Fixing Medicine in America: Debt & Compensation

Alright, this is going to be an ambitious blog entry. So ambitious that I don't think I'll be able to possibly do it adequate justice with one post that I'll probably blog a bunch more times on it. So, I'm going to blog on a subtopic this time around.

So in the midst of my furor of studying, I took some time out to chat with my dad about the health system in the US and he proposed a couple of good ideas. I'm going to take those ideas and add my own twists to them and apply them in a practical manner. Because this topic is going to span across multiple areas throughout the health system, I'll do my best to explain how everything works to the best of my understanding. So, instead of studying like I should be, I'm gonna blog a few hours on this topic.

I'll lay it out, eliminate medical school tuition and pay doctors purely on salary with bonuses on performance. Now, this may sound extremely radical, but hear me out, it will sound reasonable by the end of all of this.

As you already know from my previous entry that med school costs about $300K USD in today's money for all 4 years. So, there is a built-in financial burden for the student to choose specialties that may not necessarily be a specialty that a student wants on a purely interest basis. But instead, students may be motivated to choose a specialty that pays better, has better hours, and doesn't require as much effort, especially after enduring 8 years of living as a starving student. There will be a financial component built into whatever specialty a student chooses simply because of this huge amount of loans that a student needs to pay back over, say....a 10 year timeframe after med school. So, essentially, a medical doctor has the financial incentive to pick a specialty that will likely reduce this "time to net inflow of cash" to catch up with his/her peers that have been working in other fields for the 4 years while he/she was in school collecting Stafford Loan statements.

This financial aspect of medical school you understand now. We'll move onto how the system has created financial incentives to choose specific fields. As much as the counselors and elders tell you to choose what you love, there's always an inherent bias to point you towards lucrative fields. This is why we have people aspiring to be lawyers, accountants, CEOs, I-Bankers(before this crisis), engineers, and doctors. While, yes, we should be paying these people more because they add value to companies and generate more cash flow and do things that no one else can really do properly or they keep you healthy and alive so you can make money, too. So, 6 figure salaries are justified, 7+ figures are pushing it, but that's a topic for another time and another blog. In any case, within the field of medicine, there is a hierarchy of well-paying specialties and less-well-paid specialties.

I'll list some of the commonly known ones, ROAD ones, and a few other less commonly known ones. I'll list with them the years it takes to come out and practice, how much they get paid in clinical practice because academic medicine pays much less.

Specialty - Years of Residency+Fellowship - Step 1 Median Score - median estimated starting clinical practice pay
(1+3 means a year of internship and 3 years of residency in that field)
(3+3 means 3 years of residency and 3 years of fellowship)

General Practice Specialties

Family Medicine - 3 years - 209 - $150K

Pediatrics - 3 years - 217 - $150K

Internal Medicine (General) - 3 years - 222 - $180K

OB/GYN - 4 years - 213 - $230K

General Surgery - 5 years - 222 - $260K

ROAD Specialties (so-called "Lifestyle" specialties)
Radiology (Diagnostic) - 1 + 4 years - 235 - $310K
Ophthalmology - 1 + 3 years - 235(mean) - $240K
Anesthesiology - 1 + 3 years - 220 - $330K
Dermatology - 1 + 3 years - 240 - $330K

Subspecialties

Internal Medicine (Cardiology) - 3 + 3 years - $340K

Neurology - 4 years - 219 - $220K

Others

Psychiatry - 1 + 3 years - 208 - $200K

Preventive Medicine - 3 years - Only 3 people in the US bothered to apply last year.

Of course, the compensation data is from surveys, I doubt highly compensated folks would be as likely to fill out the survey. So, of course, there's not enough data from certain fields and I expect many of the fields are underreporting their numbers. For instance, Plastic Surgery doesn't have enough or any data for Clinical Practice compensation, but I'm sure you can imagine 7 figures already. Comestic Dermatology could easily make more than $300K; think Botox, Chemical Peels, and Microdermabrasion. Then factor in the practices that don't take insurance. Then you've got yourself a bunch of money grubbing docs that feel entitled to a ton of money taking care of richer folks while the rest of the docs are taking less money to take care of the underserved folks, ie. the family practice docs in underserved urban areas.

So, if we eliminate the debt and normalize salaries for doctors, the competition for specialties should flatten out into purely interest based specialities and a greater flow of brilliant students into medical specialities with greater need rather than the lucrative ROAD specialities. By paying doctors salaries with bonuses on performance, we can focus more on health problems that net the greatest amount of benefit in terms of mortality and morbidity for everyone.

