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Can a doctor break even at $47.50 per hour?

8:22 am by | 5 Comments

People literally can’t stop talking about Dr. Keith Smith’s defense of his right to earn a fair wage.

In addition to complaints about welfare bums and greedy doctors, there are many thoughtful comments. We are highlighting the best ones, including this one from primary care doctor, “clicky.” Be sure to check out the hourly wage comparisons at the end of the post.

To share your ideas on doctor pay or the patient ROI on healthcare, email me at [email protected], or comment on this post.

“Perspective is everything!

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I’m a primary care doctor who works in the hospital and office (and, yes, I treat Medicare patients. Also, I’ve cared for patients lacking insurance and have never received a dime for treating those patients).

EDUCATION COSTS:

1. Four years college.

2. Four years med school ($50,000 a year fully out of pocket, not having received any taxpayer subsidies).

3. Four years residency (working 80-hour weeks at roughly $10 per hour). For many specialists, residency is five to seven years. Some go on further to do one- to three-year fellowships.

4. $300,000 debt after finishing medical school.

5. Weigh the opportunity cost of this education (my computer programming/engineering friends in Silicon Valley having been making $50 per hour for the last 12 years in which I’ve paid $300,000 for my further schooling).

6. Studying four to six hours a day for many exams, including paying to take (and attend Kaplan review courses for) the USMLE Step 1, 2 and 3.

MY OFFICE EXPENSES

1. $8,000 rent each month (roughly $100,000 a year).

2. Three office employees (roughly $150,000 a year for receptionist, medical assistant and medical biller, including their health insurance, Social Security, 401(k), disability and other benefits).

3. EHR ($40,000 for the first year, then monthly for IT/customer support).

4. Miscellaneous (e.g. office supplies, office furniture, office utilities, multiple phone/fax lines, multiple computers, medical equipment, injectable medications, my licensing/credentialing/malpractice fees, etc.).

5. Annual overhead expenses roughly $300,000.

6. Making $285 over six hours ($47.50 per hour) is nice, but won’t allow me to even break even with the office expenses. That is why many doctors don’t accept Medicaid (and possibly soon to be Medicare) patients, because for each patient you see, you lose money. Obama has promised to cut Medicare reimbursement to hospitals and physicians even further, which will likely close many doctors’ offices and clinics. Medicine is a business like any other. There are rich and poor doctors, just as there are rich and poor artists, musicians, business owners, or any other profession.

7. Doctors’ visits are expensive because of the litigious environment that exists in the U.S. When I treated patients in rural villages in India, you don’t have to charge as much because the overhead is less (OK, I treated them all for free after the 2005 Tsunami). The good things is that I had no worry of being sued by these villagers. The bad thing is their poor access to medical care, as many hadn’t seen doctors in years, and would never be able to get to a cardiac cath within the one-hour standard for treating ST-elevated heart attacks.

SALARY COMPARISONS:

1. My guitar teacher: $40 per hour

2. Physical therapist: $45 per hour at Kaiser Northern California

3. Pharmacist: $55 per hour

4. Acupuncturist: $65 per hour

5. Chinese herbal medicine “doctor” in Bay Area: $60 per hour

6. Chiropractor in San Francisco: $85 per hour

7. My computer/engineering buddies average $70,000 to $120,000 annually since graduating college at 22 yrs old.

8. My dentist charged me $200 for 15 minutes of face time

9. NFL referee: $200,000, up from $150,000

10. Investment bankers: $150,000 to $300,000-plus

11. Senior architect engineer: $200 per hour

12. My malpractice attorney: $310 per hour (haven’t been sued yet, thankfully)

13. Mitt Romney: $42 million in 2010 and 2011 (paying a 14 percent tax rate)

14. Alex Rodriguez: $29 million ($275 million over 10 years), not including endorsements

15. Justin Bieber: $55 million ($300,000 per show)

16. Oprah: $290 million

17. Dr. Smith as paid by Medicare: $47.50 per hour – edited to add

People were upset about Dr. Smith complaining about making $285 over six hours. Get a grip!

