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Ideas and Opinions |

The Primary Care–Specialty Income Gap: Why It Matters

Thomas Bodenheimer, MD; Robert A. Berenson, MD; and Paul Rudolf, MD, JD
[+] Article and Author Information

From University of California, San Francisco, San Francisco, California, and the Urban Institute and Arent Fox, PLLC, Washington, DC.


Potential Financial Conflicts of Interest: Consultancies: P. Rudolf (American College of Physicians, American Geriatrics Society).

Requests for Single Reprints: Thomas Bodenheimer, MD, Building 80-83, San Francisco General Hospital, 1001 Potrero Avenue, San Francisco, CA 94110; e-mail, TBodenheimer@fcm.ucsf.edu.

Current Author Addresses: Dr. Bodenheimer: Building 80-83, San Francisco General Hospital, 1001 Potrero Avenue, San Francisco, CA 94110.

Dr. Berenson: Urban Institute, 2100 M Street NW, Washington, DC 20037.

Dr. Rudolf: Arent Fox, PLLC, 1050 Connecticut Avenue NW, Washington, DC 20036.


Ann Intern Med. 2007;146(4):301-306. doi:10.7326/0003-4819-146-4-200702200-00011
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A large, widening gap exists between the incomes of primary care physicians and those of many specialists. This disparity is important because noncompetitive primary care incomes discourage medical school graduates from choosing primary care careers.

The Resource-Based Relative Value Scale, designed to reduce the inequality between fees for office visits and payment for procedures, failed to prevent the widening primary care–specialty income gap for 4 reasons: 1) The volume of diagnostic and imaging procedures has increased far more rapidly than the volume of office visits, which benefits specialists who perform those procedures; 2) the process of updating fees every 5 years is heavily influenced by the Relative Value Scale Update Committee, which is composed mainly of specialists; 3) Medicare's formula for controlling physician payments penalizes primary care physicians; and 4) private insurers tend to pay for procedures, but not for office visits, at higher levels than those paid by Medicare. Payment reform is essential to guarantee a healthy primary care base to the U.S. health care system.

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To the editor:
Posted on February 21, 2007
Mark Kotowycz
Internal Medicine Resident, McMaster University
Conflict of Interest: None Declared

Bodenheimer, Berenson and Rudolf raise some valid concerns over the growing income gap between primary care physicians and specialists. However, when comparing earnings between the disciplines, comparing yearly salaries is not enough - one also has to take into account the opportunity cost of becoming a specialist. To become an invasive cardiologist, for example, one has to do a three year cardiology residency, a one or two year interventional fellowship, and often a Master's or other degree (for academic positions) in addition to the three-year internal medicine training that is required to become a primary care internist. During these years of extra training, primary care physicians are earning significantly more money and are able to pay off their large student debts faster.

Conflict of Interest:

None declared

primary care-consultant fee gap
Posted on February 24, 2007
Sam F Carter
Murfreesboro Medical Clinic
Conflict of Interest: None Declared

Bodenheimer and colleagues (1) provide much needed illumination of the processes which perpetuate the primary care-specialty income gap.

An additional contributing factor is the large differential in reimbursement between consultations and primary care encounters, which appears unjustified to me and to other physicians (in a variety of specialties) whom I have asked. Consultants are paid substantially more for addressing one problem than referring physicians are for ten. While the consultant is more expert on the referred problem, the referring physician is nearly always more expert on other aspects of the patient's care.

Having served as consultants, my colleagues and I find that comprehensive primary care requires as least as much work, if not more. In both inpatient and outpatient settings, the physician providing comprehensive care, generalist or specialist, is responsible for all of the patient's problems, concerns, and preventive needs. The consultant typically focuses on a narrower range of problems, albeit with the other problems in mind.

Communication does not justify differential reimbursement since it is a two-way process, mostly accomplished by sharing records, sometimes supplemented by phone calls and letters. I work as hard at communicating when I am the referring physician as I do in a consulting role.