For instance, I believe that a doctor should be paid more for convincing a patient to quit smoking than a doctor that gives a patient a botox injection. But the way the system works now, a doctor doesn't get paid to convince a patient to quit smoking nor is he encouraged to do so due to the time necessary to do so. Also, a botox injection isn't covered by insurance, so the dermatologist can charge whatever rates the market will bear. So, in this example, a patient that gets less wrinkles will pay the doctor a lot of money, but will not pay the doctor much anything for getting him to quit smoking. And this example works because quitting smoking would have prevented much of the wrinkles in the first place and prevent the patient's early death from complications from pneumonia, COPD, heart disease, or cancer, all of which would've costed the health system a ton more money. So the family practice doc would have saved the health system tens of thousands of dollars by getting one person to quit smoking but gets paid peanuts for doing so.

Right now, there is a financial link of doing procedures to the doctor's paycheck. Right now, every time a doctor does a mammogram, colonoscopy, pulmonary function test, or whatever other test, the doctor gets paid for his time and efforts. So, a doctor is financially incentivized to do as many procedures as he is allowed to do to net himself more pay.

Also, the current malpractice environment incentivizes a doctor to do every possible lab test on a patient to rule out every possibility should there be a hint of a possibility of being anything other than the most common diagnosis. This will help to prevent the doctor or the institution from being sue because the doctor had covered all of his bases, warranted or not.

Of course, there are ways for labs to give doctors kickbacks for sending them more labs to run that don't show up on financial statements. This is obviously highly unethical, but you have to realize that many medical students do go into medical school with stronger financial motivations than altruistic motivations. And, despite the efforts of medical schools to teach ethics and screen for ethical individuals, we know that ethical behaviors and personalities cannot be taught and unethical individuals may be pathological liars. Ethical people have upbringings that emphasize ethical behavior and thinking, these are not things that we can expect to infuse into people that aren't ethical to begin with.

By severing the connection between the number of procedures and financial gain, we can expect to see a better rationing of procedures as needed. By linking salary levels to experience, performance, and level of training may be the more reasonable way to go about everything as to encourage doctors to continue to improve their skills, learn more, and follow their interests.

Now, we should put performance bonuses into the whole fray of things because medicine is about improving lives and extending life. A doctor should get more bonuses for saving the health system money that would have been spent on treating a patient for potential COPD. For instance, we should pay a doctor a bonus for doing any of the following things: getting a patient to successfully quit smoking, getting a patient to maintain a healthy diet and exercise plan, getting a patient to follow a drug regimen, improving a patient's health literacy, among others. These are all things with long-term cost-reduction benefits that should be encouraged. The reason why this isn't done already is because a doctor is forced to see as many patients as possible and 15 minutes is all a patient gets with the doctor because the health insurance system rewards a doctor for efficiency and doing more procedures than taking the time to get to know the patient. This is why you all should get a doctor friend that knows you well, it's cheaper and probably healthier for you.

In any case, performance bonuses for extending and improving a patient's life while saving the health system money. So, base salary is probably very basic, like a low number with everything else focusing on improving patient lives. A family practice doc should be making a good living if he can convince all of his patients to stop smoking and have healthy diet and exercise. Much as a surgeon could if he can convince patients to take up the healthy diet and exercise after performing a coronary bypass on the patients. Emergency room doctors can prevent future visits by teaching patients how to prevent future traumas. So, everyone could potentially get bonuses by intervening at the right places. Granted, we would need implement fail-safe systems to prevent fraudulent bonuses from doctors claiming they have gotten someone to quit smoking, but that's more of a details and implementation issue for another time. If we had this sort of a system, we can definitely help fix our obesity epidemic and cut health care spending by an extraordinary amount.

Of course, back to the medical school tuition deal, we eliminate tuition and pay for living expense for going to Medical school and salaries during residency training and beyond. (This is a model that University of Central Florida Medical School is doing.) By doing this, students will be free to choose specialities based on their own interests and strengths rather than their financial situations. Then, we eliminate the salary differences among specialities and pay according to experience, skill, training, and performance to eliminate financial incentives to pick any particular speciality over another based on financial reasons. By turning medicine into a sort of government employment with paid training and graded pay scales, we would eliminate disparities across specialties and recruit people by interest and skill. Then we incentivize clinical performance with performance bonuses based on cost-cutting measures and life enhancing and extending activities and procedures. And of course, we need a single payer system, cut out insurance entirely, and have the entire system taxpayer funded. We cut out overhead costs of administration by insurance companies and eliminate the middle man and everyone gets equivalent care across the board. With more money left over from eliminating unnecessary health costs from before due to all the efforts spent on preventive care, we can expand medical education and churn out more doctors and have better care and research all around. All this will be good and all of this is possible, but the financial motivation of keeping high paying jobs will outweigh any altruistic motivation of serving the underserved populations. AMA and most, if not all, of the other medical societies will not support something like this because it cuts into their own paychecks and they feel entitled to having higher pay.

Who knows? Maybe a few of you will listen and help me fix our system.

Well, that took 3 hours to research and write, now I've gotta get some sleep and get back to studying so I could actually become a doctor rather than worry about fixing the system that I'll be a part of.