Perspective is everything!”

Comments have been edited for clarity and length.
{Image from www.SeniorLiving.Org]

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By Anonymous

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5 comments
Plain Joe
Plain Joe

Well stated with facts.  I agree that perspective is everything.  I just like to highlight of the basic economic concept of how the healthcare system in the US actually works as it applies to the whole population.  The major problem begins with the government setting the rate so low for doctors that most end up making little or lose money when they see a medicare or medicaid pt.   These rates then are not disputable by the doctors under the law.  Do you ever see any field that follows this unfair rule?  Being in the business of billing I know for a fact that medicare pays about 80 and medicaid 60 dollars per hour for anesthesiologists.  So how does the healthcare system compensate for this.  1)  As of now a lot of experienced physicians with a thriving practice does not take new medicare or medicaid pt.  The figure in Texas is close to 40 percent.   2)  With medicare and medicaid paying so low,  along with patients that have no health insurance and can not afford to pay, paying patients have to pay a whole lot more to make up for the difference. Otherwise, no hospital or doctors practice can be profitable and stay afloat.  This results in higher insurance and hospital rates than normally would be fair for the paying population.  Imagine you are a physician working in an urban area where the percentage of medicare and medicaid sometimes approach 70 percent.  Look around to see these hospitals and doctor practices struggle financially or close down.  Can you really blame some doctors who stop accepting medicare and medicaid patients under this condition?  Yes most doctors do some free care and low paid care all the time because that is why they go into medicine, but it gets old when they are expected to continue to sacrifice more and more.   That is why most medical society oppose Obamacare, and the American Medical Association that supports it is weak and losing members in trove.  One clear result of Obamacare where more people are covered under medicaid, and medicare, and where the insurance company is forced to provide more coverage is that the paying population health insurance had gone up about 30 percent last year.  This will likely continue to go up substantially in the future.  The insurance companies will always shift their cost to you, otherwise they go bankrupt too. I would also bet that more doctors in the future will opt out of taking care of medicare and medicaid patients.  Some other approaches may be necessary to fix the system, as this will certainly be the future all of us will face.

misstory
misstory

And doctors earn EVERY penny they make whether they are rich or not.  Who are you to determine that a six figure salary is wealthy or comfortable? Who are you "works with doctors" to disparage any doctor no matter his income level or beliefs.  Who are you to demand that he work for x amount or that his services should be provided by force or for reduced pay. If you believe that there are better systems of healthcare, then go to them.  If you believe that there is a better model of healthcare, then go find it.  Stop tearing down this system by forcing your beliefs and wills on others.  That is despotism.  That is this healthcare bill.  And that is why doctors are leaving and that is why I will choose concierge medicine over that of government medicine.  Have fun waiting in line and being treated by a unionized nurse or physician who makes what you consider a fair wage while you adovocate that Healthcare is a Right.  Have fun.  I will have a relationship with my doctor.  You can have a relationship with a bureaucrat who knows better...even better than you. 

Works with doctors
Works with doctors

I don't agree with those that think Dr. Smith should make $47.50 an hour. Because he doesn't. He makes a comfortable 6 figures if not more. By his picture, he looks to be about the age where he has been treating Medicare and Medicaid patients for decades. I just can't get over this article (whine) about him working for free. I am certain nearly every person that replied to the article well knows the statistics you posted here. It appears that most of them, including me work closely with physicians. Everyone feels just as strongly about overpaid sports figures crying about how they sacrifice their later years for present sports injuries while making millions. This is no different, only the sacrifice is before the career, not after.

 

Dr. Smith doesn't stand for every physician. You said it yourself, there are poor physicians and rich ones. Dr. Smith is a rich one. He and the majority of physicians including yourself, now and in the future are still going to be wealthy with or without government healthcare. Just don't whine about working for free when you don't.