Compensation should be based on the number and complexity of problems addressed, not whether the physician sees the patient first or second. It would make more sense to eliminate consultation codes and to create a new code or modifier for complex care, which both generalists and specialists could use when appropriate.

Frank Carter, MD

Murfreesboro Medical Clinic

Murfreesboro, TN 37130

1. Bodenheimer, Berenson, Rudolf. Annals. 2007; 146: 301-306.

Conflict of Interest:

I am a primary care physician (general internist).

Money doesn't solve everything
Posted on February 22, 2007
Edward J. Volpintesta
No Affiliation
Conflict of Interest: None Declared

February 22. 2007

Annals of Interna Medicine (Rapid Response)

Re "The primary care-specialty income gap: why it matters"

The author's comments regarding the payment differential between primary care and specialty care may not be true for all primary care doctors. I have been in practice for over 30 years and if there is one wish I could have granted, it wouldn't be for more pay.

In fact, I would forfeit a pay increase if the mind-numbing administrative work I have to deal with daily could be eliminated. Responding to medicare, medicaid, VNA requests, mail order pharmacy requests, HMO hassles and many others consumes a lot of time; it is distracting and can lead to fatigue, poor judgment, and even medical errors.

In addition, paying for personnel to handle the referrals to HMOs is expensive and wears them down as well. The relentless distractions and the answer "asap" requests that roll out of my fax machine all day long steal from my patients the time and attention that they expect to get from me.

Increase my pay? Sure, but give me my first wish: make my work environment hassle-free.

Edward J. Volpintesta MD

Conflict of Interest:

None declared

Two other points
Posted on March 4, 2007
Charles A Moser
California Pacific Medical Center, San Franciso, CA
Conflict of Interest: None Declared

To the editor:

Dr. Bodenheimer and associates' recent discussion of the income gap between primary care and specialist physicians is excellent, but please allow this primary care physician to make two other points.

First, the authors do not discuss the impact of hospitalists on increasing this gap further. Many physicians, who would go into primary care, instead choose to become hospitalists for the better work hours, controlled lifestyle, and increased remuneration. A considerable percentage of my income is derived from the care of hospital patients, but my colleagues and I have had to fight to keep that income stream from the hospitalists.

The second point is the huge cost in time and overhead that primary care physicians must devote to interacting with insurance companies, HMO's, and government agencies. I often spend more time interacting with these agencies than with the patient. Justifying why a patient needs a procedure (or drug or imaging study) often to a clerk without any medical training is not very satisfying, time consuming, not reimbursed, may lead to a delay in treatment, force the patient to fail a cheaper alternative first, and the responsibility for the patient is still mine.

Sincerely,

Charles Moser, PhD, MD, FACP

Conflict of Interest:

None declared

In Response
Posted on March 22, 2007
William L. Rich, III
Chairman of an AMA Specialty Society Committee
Conflict of Interest: None Declared
I read with interest "The Primary Care-Specialty Income Gap: Why it Matters" in the February 20, 2007 Annals of Internal Medicine. I am compelled to correct a number of statements within this article and set the record straight regarding the American Medical Association (AMA)/Specialty Society RVS Update Committee's (RUC) role in updating the Resource Based Relative Value Scale (RBRVS). I urge you to publish my letter to provide a balanced perspective of this important committee and its efforts to represent all physicians.

RBRVS

The Medicare RBRVS is designed to pay physician services relative to the resources (physician work, practice expense and professional liability insurance) required to provide the service. The authors state that the RBRVS was designed to "lessen the disparity between office visits and procedures provided by specialists." Although not specifically stated by policymakers, conventional wisdom was that the RBRVS would redistribute payments to Evaluation and Management (E/M) services. In fact, the RBRVS has continued to redistribute to E/M, illustrated by the changes in the following services:

ServiceCPT1992 RVU2007 RVU% Change
Colonoscopy453788.485.56-34.43%
Cataract6698430.3417.99-40.71%
Chest x-ray71020-260.340.30-11.76%
Office visit, level 3992131.001.6666.00%
Office visit, level 4992141.522.5265.79%

