DOCTOR FEATURE: BUSINESS – THE BOTTOM LINE

DOCTOR FEATURE: BUSINESS – THE BOTTOM LINE

Overview

Physician Income Rising, along with Debt, According to Medscape Data

Physician incomes are rising, but so is debt, according to two of the latest Medscape surveys.  Some doctors carry debt into the 40s and beyond.  “The amount of debt that physicians carry from medical school has become enormous.  Their debt was often larger than a mortgage payment.  This is certainly true for myself,” says Dr. Sergio Seoane, president of the Polk County Medical Association.

“They’re having to give up autonomy and become either part of a hospital, multi-specialty clinic or a large single specialty group in order to keep up with inflation,” says Dr. Chris Pittman, board manager of the Tampa Bay Integrated Healthcare Network, a physician-led Clinically Integrated Network (CIN) in the Tampa Bay area.  “Consumable costs to deliver care have gone up.”

Physicians receive a small portion of the healthcare dollar, so they are not the recipients of the wealth, he says.  “Everybody gets wealthier in healthcare, except the physician or the people who provide the care,” notes Dr. Pittman, chief executive officer and chief medical officer of Tampa’s Vein911.

The Medscape Physician Compensation Report 2017 shows doctor’s annual incomes have risen from $206,000 in 2011 to $294,000 in 2017.  But not everyone agrees with the numbers.  “From the physicians I know in our community and around the country, I don’t see any evidence that physician incomes are rising.  In fact, physician income has remained stagnant for the past 10 or 15 years,” says Dr. Seoane, a family practitioner in Lakeland. “. . . Compared to incomes 20 or 30 years ago, their incomes are actually less.”

Dr. Pittman adds that “what you make and what you keep are two different things.”  Some 24 percent of physicians between 45 and 49 are still paying off school loans, according to Physician Debt and Net Worth Report 2016, the latest available report as of April 25.  The report notes medical school debt has grown faster than the Consumer Price Index, climbing by 6.3 percent since 1992.  The CPI has grown 2.5 percent.

Julie Fresne, director of student and resident debt management for the Washington, D.C.-based Association for American Medical Colleges, a non-profit working to transform American healthcare, says med school cost is rising at a greater rate than debt.  “It is a lot of money [for med school].  Some of the repayment plans now virtually guarantee they will have a manageable payment,” she says.

Those interested in repayment options should check with the AAMC at students-residents.aamc.org/financial-aid/.  “We have absolutely everything they should want to know about repaying,” she adds.  “The biggest thing is to make sure they budget and only borrow what they need.”

In an apparent effort to boost earnings, physicians appear to be participating in networks in greater degrees.  The Medscape compensation report notes a “sharp upward trend” in the rate of participation in accountable care organizations, with participation climbing from 3 percent in 2012 to 36 percent in 2017.

“This is because market forces have forced physicians from traditional fee-for-service, and economic forces has forced them to join accountable care organizations,” Dr. Seoane observes.  “The whole point of accountable care organizations is essentially a super-duper HMO on steroids.  You get paid to do less and not to order tests.  Is this better?  It may be better for the insurance companies and the federal government; it certainly is not better for the patients.”

“We are paid based on how much money we saved the payor year after year,” says Dr. Pittman, a member of the Florida Medical Association’s Board of Governors.  “That’s where medicine is heading . . . To not embrace the new payment model is foolhardy.”

Bundled payments, or set fees for services like hip or knee replacements, also are growing, according to Dr. Pittman.  “That’s the future of medicine,” he says.

As might be expected, the Medscape data shows net worth tends to increase with age until 65 and above, when 11 percent continue to have less than $500,000 in assets.  Seventeen percent of those 70 and older were worth more than $5 million; another 38 percent in that age bracket were worth between $2 and $5 million.

The bulk of physicians, 60 percent, live below their means and an additional 10 percent live within their means, the 2016 report shows.  Like those in other professions, the typical physician hasn’t been saving enough for retirement, Dr. Pittman shares.  “If you go into medicine to be rich, you’re going to be extremely unhappy,” he asserts.

In Florida, the number of “active, licensed, and practicing” doctors grew from 37,860 in 2008-2009 to 45,746 in 2015-2016, according to Florida Health’s 2016 Physician Workforce Report issued in November.  The population grew 5.9 percent.

“Nearly two-thirds (28,214 or 61.7 percent) of physicians are 50 years of age and older.  In all but three of the fourteen specialty categories examined, more than 30 percent of physicians are 60 years of age and older,” the report states.

Physicians are more likely to be in metropolitan areas; the doctors that work in rural areas are more likely primary care practitioners, it notes.  The workforce in Florida has become more racially diverse, although nearly half are white males at least 50 years old.

“Nearly two-thirds (27,932 or 61.1 percent) of physicians work in an office practice setting, while the remaining physicians practice at a hospital (11,731 or 25.6 percent) or in other settings (6,083 or 13.3 percent),” the report notes.

What Dr. Seoane has witnessed is a decline in private practitioners.  “In Florida, there are very few physicians in private practice compared to 15 years ago,” he explains.  “The specialties that are in private practice that can survive are generally specialties that are very procedural oriented such as dermatology and ophthalmology.  Cardiology and gastroenterology are struggling in our community.”

Internal medicine and family doctors have been squeezed out.  “In essence, there are no longer any internal medicine or family medicine physicians that are in solo or small group practices in Polk County,” he asserts.  “They can no longer afford to be in business.  They are now employees of large multi-million-dollar healthcare corporations.”

Administrative burdens have taken away some of the joys of being a doctor.  “They all love medicine and their patients, but the administrative burdens that are placed on them by the federal government, Medicare, Medicaid, and insurance companies have become overwhelming,” Dr. Seoane says, which has played a part in the current increasing trend of practicing at a larger healthcare corporation or specialist group.

Polk County logged 975 physicians in 2016, 163 in internal medicine, and 164 in the “other” category.  There were between 10 and 20 physicians per 10,000 people in the 2015-16 state survey, including some 30 and 50 percent in primary care.  The 2016 state report also shows that between .1 and 15 percent were planning to retire within five years.

CREDIT

by CHERYL ROGERS

 

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