It's Hard to See Doctors Favoring Less Pay, Care, More Paperwork

Published by the Omaha World-Herald May 20, 2008

Nearly six in ten U.S. doctors say they now favor legislation to establish national health insurance, according to a new survey, but doctors may be a bit less enthusiastic if they knew more about where such a system would take us.

Touted as the “largest survey ever conducted among doctors on the issue of health care financing reform,” the results were published in the prestigious Annals of Internal Medicine and have since garnered a great deal of media attention.  The nationwide survey queried 2,200 physicians and was conducted by the Indiana University School of Medicine's Center for Health Policy and Professionalism Research.

Those who want a bigger role for government in our health sector quickly cited the findings as proof that the nation is ready for the kind of health sector overhaul that Sens. Barack Obama and Hillary Clinton are offering in their Democratic presidential primary campaigns.

Doctors have traditionally been prominent critics of a government-dominated system of health insurance, fearing that the bureaucracy would damage the doctor-patient relationship.  Could this apparent change of heart mean that their frustration with the current system has reached a tipping point and they see the only solution as more government?

Not so fast. The survey doesn’t tell the whole story.

Certainly the goal of health insurance for everyone is important.  But how we get there is crucial.  The survey didn’t ask doctors whether they would support national health insurance if it meant a massive pay cut for them, which is a stark reality government health insurance plans.

In the United States, the average physician makes between $200,000 and $300,000 a year. His or her European counterpart makes much less than half of that.1In France, the average physician makes $116,077. In Italy, the average doctor makes $81,414, and in Germany, just $56,455.2

In other words, U.S. doctors would surely face a huge pay cut if government were in control of as much of the health sector as it does in other developed countries.

Why the pay discrepancy between the U.S. and these other countries? Because in these other systems, government — not the market — determines how much doctors get paid. How valuable patients find a particular procedure, treatment, or specialty is irrelevant.

That has implications for both doctors and patients. Every year, the British government cancels up to 100,000 operations, largely because of a shortage of doctors, nurses, and operating rooms.

In Canada, doctors are leaving en masse, with many complaining about their low pay and high frustration levels, with bureaucracy getting in the way of patient care. Over the last decade, nearly 10 percent of physicians trained in Canada came to the United States to practice.

Even here at home in our own government-run health programs, cost-cutting is the rule  not the exception. This spring, Medicare is slated to cut payments to doctors by 10 percent. Never mind the fact that physicians’ expenses – thanks partially to medical malpractice premiums – continue to rise.  Physicians groups are spending millions of dollars on lobbying just to convince Congress to keep Medicare payments where they are. 

The next step after setting prices is for government to decide what drugs, medical procedures, and other treatments will be available – or not. That’s why the survey should have asked physicians if they would support national health insurance if they understood that it would mean a pay cut for them and rationing of medicines and of care for their patients.

Take prescription drugs, for example. Governments with national health insurance programs generally set their payments for pharmaceuticals below their fair market value. That means there’s less financial incentive for the companies to develop new treatments.  Europe’s pharmaceutical research industry is a shadow of its past vibrancy, largely because price controls and restrictions on access to new medicines leave little to pay for research. 

And access to new drugs suffers as well.  While 85 new drugs were introduced in the United States between 1998 and 2002, just 48 new drugs made it to the market in Europe during that time. 

The British government has been particularly heavy-handed in its restrictions on life-saving, but expensive, medications. For example, it has drastically limited access to Herceptin, a breakthrough cancer drug, and Aricept, an Alzheimer’s treatment popular in the U.S.

Government-run anything also entails plenty of paperwork. Most nationalized health insurance plans have saddled physicians with the bulk of the administrative tasks. Case in point: In 1975, the average Swedish doctor consulted nine patients per day. Now, it’s just four, largely because doctors spend an estimated 80 percent of their workdays handling paperwork.

American physicians are no strangers to government-imposed logistical nightmares. Medicare is directed by an astonishing 110,000 pages of rules and regulations. Many doctors have simply started to refuse to treat patients on public health insurance plans because the process they have to go through to get reimbursed is so time-consuming and costly.  A national health insurance system would mean doctors would have nowhere else to go.

So when we hear that nearly six in ten doctors support national health insurance, that most likely means that the other four in ten know enough to be concerned.  Physicians should take a closer look at the issue before buying into a bargain that could be very costly to them, to our health sector, and to the quality of patient care in the future.

*************

Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on free-market solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA, or at turner@galen.org.

