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Physicians Don’t Profit From Tests And Prescriptions

Physicians don’t make money from the tests, prescriptions, procedures and admissions they order, according to a new survey by the staffing and technology company Jackson Healthcare. At most, 6.2% of physicians’ total compensation comes from the doctor’s orders, the survey reported.

Direct income from medical orders comprised:
–0.5% from charges from prescriptions,
–1.0% from charges from lab tests,
–1.1% from charges associated with hospital admission,
–1.3% from charges associated with facility fees for surgeries, and
–2.3% from charges from diagnostic imaging.

The survey of 1,512 physicians challenged claims that physicians won’t stop practicing defensive medicine because they profit from their medical orders, the company stated in a press release.

“Many outside the industry believe that physicians make a lot of money on the tests, prescriptions, procedures and admissions they order,” said Richard Jackson, chairman and CEO of Jackson Healthcare. “The reality is that most (82%) do not make any money from their orders. For the remaining that do, it constitutes a fraction of their total compensation.”

Mr. Jackson cited the Stark Law, which he said makes it very difficult for physicians to profit from their medical referrals and orders. Also, the trend of new physicians choosing employment over independent practice plays a role.

“There are two primary reasons physicians order tests and treatments they consider medically unnecessary,” said Mr. Jackson in the release. “They are personally financially liable for patient awards and they want to avoid the hassles of going to court.”

*This blog post was originally published at ACP Internist*


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One Response to “Physicians Don’t Profit From Tests And Prescriptions”

  1. The Medical Contrarian says:

    This piece looks at this issue from a narrow perspective. While most MDs do not directly profit from tests and prescriptions (there are exceptions), prescriptions and tests enhance the profitability of all medical practice because they enhance the use of physician time. You can try to explain why doing nothing is the best course or you can order a test and/or a drug. The former requires explanation, understanding of nuance, and time. Lots of time.

    The latter can be dispatched with less time. I will check this test and take this pill. See you next week/month.

    Time is money.

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