Insights & Advice


Why Primary care doesn’t pay

Primary care in the Berkshires is still in short supply and those that do practice are closing their doors to new patients. That hurts in an area that already has more than its share of the elderly. The situation appears to be getting worse as med school grads opt for more lucrative, well-paying careers as specialists.

The Massachusetts Medical Society found in a new study found that obstetricians and gynecologists (who usually serve as primary care doctors to many women) were also in short supply for the first time in eight years. It also found that recruiting and retaining doctors remains difficult, especially at community hospitals. This is even more disconcerting given Massachusetts’s redoubled effort to persuade doctors to work in rural areas by offering financial incentives and educational loans.

There is an oft-quoted statistic that only 2 % of graduating medical students plan to work in primary care. Given the challenges facing a young doctor in general medicine, who can blame them? Let’s start with the average medical student. Medical school is getting more expensive with the average grad amassing a student loan debt of $140,000. That’s nearly 8% higher than the previous year.

Faced between the average salary for a doctor in family medicine ($80,000/year) and a doctor who specializes in Orthopedic surgery ($436,000/year), for example, is it any wonder that most U.S. students opt for a residency in higher paying specialist fields? What’s worse, primary care doctors work a lot harder. They are the point persons for insurance claims and Medicare forms. They are the front line in taking care of the chronically ill, the elderly and patients with complex diseases. Their days are stressful and time consuming, requiring in many cases, bringing work home at nights and on the weekends.

Then there is the expense of starting a practice. First you will need insurance—four different kinds—malpractice, health, life and disability. Malpractice alone can set you back $40,000 or more a year. Then there’s the office staff. At least 50% of one employee’s time will be dedicated to simply filling out insurance applications for patients in need of surgical procedures, advanced specialists work, etc. You will probably need a nurse or medical assistant and a secretary as well. Salary and benefits for the staff can cost $150,000 or more, not to mention renting a space big enough to house an exam room, office, reception area and a break room. There is also the level of equipment needed. It can be as simple as bare bones syringes and patient gowns to EKG machines, ultrasound or any other office-based equipment depending on the doctor’s level of practice.

The average country doctor is going to need a lot of patients to cover that overhead, at least 30 a day paying over $100 or more, as a guess. That’s about 16 minutes a patient but it is really only half that amount because for every patient an equivalent amount of time is consumed in filling out paperwork, calling back pharmacists, consultants, writing patient letters and other tasks that do not generate income.
In the end there is never enough time with the patient or if there is then the hours the doctor works per day climbs upward. If the doctor also includes maternity care in his practice, then the hours go much higher. Pregnant women do not always deliver during office hours.

I talked to my own primary care physician, Dr. Andrew Shamess of Lenox Internal Medicine. He established his own practice a few years ago and learned first hand the economics of primary care.

“The average income of a primary care doctor in Massachusetts is about $86,000,” he explains. “Why do I do? Because I love it.”

He lamented that most articles about the problems of primary care tend to focus on the young doctor’s educational debt; therefore, most of the solutions revolve around governmental assistance in paying off that debt or reducing the cost of medical education through subsidies.

“Yet, after all is said and done, the government can assist in paying off my loan but a few years down the road, the primary care doctor is still stuck getting paid one quarter of what his colleagues are making as specialists.”

Dr. Schamess believes the key to this puzzle lies in an arcane mechanism called the “resource based relative value scale.” It is the method by which the medical industry evaluates and pays doctors for their work.
“What a system does is exactly what it’s designed to do,” said Pete Senge, the renowned MIT scientist in his book “The Fifth Discipline”.

“Ours is designed to produce as many high-cost procedures as possible with a minimum of thought and doctor-patient communication,” argues Dr. Schamess.

Unless this system is changed, Doctor Schamess believes, a decade from now the primary care universe will shrink even further. To date, nothing in Washington’s health care initiatives address this issue. In my next column, we will explore the problem and its solutions, so stay tuned.

Posted in Macroeconomics, The Retired Advisor