Each year, Medical Economics asks physicians about their top challenges for the new year. During the 2018 end-of-the-year polling, this leading healthcare publication posed a more provocative question: “What is ruining medicine for physicians?” An overarching theme that emerged from the 2018 poll centered on how the business side of healthcare is demanding more of physicians’ attention than any other issue – even patient care. From continuing education requirements to continued declines in reimbursement rates to hard-to-use EHR systems and payer relations, there seems to be fewer hours left in physicians’ days to do what they do best and were trained to do – diagnose illnesses and treat patients. As a Wealth Manager and the spouse of a physician, I’ve called out four of the nine “pain points” that I found most relevant to a physician’s finances:
Compensation: On average, primary care physicians have seen their pay rise by more than 10% in the past five years, which is only slightly more than inflation over that same time period but close to double that of specialist compensation. However, even with these gains, compensation of primary care physicians continued to trail that of specialists. While median income for primary care physicians was $257,726 in 2017, that’s significantly less than the $425,136 reported by specialists for the same time period. Compensation becomes increasingly critical to physicians as they continue to face increasing overhead, climbing staff pay, lower reimbursement rates and longer hours.
Administrative burden: Paperwork and administrative tasks topped the list when physicians were asked, “What is ruining medicine?” In fact, the majority of the physicians surveyed (79%) were united in making this claim. That is probably no surprise to anyone, provider or patient, who has been watching the healthcare industry struggle to balance patients’ best interests with what insurers will cover and navigate the myriad of new documentation required to satisfy prior authorizations.
Operating expenses: Primary care physicians found their practices’ median operating expenses up 13% since 2013, which is nearly double the inflation rate. Nationally, nurses’ compensation has risen even faster and is up 19% since 2015. Clinical staff members’ larger paychecks prompt physician employers to expect licensed clinical staff, such as physician assistants and nurse practitioners, to provide the highest level of care their licensure allows. However, these “physician extenders” are limited by their licensure to a specific set of tasks and responsibilities hindering what can be delegated by physicians. Finally, compensation for non-clinical staff, which remains in short supply, was up for 11 of the 12 positions surveyed.
Payer negotiations: Value-based care and ongoing payer consolidation complicate what physicians view to be one of their most burdensome responsibilities: negotiating contracts with payers – the third-party insurers who actually reimburse physicians for patient care. As budgets tighten and the demand for profit escalates, payers are ratcheting up their requirements to justify reimbursement increases – even small ones. In some cases, payers are restricting their networks to only those providers who deliver optimal outcomes at the lowest cost. Attempting to exert leverage into the negotiations is almost a moot point for smaller practices, which typically encounter a “take it or leave it” response from payers. As the healthcare system moves toward a value-based approach, the need to justify requested increases with documentation can be expected to continue resulting in yet more paperwork for medical practices.
All of these pain points impact a physician’s financial picture. In my work with doctors, we consider all of these factors when creating a financial game plan for a physician and his or her family. To be successful in “Making Life’s Journey Richer” for our clients, we must pay very close attention to bumps in the road, both expected and unexpected, particularly for physicians whose financial futures are so uncertain.
To read the other five items physicians say are ruining medicine for them, go to “Top Nine Issues Ruining Medicine for Physicians.”