The AMA Is To Blame For The Primary Care-Specialist Income Discrepancy

Sunday, December 16th 2007
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I’ve commented before on the discrepancy of earnings, for similiar effort, between primary care physicians and specialists. Some of my most recent posts relating to such, although focused in topic, appear here and here.

Personally, I’m distressed by our lack of focus on primary and preventative care in this country and with the current reimbursement structure. That said, I continue to have problems with the way the debate has shaped up over the decades - an antagonistic us versus them mentality which doesn’t accurately reflect who/what is to blame for the current primary care “crisis.”

I’m writing this post specifically in response to Brian Klepper’s recent post on The Health Care Blog. In it he uses the looming SGR-mandated Medicare cuts (no last minute reprieve this year) as a spring board into discussing how tragic primary care physician reimbursement is.

Specialists typically take home at least double the income of the generalist. While the knowledge base and options have exploded in all areas of medicine, the demands on generalists, who must maintain reasonable expertise across all areas, have been intense. Medicare’s payment system, which is the basis for most commercial payment as well, favors specialists in two ways. It pays them a higher rate for their time (implying that what they do is more difficult and more valuable), and it allows them to earn money through procedures that are unavailable in primary care.

In the post there are several casual relationships made for the reader which I’m not sure are nuanced enough to accurately reflect what is truly going on. To be fair, he’s reiterating only what is said by virtually every PCP concerned with the future of his profession; so not to put the onus on his words alone. But consider,

The career-choice implications of these financial dynamics are not lost on medical students, who have been diverted in droves away from what many apparently see as an unrewarding primary care office existence. Between 2000 and 20005, the percentage of medical school graduates choosing Family Medicine dropped from a low 14% to an abysmal 8%. Among Internal Medicine residents, an astonishing 75% now end up as hospitalists or sub-specialists rather than office-based general internists.

The post then goes on to put a large part of the blame for the continued income discrepancy on the AMA’s Relative Value Scale Update Committee (RUC).

Let’s take these two issues as separate. First, how much is income disparity causing the primary care “crisis” (and for simplicity I’m going to assume such a crisis actually exists). Second, what sort of responsibility does the AMA and RUC shoulder for such income disparity.

Part of the primary care “crisis” (or maybe the majority of it) is over its future and namely the declining number of allopathic U.S. graduates going into primary care specialties. Last year only about half of those matching into Family Medicine were graduates of American medical schools. But is the income disparity really the driving force behind the abandonment of primary care specialties?

No one doubts income potential as a factor, but the way it has been singularly latched onto by those furthering the cause of primary care is disturbing. Take this study from Obstetrics & Gynecology,

The association is there, but it is imprecise. Below is a relatively crude comparison of average annual income for a specialty and the average Step 1 scores of those who matched into a specialty. Data is from the AAMC Charting Match Outcomes, the SF Match released data, and the AMGA physician compensation survey.

According to the AAMC the Step 1 and Step 2 scores are easily the best predictors of a student’s success in the residency match and thus probably are the best single measurements of a student’s ‘competitiveness’.

Although this little data collection effort has many flaws (it ignores further sub specialization, etc) you would expect it to crudely represent the importance of income in student specialty selection. The best fit line is pretty damn imprecise.

Most studies of medical student specialty choice fail to find income or the level of student debt as rising to significance as a predictor of specialty selection (except for the ridiculous self reporting surveys).

In 2004 the relative annual mean income (to internal medicine) of family practitioners was .96. In 1988 it was .89 for family practice. 1988 was a time when Family Medicine, while past it’s golden age, was in a far better place (in terms of medical students it was attracting) than nowadays.

The point is there is far, far, far more than relative earning potential that is driving medical student’s specialty selection and endangering the future of primary care.

The truth is that a better correlation probably exists between perception of lifestyle and selection of specialty.

Now true, part of the perceived shiesty lifestyle with primary care is driven by the “necessity” to work harder to maintain income levels. I use those quotation marks with purpose because despite the increase in overhead, despite the falling reimbursement, a primary care physician in the United States earns, on average, more than a PCP in any other OECD country. Both in absolute dollars and as a percentage of average household income in those nations.

These may not represent true market values but it does lead you to a general conclusion that if PCPs are working harder to maintain their income at some level they deem “comfortable” then such is by choice not some “necessity.” Even factoring in average medical student debt, the career of a primary care physician continues to provide real, life time earning potential greater than oppurtunities in virtually any other country.