1 http://www.nytimes.com/2007/07/29/weekinreview/29berenson.html?_r=1&oref=slogin

2 http://www.spiegel.de/international/0,1518,399537,00.html

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Published by the Omaha World-Herald May 20, 2008

Nearly six in ten U.S. doctors say they now favor legislation to establish national health insurance, according to a new survey, but doctors may be a bit less enthusiastic if they knew more about where such a system would take us.

Touted as the “largest survey ever conducted among doctors on the issue of health care financing reform,” the results were published in the prestigious Annals of Internal Medicine and have since garnered a great deal of media attention.  The nationwide survey queried 2,200 physicians and was conducted by the Indiana University School of Medicine's Center for Health Policy and Professionalism Research.

Those who want a bigger role for government in our health sector quickly cited the findings as proof that the nation is ready for the kind of health sector overhaul that Sens. Barack Obama and Hillary Clinton are offering in their Democratic presidential primary campaigns.

Doctors have traditionally been prominent critics of a government-dominated system of health insurance, fearing that the bureaucracy would damage the doctor-patient relationship.  Could this apparent change of heart mean that their frustration with the current system has reached a tipping point and they see the only solution as more government?

Not so fast. The survey doesn’t tell the whole story.

Certainly the goal of health insurance for everyone is important.  But how we get there is crucial.  The survey didn’t ask doctors whether they would support national health insurance if it meant a massive pay cut for them, which is a stark reality government health insurance plans.

In the United States, the average physician makes between $200,000 and $300,000 a year. His or her European counterpart makes much less than half of that.1In France, the average physician makes $116,077. In Italy, the average doctor makes $81,414, and in Germany, just $56,455.2

In other words, U.S. doctors would surely face a huge pay cut if government were in control of as much of the health sector as it does in other developed countries.

Why the pay discrepancy between the U.S. and these other countries? Because in these other systems, government — not the market — determines how much doctors get paid. How valuable patients find a particular procedure, treatment, or specialty is irrelevant.

That has implications for both doctors and patients. Every year, the British government cancels up to 100,000 operations, largely because of a shortage of doctors, nurses, and operating rooms.

In Canada, doctors are leaving en masse, with many complaining about their low pay and high frustration levels, with bureaucracy getting in the way of patient care. Over the last decade, nearly 10 percent of physicians trained in Canada came to the United States to practice.

Even here at home in our own government-run health programs, cost-cutting is the rule  not the exception. This spring, Medicare is slated to cut payments to doctors by 10 percent. Never mind the fact that physicians’ expenses – thanks partially to medical malpractice premiums – continue to rise.  Physicians groups are spending millions of dollars on lobbying just to convince Congress to keep Medicare payments where they are. 

The next step after setting prices is for government to decide what drugs, medical procedures, and other treatments will be available – or not. That’s why the survey should have asked physicians if they would support national health insurance if they understood that it would mean a pay cut for them and rationing of medicines and of care for their patients.

Take prescription drugs, for example. Governments with national health insurance programs generally set their payments for pharmaceuticals below their fair market value. That means there’s less financial incentive for the companies to develop new treatments.  Europe’s pharmaceutical research industry is a shadow of its past vibrancy, largely because price controls and restrictions on access to new medicines leave little to pay for research. 

And access to new drugs suffers as well.  While 85 new drugs were introduced in the United States between 1998 and 2002, just 48 new drugs made it to the market in Europe during that time. 

The British government has been particularly heavy-handed in its restrictions on life-saving, but expensive, medications. For example, it has drastically limited access to Herceptin, a breakthrough cancer drug, and Aricept, an Alzheimer’s treatment popular in the U.S.

Government-run anything also entails plenty of paperwork. Most nationalized health insurance plans have saddled physicians with the bulk of the administrative tasks. Case in point: In 1975, the average Swedish doctor consulted nine patients per day. Now, it’s just four, largely because doctors spend an estimated 80 percent of their workdays handling paperwork.

American physicians are no strangers to government-imposed logistical nightmares. Medicare is directed by an astonishing 110,000 pages of rules and regulations. Many doctors have simply started to refuse to treat patients on public health insurance plans because the process they have to go through to get reimbursed is so time-consuming and costly.  A national health insurance system would mean doctors would have nowhere else to go.

So when we hear that nearly six in ten doctors support national health insurance, that most likely means that the other four in ten know enough to be concerned.  Physicians should take a closer look at the issue before buying into a bargain that could be very costly to them, to our health sector, and to the quality of patient care in the future.

*************

Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on free-market solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA, or at turner@galen.org.

1 http://www.nytimes.com/2007/07/29/weekinreview/29berenson.html?_r=1&oref=slogin

2 http://www.spiegel.de/international/0,1518,399537,00.html

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About the author