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Will Cutting Doctor Salaries Improve Healthcare’s Bottom Line?

My friend and fellow blogger Dr. Kevin Pho just published an op-ed in USA Today explaining why cutting physician salaries will not reduce healthcare spending. Here is an excerpt:

The number of physicians who do not accept new Medicare patients is dramatic; in states like Texas, this number can exceed 40%. No wonder, as Medicare pays less than half of doctors’ fees. This scenario comes as a record number of Boomers approach Medicare age.

Those without Medicare are not spared the consequences. Seniors sometimes delay their care, leading to expensive treatment in the emergency department. Doctors who lose money seeing Medicare patients could pass on the costs to the privately insured.

According to the Kaiser Family Foundation, there are more significant drivers of health costs, including new prescription drugs, technology and administrative needs. Princeton economist Uwe Reinhardt estimates that physicians’ take-home pay represents roughly 10% of national health care spending. Cutting physician pay by 20% would only reduce spending by 2%.

I’ve also blogged about the plight of primary care physicians – as their salaries do not allow them to meet their high overhead costs.

As decreases in Medicare reimbursements begin to make it impossible for small practices to afford their supplies, rent, and coding and billing staff, more physicians will simply stop accepting Medicare patients. This means that the taxes that Baby Boomers have been paying all their lives will essentially not result in a guarantee of good medical coverage in their retirement. They may need to pay out-of-pocket to purchase additional insurance or to have a good primary care physician available to them 24-7.

Concierge practices like Alan Dappen’s may fill a gap in care. With full price transparency, availability via email and phone 24 hours a day, 7 days a week, house calls, and affordable fees – savvy patients will realize that his services are well worth the small out-of-pocket expense (on average, his patients spend $300/year on his services).

What’s my bottom line? I think we all need to save as much as we can of our own personal funds in case government programs do not provide us with adequate health coverage in our futures. At least if we grow our own healthcare nest egg, we’ll have more care choices in the future. And those choices may one day be a matter of life and death.

This post originally appeared on Dr. Val’s blog at

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One Response to “Will Cutting Doctor Salaries Improve Healthcare’s Bottom Line?”

  1. Dr. Scherger says:

    Yes, cutting doctor’s payments just drives more patients into Emergency Room at much higher cost to all of us.  We need intelligent management of Medicare to create efficiencies, lower costs and improve quality.  They would come from paying doctors well for doing a great job with patients.  Some my like my editorial on this topic from the San Diego Physician:{2246CA5C-0E62-45D2-B736-9A9D35AFFAF9}/SDP200807scherger.pdf

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