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Medical costs "skyrocket" despite malpractice reforms; cause is not legal system

An analysis of medical expense costs was published by Elisabeth Rosenthal on January 18 of this year.  Ms. Rosenthal reported on the source of increased medical insurance premiums (which will rise at about ten times the rate of inflation again this year) and underlying health care costs.  She pointed out that the primary explanation remains the fee for service medical compensation system and many doctors' continuing approach of "leaving no dollar on the table."  The description by a prior author--not Rosenthal.

Rosenthal pointed out that the incomes of many specialists, including dermatologists, gastroenterologists and oncologists more than doubled between 1995 and 2012, even after adjusting for inflation.  The income of primary care physicians increased by only ten percent during that period. She noted that dermatologists' income was roughly equivalent to internists' income in 1985, but now averages $471,555.00 per year, according to the Medical Group Management Association. The Association describes dermatologists' workload as "one of the lightest."  Even these inflated incomes often do not reflect that ancillary income earned by physicians through fees for lab tests, sales of related supplies and services, and even investment in hospitals and ambulatory surgery centers. 

Rosenthal cited figures that confirm that specialists routinely earn two to four times the income of primary care doctors in the United States.  According to Miriam Laugesen, a professor at Columbia University's School of Public Health, this earning gap is found in no other developed country and helps to explain why there is a shortage of primary care doctors, yet only 25% of recent graduates chose to practice primary care. 

Rosenthal cited experts who point out that many specialist services are overused and overpriced, identifying the Mohs skin cancer surgery as an example:  Use of the surgery has increased 400% in a decade and it has now been listed as  "potentially misvalued" by Medicare. Rosenthal identified one patient who incurred a $25,000.00 bill for her 30 minute afternoon, outpatient surgery to remove a non-life-threatening growth [not a melanoma] that was closed with a "couple of stitches." Definitive proof that the procedure was not available because the doctor did not photograph the miniscule lesion pre-surgery:  the dermatologists' lobby in Washington continues to fight to prevent rules that would require preservation of a pre-surgical photograph.

Rosenthal quoted the AMerican Medical Group Association's figures reflecting incomes of more than $350,000.00 annually for most specialty physicians and confirming that some specialists like urologists derive almost 50% of their income from "investing in the machines that deliver radiation for prostate cancer or treat kidney stones."  Similarly, oncologists are reported by the MGMA to earn almost 2/3 of their $350,000.00 annual income from the retail cost of chemotherapy they administer.

Rosenthal also pointed out that authorities within the medical profession find little correlation between  physician compensation and time requirements or other measurements of a demanding occupation.  She notes that most physicians identify obstetrics as carrying perhaps the most rigorous and difficult working conditions, yet obstetricians are (relatively speaking) modest earners for doctors.  Eighty percent of dermatologists report seeing patients 40 hours per week or fewer, according to a Medscape survey from 2013.

Not surprisingly, lobbying activities in Washington and state capitals closely parallel these highest-paid specialities.  More than 750 lobbyists for medical specialty groups are registered in Washington, D.C., and they report spending approximatley $80 million dollars per year on lobbying. Rosenthal traced part of the compensation and cost problem to the fact that primary care doctors make up only 12% of total physicians and thus have little clout in the committee that advises Medicare--behind closed doors--on the AMA's Relative Value Scale Update Committee.  Only 5 of the 26 participating specialty representatives are in primary care. 

Dr. Steven Schroeder, a professor at the University of California, explained that income is often determined not by the effort or knowledge involved, but rather by how certain specialists can "monetize" treatment.  The Mohs procedure is an excellent example, and the specialists involved have successfully prevented the government and insurers from regulating the procedure to protect patients and their wallets from abusive practices.

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