Pay Gap Between Common Procedures

For the study, researchers compared the hourly pay a physician received for providing cognitive care—the bulk of a PCP’s services—against cataract extraction and colonoscopy. They found that Medicare reimbursement for physician time spent on cataract extraction and colonoscopy was 368% and 486%, respectively, of the revenue for a similar time spent on cognitive care.

Essentially, two colonoscopies can generate more revenue in a couple hours than a PCP receives for an entire day’s work.

The findings show “the financial pressures that may contribute to the U.S. health care system’s emphasis on procedural care,” write authors Christine Sinsky of Medical Associates Clinic and Health Plans and David Dugdale of the University of Washington. The “magnitude” of the price discrepancy is a major contributor to the decline in the number of physicians choosing primary care careers, they added.

Moreover, the price disparity “may also contribute to an excess of expensive procedural care” and “ultimately contribute to the lower quality and higher costs experienced in the United States comparedwith other developed countries,” the authors posit.

Expert: Payment system undervalues primary care

In an accompanying commentary Paul Ginsburg of the Center for Studying Health System Change in Washington, D.C., critiqued the long-standing method of setting payments for physician services. Under the Medicare physician fee schedule, CMS assigns a relative value unit (RVU) to every health care service. Reimbursement is calculated by multiplying the RVU by a dollar figure—known as the conversion factor—and another measure reflecting geographic variation in physician practice costs.

From 1991 to 2002, Medicare payment rates for primary care services rose 40% in relation to rates for physician services overall, Ginsburg wrote. However, the trend did not last “owing to a process for updating relative values that allowed these gains to be eroded through inattention,” he wrote, referring to the American Medical Association (AMA) committee that provides RVU recommendations. Many critics charge that the committee underrepresents PCPs and is skewed towards specialties.

Doctoring the system? Washington Monthly goes inside the RUC

Ginsburg expects that the Affordable Care Act will help better distribute payments among physicians as part of the law’s broader transition to value-based care. However, he warned that unless Congress eliminates the “counterproductive incentives built into RVU’s,” the “payment gap will persist.”