Physician pay is struggling to keep up with inflation, declining reimbursement and Medicare pay cuts.
Harry Severance, MD, adjunct assistant professor at Duke University School of Medicine in Durham, N.C., connected with Becker's to discuss the effects of CMS' suggested 3.34 percent conversion factor decrease from its proposed Medicare physician fee schedule for 2024.
Note: This response has been lightly edited for length and clarity.
Dr. Harry Severance: Multiple sources note that physician salaries/income represent only 8.6 percent of total healthcare costs. This is an extremely small figure as compared with those of other healthcare stakeholders such as C-suite personnel, the massive expansion in other hospital administrative/management personnel, big pharma, the insurance industry and other healthcare system contributions to total healthcare costs. When adjusted for inflation, Medicare physician payment has already dropped by 26 percent from 2001 to 2023 per the president of the American Medical Association. Physicians are one of the only providers who don't receive an automatic inflationary pay increase.
As the vast majority of U.S. physicians are now employees, they have seen their actual incomes substantially decrease as their employer facilities (who bill for their employees' services rendered) keep increasingly large chunks of these revenues for themselves. We now face a situation where we are already critically short on available and future physicians within our healthcare system. Nearly 50 percent of currently practicing physicians are over 55 years old with many now taking early retirement. Not nearly enough new physicians are being trained to even fill current needs — much less to address the huge arriving bubble of retiring baby boomers.
This current shortfall has already led to significant decreases in patient access to timely and adequate healthcare throughout the country. This shortage has also led to many hospitals reporting that they cannot find enough available doctors (and other healthcare workers) to keep critical service lines open, thus losing critical revenues and having to close. This at a time when healthcare workplace abuses, violence and assaults, and toxic workplace conditions with increasingly impossible to meet productivity and quality benchmarks are at an all-time high and continuing to rise unchecked.
All these factors have led to hundreds of thousands of physicians (117,000 physicians left healthcare in the fourth quarter of 2021 alone) joining the healthcare workers who have abandoned healthcare in the past two years. Others, when laws permit, have joined unions to fight for better conditions and pay.
[CMS' suggested 3.34 percent conversion factor decrease] seems to be an incredibly shortsighted and unwise move to further ding this critically decreasing resource — our nation's doctors — with an additional federal pay cut. The results, if enacted, will only lead to further departures by physicians from healthcare, and also significantly decreased interest by those in the formative years of choosing healthcare as a possible future career.
Will the last physician to leave please turn out the lights?