Beyond the turn off of the effort and lifestyle that primary care demands, students are truly turned off by the talk of doom and gloom surrounding primary care. It is a self fulfilling prophecy, I promise you. This antagonistic, blame the world/the specialists, shit on the condition of the primary care profession is a factor in medical student specialty selection.

Maybe not the compelling reason students are turned off of primary care, but it is there as a factor.

The sad thing is that the attitude is probably unwarranted when you look at the bigger picture and just don’t view it as primary care versus specialties. Look at what primary care has to offer and how such is currently drowned out by talk of reimbursement and the horrors of the profession, at least from the point of view of a medical student. The increasingly sullen attitude I see from primary care physicians reflects expectations based on past earnings for past efforts…if you give a mouse a cookie applies just as well here as to patient expectations. Truth is it is just as likely that physicians were overpaid then as it is that physicians are underpaid now.

That last look at comparative earning potentials of primary care physicians by country provides a nice segway into the second part of this post - debating the contention that the AMA is to blame for the income disparity.

First and foremost, let’s admit that we’re suffering a crisis. While the population of PCPs hasn’t dropped off (and maybe never will), the ratio of primary care to specialists, and the absurd growth of that ratio, is simply out of control. And we need to realize that the data really is there, that a focus on primary and preventative care actually improves populations’ health across virtually all gross health outcome measures.

And of course I think the SGR cuts are terrible and they’re regressive for the primary care physician.

But is it really income that is causing this crisis? As implied in the first part of this post - no.

As per that Congressional Research Service report previously cited, the American primary care physician earns 70% of what the average specialist does. Using the average for all other OECD countries the ratio is virtually identifcal - the PCP earns 72% of the specialist. This is true both in absolute dollars and in the ratios of income to the average national household income.

It is just the case that the United States has far more medical specialists than it truly needs. The existence of such an abundance reflects more than just their increased income. The cause and effect relationship here is more circular than that. For instance, there is no doubt that Americans as a whole have higher expectations of health care than any other western society - such expectations explain the desire to skip your PCP altogether and go to the “medical expert.” In part these expectations have been stroked by medical specialists and in part the expectations explain the higher incomes. It is highly cyclical.

The comparison above doesn’t answer whether the American PCP is valued appropriately.

What it does is provide us some basis to judge the appropriateness of the average earnings of the PCP versus the specialist. Now, the breadth of disparity may be more alarming in the Untied States (for instance: an average neurosurgeon earning 5x what a family practitioner does) but in terms of average it is hard to say that, by any quantifiable comparisons to other markets, Medicare or other payers are overvaluing the medical specialists as compared to the primary care physician.

And you certainly cannot say that the disparity is the fault of the AMA or the RUC. The income gap (as cited above) existed long before the emergence of the Resource-Based Relative Value Scale.

With such on the table I cannot agree with this,

[I]t is important to be clear about this – the premeditated actions of the specialist-dominated RUC, operating under the auspices of the AMA and in alliance with MedPAC, appear to have played a direct role in the current primary care crisis by driving policy that financially favored specialty care at the expense of primary care.

I have to agree with this editorial by the current Chair of the RUC, Dr. William Rich (admittedly an ophthalmologist) who puts the blame on CMS,

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 affects all health care professionals similarly. Despite protests from the RUC and most medical specialties, CMS chose instead to address budget neutrality through a “work adjuster,” affecting physicians who receive a greater proportion of their payment from their own personal work effort.

Now I’m not out there earning…yet, but in conclusion I have to disagree with the primary points of THCB post: Whatever disparity in income exists between primary care physicians and specialists it predates the RBRVS and it doesn’t appear to have been aggravated by the existence of the RBRVS and certainly not by the RVS Update Committee.

We may criticize their efforts in moving to correct the disparity; but such a focus probably ignores the real issues at hand (such as the real debate over whether such correction is actually needed or a look at the real factors maintaining the disparity). Yes, if the income gap was closed in it’s entirety then Family Medicine would fill every year. An impossibility. In reality, any reasonable level of movement towards parity will do little to attract medical students back to primary care without alleviation of the multitude of other factors contributing to the primary care crisis (only some of which have been discussed in this post).

We need to be working to increase the number of primary care physicians and decrease the number of specialists but such isn’t to be achieved by shouting blame at the AMA and RUC.