The authors assert that gastroenterologists are paid more than primary care physicians for similar work effort. In fact, the Medicare payment system precludes specialty pay differentials. A primary care physician is paid the same as a gastroenterologist or any other specialist for the same service, whether an office visit or a colonoscopy. The relative valuation is higher for a colonoscopy than an office visit, as one would expect since the colonoscopy requires greater resources. The authors are incorrect in asserting that the colonoscopy is of similar duration as an office visit. Data published on the Centers for Medicare and Medicaid Services (CMS) website lists the total time for 45378 and 99214 as 70 and 40 minutes, respectively. The intensity of the colonoscopy is also higher.

The RUC

Medicare did not agree "to allow the AMA" to create the RUC. The AMA and national specialty societies chose to exercise their first amendment right to petition the government. Organized medicine created the RUC to serve all physicians, in submitting recommendations to CMS to improve the RBRVS. CMS is the final decision maker, choosing to reject or adopt only a portion of the RUC recommendations, as they did in 1997 when the RUC's recommended increases to E/M were not approved.

The authors incorrectly state that MedPAC criticized the RUC survey process. MedPAC has never publicly critiqued the RUC methodologies used to develop relative values. Rather, MedPAC voiced concern that CMS and the medical community had not identified services that may be overvalued. The RUC has responded directly to this MedPAC concern by creating a Five-Year Review Identification Workgroup, which has already obtained data that will help identify issues to be addressed in future reviews.

The RUC also continues to recommend improvements in practice expense and professional liability insurance valuation, which comprise half of the payment system. The RUC has repeatedly called on CMS to address equipment utilization and other flaws in the practice expense formula that would positively impact payment for E/M.

Five-Year Review of E/M

Although CMS ultimately rejected them, the RUC strongly advocated significant E/M increases in the 1997 Five-Year Review. The decision not to request review of E/M services in 2002 was made by specialty societies representing primary care, not the RUC. These specialties did submit comments in the most recent review. The RUC engaged in an intense review over a period of 14 months (not six as per authors), convening five, face-to-face meetings (not two as per authors) and numerous conference calls. Volunteer physicians from several specialties contributed significant personal time for this review.

This review was contentious and deliberative. The socioeconomic experts who serve on the RUC are intelligent physicians who understand that their recommendations impact the entire community of health professionals. All physicians should have expected that the debate and consideration of E/M valuation would be serious and intense. In the end, the RUC recommended significant increases to E/M which were implemented by CMS on January 1. These permanent increases result in an additional $4.5 billion in E/M payments each year! To imply that they are small and insignificant is preposterous. Family physicians are projected to see their overall Medicare payment rise by 5% or more. Documents on ACP's website state, "ACP estimates that internists will typically see an increase of $5,000 to $10,000 in total Medicare allowable charges."

The increases to E/M services came at a price. The RBRVS is a "budget neutral" system allowing for improvements in valuation for services, but requiring an adjustment across the entire system to compensate for these improvements. These offsets are normally applied to the conversion factor, which is transparent and impacts all health care professionals similarly. Despite protests from the RUC and most medical specialties, CMS chose to instead address budget neutrality through a "work adjuster," impacting those physicians who receive a greater proportion of their payment from their own personal work effort. The authors of this article would have served their primary care constituents better by highlighting the short-sighted CMS decision to change the budget neutrality methodology.

Physicians must remain focused and work together to eliminate the flawed Sustainable Growth Rate formula and declining Medicare payments, so that physicians have the resources to address the care of the chronically ill elderly.

