Imagine that you manufacture and sell ottomans. You are very proud of the excellent ottomans that you make. You trained for many years at great expense to become an expert ottoman maker. But as your career progresses, you find yourself generally dissatisfied with how many ottomans you have to make every day to make a living, and you think that your ottomans are worth more than you’re getting paid for them.
But what really annoys you are coffee table makers. They get a lot higher prices for coffee tables than you get for ottomans even though you work every bit as hard as they do. And you’re pretty sure that ottomans are much more important to most living rooms than coffee tables. The more you think about it, the more you’re convinced that coffee table makers shouldn’t make as much, and ottoman makers should make more.
So you do the reasonable thing. You fire off a letter to the Central Committee for Living Room Furniture Allocation (CCLRFA) and demand that ottoman prices be raised and coffee table prices lowered.
It sounds like an Orwellian dystopia, but that’s exactly what’s happening in healthcare.
The American Academy of Family Physicians (AAFP) believes that primary care doctors are not being paid enough by Medicare, and that Medicare overvalues services provided by specialists. In any rational marketplace, primary care doctors (or at least some of them) would simply raise their prices. But in the price-fixed world of Medicare, the prices aren’t set by patients or doctors, so the AAFP is left arguing with the CMS (Centers for Medicare & Medicaid Services) about the RUC (Relative Value Scale Update Committee).
Feel free to follow the links below for a mind-numbing look at the arcane world of healthcare reimbursement.
Though I am obviously a primary-care doctor, it’s hard for me to have much sympathy for the AAFP. Forget the fact that the central control of prices has been disastrous everywhere it has been tried, and that Medicare’s task of setting the prices that thousands of doctors receive for hundreds of services is absolutely impossible. With healthcare costs exploding, and with healthcare being one of the few sectors that (because it is heavily subsidized) continues to grow during the economic slump, it seems outlandish that doctors would ask current taxpayers for a raise. It’s actually worse than that. Because of our debt, current expenditures aren’t even paid by current taxpayers but rather by future generations. So the AAFP would like your grandkids to pay your doctor more for your care.
Do I think most primary-care doctors work hard and try to do a good job? Absolutely. Do I think they’re under paid? I have no idea. The only way to accurately value something is in a free marketplace.
If family doctors want to earn what they’re worth, they should work for their patients and find out how much their patients are willing to pay. If they want to start internecine bickering with specialists over who gets to bankrupt the country first, they should renew their membership in AAFP.
Differences in Doctors’ Compensation in the Spotlight (Wall Street Journal Health Blog)
Primary-Care Doctors Push for Raise (Wall Street Journal article)
Higher Fees Paid To US Physicians Drive Higher Spending For Physician Services Compared To Other Countries (Health Affairs, abstract available without subscription)
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