Study: Pay to Primary-Care Doctors Driving Higher Healthcare Costs

September 9, 2011
Aubrey Westgate

A recently unveiled study published in Health Affairs could help fuel the argument that physician fees should be on the chopping block.

As the federal government searches for ways to cut healthcare spending, a recently unveiled study published in Health Affairs could help fuel the argument that physician fees should be on the chopping block. 

Researchers at Columbia University say fees paid to physicians for services are higher in the U.S. than in at least five other countries; and they say this is a key reason U.S. healthcare spending is so much higher.

“With the recession we have right now, there are a lot of questions about whether physician fees can continue to go up at the pace they have,” the study’s lead author Miriam J. Laugesen, an assistant professor of health policy and management at the Mailman School of Public Health at Columbia University, told MSNBC. “We can’t say what is the right amount to pay. But we can certainly shed some light on what is going on.”

Laugesen and her colleagues say primary-care doctors in the U.S. are paid an average 27 percent more by Medicare and 70 percent more by private insurers than primary-care physicians in Australia, Canada, France, Germany, and the U.K.

In addition, when the researchers compared medical school costs, practice overhead, and fees for services in the U.S. to other countries, they concluded that the higher fees were the “main drivers of higher U.S. [healthcare] spending.”

Daniel Polsky, a professor of medicine and healthcare management at the University of Pennsylvania, says the study raises serious questions about physician fee levels in the U.S.

“A lot of people think that to fix [healthcare] we need to do less care - that we’re just doing too much,” he told MSNBC. “What this study suggests is that it’s not about how much we’re doing, but about how much we’re paying for what we’re doing.”

But while fee reductions could help decrease spending, they could also bring about disastrous consequences.

The study was released just one week after healthcare organizations voiced concerns regarding the 2012 Medicare Physician Fee Schedule, which includes a possible 30 percent cut to Medicare services.

Such a cut could lead physicians to treat fewer Medicare and Medicaid patients, AAFP President Roland Goertz, MD, told Physicians Practice recently.

“You may have a situation where access not only becomes hard for the Medicare recipient, you may have access be taken away from everybody because there’s no financially good model to make it work when a practice sustains 32 percent reductions in payments for 50 percent of what they do,” he said.

Fee cuts (especially those targeted at primary-care physicians) could also exacerbate the widening compensation gap between primary-care physicians and specialists. And, if that gap widens further, more and more medical students are likely to pursue specialty careers rather than preventive medicine.

In fact, according to MedPage Today, the Columbia University study found the compensation gap between primary-care physicians and specialists is larger in the U.S. than in any other country.