrow. We should be reminded that 28.5% of the federal government’s spending is health care: Medicaid, Medicare, Federal Employee Health and others. Add to that 21% of the average state’s spend for its share of Medicaid, state employee benefits and others. Taxes and healthcare expenditures are inextricably linked. Another reason to anticipate healthcare is no longer a topic reserved for those who are sick, their caregivers and insurers. It’s main street. It impacts everyone directly.

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1-Keckley, Paul 99 Questions You Should Ask Your Doctor and Why Nashville: Rutledge Hill Press, 1994.