‘You Make So Much Money’ … Or Do You?

‘You Make So Much Money’ … Or Do You?

The Centers for Medicare and Medicaid Services (CMS) recently released Medicare physician payment data. As the pundits, the press, and analysts pore through the data, it reminds me of the need for context and, yes, the devilish details.

I once had an attorney tell me I obviously made too much money. Of course, this was as she was leaving our primary care office visit and I thought we were done. I stopped, sighed (internally), recalled my prior year income filing with the IRS, reflected on the fact that this year’s would probably be even less, and asked, “What makes you say that?” She continued: “You charge $65 an office visit, it says so on your bills, and you see about four patients an hour, so you make over $260 an hour, counting all the extra stuff you charge for. I only charge half that. So you make too much money.”

I see how you could come to that conclusion. Simple math, right? So I asked some straightforward questions.

“Were you aware that not one single insurer pays me the charge on the bill? Every single one pays much less, most close to half that and less than a third for Medicaid.

“How many staff did you see at the desk? Two receptionists to handle phone calls and check people in and out and collect co-pays and deductibles. A medical assistant to bring people into the room, check blood pressures, and do other clinical tasks. You don’t see my biller, she’s in the basement, nor my records technician, who makes sure all the information coming in gets scanned and entered into the EHR, nor the person in a back room who sits on the phone all day and does paperwork required for insurance authorizations, forms, and all the non-clinical stuff that comes with running a practice. Oh, and the office manager, who does all the tasks that anyone else is behind on, as well as managing the staff, payroll, health insurance, accounts, ordering, etc. For every provider in this office, we have about 3.3 full-time employees. How many employees do you have in your office?

“Do you know how much that little thingy I look in your ear with costs? The exam table? The paper for the exam table, and those nice cloth gowns we give you?

“Or that my overpaid job included being on call and available 24 hours every third day and every third weekend (with two associates at the time.) Not counting the 2½ years after I started the practice solo when I was on call 24/7/365.”

“Oh, and all those extra things you say I make money on? The money I get for shots looks like a lot, but when you subtract the cost of the vaccine, the time it takes for the medical assistant to draw it up and the cost of the syringe, needle, disposal of sharp nasty things in an OSHA compliant way, we actually lose money on every shot, even though you see money flowing in the form of payment.

“As an attorney, you have a desk, a PC, a receptionist, and one consulting room. We have three for every provider, each of which has to have a PC, exam table, and instruments. We haven’t even discussed the one room with the power table we use for procedures on older folks who can’t scoot onto a normal exam table. Do you have any idea what that costs to buy and maintain that alone?

“Let’s not count the fact that I don’t always see four patients an hour, and three 20-minute visits actually pay less than four 15-minute visits.”

I didn’t bother telling her that we actually lose money on some of the “expensive procedures” we do because the cost of the equipment, cleaning time, etc., costs us more than we were reimbursed. But at that time, we did them anyway because it was the right thing to do.

I did, however, remind her that our malpractice bill was about $10 for every office hour, and that along with rent and everything else had to be paid in order to see a single patient.

Money in does not equal money in a physician’s pocket

Let’s pause for a second here. Most physicians are not poor, so I’m not going to say collectively we don’t make any money. But before you draw conclusions about anything, look carefully at the facts. Don’t just look at what a payer pays, but also look at your expenses.

Money in does not equal money in a physician’s pocket. Of all the specialties, primary care is the lowest-paid specialty, and that’s what drove me out of primary care and into administration, where I fight to fix that issue.

As my physician son says: “You always worked too hard and never made enough money.” He went into surgery, but that’s another story.

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