Conflict of Interest:

None declared

Primary care-specialty income gap: In Response
Posted on March 31, 2007
Thomas Bodenheimer
UCSF
Conflict of Interest: None Declared

To the Editors:

We are glad that Dr. Rich has entered into a dialogue about the RUC's role in the multi-factorial causation of the primary care-specialty income gap. He is correct that RVUs for E/M codes have increased while values for some procedural codes have decreased. However, in its 2007 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) states that "The three five-year [RUC] reviews, completed in 1996, 2001, and 2006, led to substantially more recommendations for increases than decreases in the relative values of services, even though many services are likely to become overvalued."[1]

The RUC's methodology for estimating procedure times "“ a key factor determining RVU values "“ is flawed and overvalues many procedural services. Dr. Rich cites the CMS website as indicating that total time for diagnostic colonoscopy is 70 minutes, data that is actually based on RUC estimates. The RUC has also estimated intra-service colonoscopy time at 30 minutes. Yet, a recent New England Journal of Medicine article found that the average diagnostic colonoscopy intra-service time is 13.5 minutes.[2] These findings mirror a study of operative logs for 60 procedures, demonstrating that actual procedure times were on average 31 minutes shorter than the RUC's time estimates on which RVU values are based. The RUC overestimated time spent on several procedures by over 60 minutes.[3] The RUC and CMS should consider using objective data rather than physician-generated estimates to determine procedure times.

Our main concern, and we hope Dr. Rich agrees, is the impact of the primary care-specialty income gap on medical student career choices. If the pipeline into primary care continues to dry up, the decline of primary care will be a catastrophe for everyone, including specialists. Thus we need to look at the bottom line: dollars. In 2007 a colonoscopy pays 196.69, while a 99214 office visit pays $90.20 (amounts vary by location), even though the times spent are similar and "“ we would argue "“ the complex office visit has higher intensity. Moreover, colonoscopies require fewer rather than more resources because they are generally done in a facility in which the physician is not paying overhead costs for personnel and equipment.

Ultimately, we must consider a fundamental change in physician payment, moving from fee-for-service toward a blended payment system that rewards high-quality, team-based primary care practices that are adequately compensated for the challenge of managing an aging population with multiple chronic conditions.[4]

References

1. Medicare Payment Advisory Commission. Report to the Congress. Medicare Payment Policy. Washington DC: MedPAC, March 2007.

2. Barclay RL, Vicari JJ, Doughty AS, et al. Colonoscopic withdrawal times and adenoma detection during screening colonoscopy. N Engl J Med 2006;355:2533-2541.

3. McCall N, Cromwell J, Braun P. Validation of physician survey estimates of surgical time using operating room logs. Med Care Research and Review 2006;63:764-777.

4. Goroll AH, Berenson RA, Schoenbaum SC, Gardner LB. Fundamental reform of payment for adult primary care: comprehensive payment for comprehensive care. J Gen Intern Med 2007;22:410-415.

Conflict of Interest:

None declared

We're Fiddlin' While Rome is Burning
Posted on April 4, 2007
Jay A Gregory, MD, FACS
Muskogee Regional
Conflict of Interest: None Declared

Having read the excellent article by Bodenheimer, et.al, and the several responses, it clearly brings to mind the position of Nero while his Rome was literally burning. Rich gave an excellent overview of the RUC and the RUC process. As a speciality society representative advisor to the RUC, I can say that at any meeting there are decisions that make some happy and some sad. But don't blame the RUC or the specialists on the RUC for your response. Budget Neutrality is the prime cause of most of our concerns. The next point that needs to be made here is that third party payers, including CMS, are aggressively looking to mid-level providers for primary care services. I do not believe that the primary care physicians need to worry about the specialists getting their money, I would worry about PA's and Nurse-Practioniers, etc taking dollars away from the primary care physicaians. I would also suggest to the authors who complain about time spent with Medicare and other Insurance companies: the solution is simple resign from your contracts. You do not need a contract to provide high quality patient care. The entire process of health care payment must be reformed with the patient and their physician in the driver's seat. A fee for service market based appproached where outcomes are transparent to the consumer and physicians are allowed to compete based on qualtiy and service. Why is health care any different than any other service utilized by the general public? We physicians need to stop attacking each other and work together to focus on the true enemies of our profession and stop Fiddlin' While Rome Burns.

Conflict of Interest:

Private Practicing General Surgeon in Rural Oklahoma

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