Assume a business day of 8 hours. For each hour a family/primary care physician can see 3 patients at 20 minutes each. During each 20 minute visit a doctor has to review a patient’s history, listen to the patient’s complaint or reason for the visit, make a clinical diagnosis on how to best treat the patient’s problem, and assess the patient for signs of any other disease process. All this must be carefully notated in the patient’s chart to track progress and to document the visit for insurance purposes and in rare cases, legal actions.
So the doctor sees 24 patient’s in a day. Assume each patient’s insurance is billed $100 for the visit. Of that $100 the doctor’s practice expects to receive (including patient co-pays) $50. 50% of that $50 is kept by the practice to pay for overhead (medical assistants, receptionists, nurse practitioners, building costs etc). That leaves the doctor $25 per patient.
3 patients an hour means $75 hour, and that equals at 2000 hours a year, $150,000. This is a good wage by most standards. The problem is that doctors don’t work 2000 hours.
As well as seeing 24 patients, the doctor is responsible for managing physician assistants and nurse practitioners. He or she is ultimately responsible for the treatments made by these mid-levels and can be held accountable by the medical board and in court for any mistakes they make. This usually means monitoring what the mid-levels are doing, reviewing their charts, and assisting with their treatment options. This supervision is completely unpaid; the doctor is not reimbursed for his or her time.
Throughout the day test and lab results from current patients arrive on the doctor’s desk. S/he must review these and sign-off on them, adjusting medications or marking for follow-ups as needed. This work is unpaid.
Each refill request made by a patient must be reviewed and signed off by the doctor. He or she is not paid for this work.
20 minutes is not enough time to adequately document a patient’s chart. A doctor will often make quick notes during the patient visit and complete the chart after visiting hours. Charts for those with complex problems and chronic conditions can take upwards of 30-60 minutes to document each visit – all done for free.
When all is said and done, a doctor will spend 8 hours with patients and an additional 4 hours on unpaid tasks, resulting in a 12 hour day. 12 hour days result in working 3000 hours a year*. At $150,000 year (the extreme high end of PCP salaries by the way – the average is more like $125,000), that’s $50 an hour. This is still a good wage, but to receive it a doctor must have done the following:
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- Received a 4 year degree.
- Applied to and been accepted to a medical school program. This process is highly competitive and takes at least a year. There is another year delay between acceptance into medical school and actual attendance.
- Graduated medical school in 4 years.
- Completed a 1 year internship.
- Completed a 2-3 year residency.
It is impossible to work during medical school, so those 4 years of lifetime earnings are lost. During internship and residency, doctors earn $30-35k year. Although the 80 hour week is officially frowned upon by residency programs, interns and residents continue to work these hours. For argument’s sake let’s assume a 60 hour week at $30,000. That’s $10/hour for the first 3 or 4 years of work. In my area cashiers at Wal-mart earn that, do not work more than 40 hours/week and do not have to worry about making a mistake that kills someone.
The average undergraduate finishes college with $23,200 of student loan debt. The cost of applying to medical school, something that isn’t often mentioned, is significant. Figure an additional $5-10k for school applications and interviews, MCAT test and prep, and travel. The average medical school debt is $156,456 – but this assumes the loan amount is paid back immediately upon graduation. No intern working 60 hours a week for $10 an hour can afford to pay that loan back, so the loan is capitalized during residency and soars. That $180,000 in student loan debt can quickly become $300,000 after interest is incurred during the loan forbearance. Student loan repayments are also taxed**, meaning that a physician earning $150,000 will pay 28% tax on his or her loan payments. He or is she is paying $5,600 to the IRS as well as $20,000 a year to the student loan servicing firm, thereby turning that $300,000 loan into a $384,000 one after taxes.
Just for kicks, let’s figure that into our $150,000 salary. So let’s assume loan payments of $20k yearly.
Salary***: $150,000
Taxes: -$42,000 (28% bracket – Federal only)
FICA: -$8,796 (6.2% on $106,800 + 1.45% on $150,000)
Loans: -$20,000
Total: $79,204
And remember: that’s for 12 hour days – not 8.
One would do better as a plumber or in a slew of clerical and office jobs.
And politicians wonder why there aren’t more primary care physicians?
Anything that is free will be abused; therefore the non-patient unpaid activities by primary care physicians have exploded because there is nothing to keep them in check. Patients will not accept charges by a doctor for paperwork or prescription refills, and most doctors aren’t willing to pass on this cost directly to their patients anyway. Likewise insurance companies refuse to pay for the time spent doing paperwork viewing this as part of the original bill; yet insurance companies and Medicaid/Medicare routinely audit charges and payments made to providers, basing payment solely on the time spent with a patient and the clinical diagnosis of the ailment. Anything that strays from the norms set by the insurance company or Medicaid/Medicare auditor is immediately flagged for fraud and the practice is subject to penalty.
This raises another issue with reimbursement: Medicine is the only business where the consumer (the insurer) sets the price for the services provided. If one goes to a salon for a haircut, one does not decide the fee the stylist receives; if one did it would be expected that he or she would pay as little as possible for the service. Doctors may bill for a procedure, but the insurer can pay whatever it believes fair. Doctors are forced to accept the payment and bill the patient for the amount not covered by insurance, or stop accepting insurance from the insurer. This is difficult to do with most private insurers, and illegal with Medicaid and Medicare.
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*I forgot to include after hours call. Call schedules can vary from practice to practice, with some practices requiring a physician to cover a week of phone calls every month or two to as much as once every four days demanding in-person hospital admissions. This time too is unpaid but has been left out of this analysis due to the lack of available statistics.
**Student loan interest is tax deductible only up to a cutoff of $75k or so, well below the salaries earned by PCPs.
***Primary Care Physicians are increasingly paid using RVU’s, a system formulated by Medicare and followed by many insurance providers and healthcare systems. In a nutshell this system is a productivity based system in which doctors are paid by the complexity of the visit, the skill treatment requires, and the time expected for treatment as determined by the insurer NOT the provider. Salary is commensurate with the number of RVU’s a physician bills for during a given month minus practice overhead (overhead averages 50-75%). The RVU system requires a doctor to meet his or her RVU quota in order to obtain his or her agreed upon salary; if he or she fails to meet that quota, he or she receives less than that salary.
In this respect physicians are paid more like hourly wage workers whose pay packet directly correlates to the time spent on the job. Work less and one is paid less. Similarly a physician can see fewer patients, but will receive a smaller paycheck at the end of the month.
A doctor might rationalize spending 10 minutes more per patient, believing that the time is necessary to provide decent care. This extra 10 minutes per patient lowers a doctor’s productivity by a third, and ultimately results in a similar-sized hit to his or her paycheck – bringing it down in our above example from $150k to $100k. A doctor might also take a different tact, spending 10 minutes less with each patient in order to increase his productivity by seeing 6 patients instead of 3 per hour. The problem is that the short visit limits the number of RVUs he can bill for that visit. Attempts to bill a 10 minute visit as a 20 minute visit constitute fraud and may result in criminal prosecution or loss of license. Less time spent per patient can indeed result in a higher salary but open the physician up to missed or improper diagnoses and treatments that could result in poor patient outcomes and possible legal action.
