Our Perception of Physician’s Pay and Understanding Medical Billing

I recently saw a Freakonomics article being passed around Twitter that I couldn’t resist reading. Here’s a link to the article that’s titled “What Surgeons Get Paid, and What Patients Think Surgeons Get Paid.” Here’s a section of this article:

On average, patients thought that surgeons should receive $18,501 for total hip replacements, and $16,822 for total knee replacements. Patients estimated actual Medicare reimbursement to be $11,151 for total hip replacements and $8,902 for total knee replacements. Seventy per cent of patients stated that Medicare reimbursement was “much lower” than what it should be, and only 1% felt that it was higher than it should be.

In reality, surgeons get paid on average $1,378 for a total hip and $1,430 for a total knee. Thus patients were off by an order of magnitude in their estimates! The disconnect in public knowledge seems extreme.

In short, patients — the most important part of all of health care policy decisions — have absolutely no clue how much doctors get paid. They think we get paid (or, at least, deserve to) about 10 times more than we actually do!

I know this is a touchy subject, but when have we ever shied away from something touchy?

I think there’s a huge flaw in the above commentary. They should have asked the patients what the patients thought a physician’s annual salary was as opposed to what they should receive for a specific procedure. I think if they did we’d have seen very different results. I have a feeling that if they’d asked this way, the public would have probably been under for specialists like surgeons and would be over in what they think primary care doctors get paid.

The challenge doctors face is that almost no one in the public is going to feel bad for doctors that only get paid $100k per year. Maybe there are reasons they should, but it’s not going to happen. Plus, many doctors don’t help the situation when they drive around their Mercedes and BMWs.

Although, the more important point I take from the above commentary isn’t about physician’s salaries. Most physicians I know would love to get paid more, but they’re all doing fine financially. The larger point in the above excerpt is how clueless patients are at knowing the price of medical care.

I’m sure there are a number of factors at work here. Not the least of which is many patients who don’t care. The complex medical bills and insurance reports don’t help either. I’ve heard some hospital execs admit that they made the medical bills complex to read and understand because they didn’t want patients to know that the aspirin charge (or insert other item) was $5 (or some other outrageous amount).

If patients are going to start being active participants in their healthcare in order to lower healthcare costs, one good place to start might be the medical bill. The above example shows that patients are clueless as to what their healthcare is costing them. A clear medical bill could be the first step to helping patients become less clueless and more active participants in their medical care.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

2 Comments

  • In the medical field we know that there is a huge difference between hospital billing and physician billing, and no where was it pointed out that the first blogs info most likely was a Medicare facility reimbursement compared to a physician reimbursement. Quite frankly, we should feel bad for physicians, regardless of what car they drive(even medicaid people can get leases for a mercedes) because the insurance companies and CMS make it very hard for them to make a living. Surgeons may have it easier then some docs, but no one ever takes into account that doctors on a majority work for themselves, they run an office, with a staff, medical malpractice insurance along with other things that make their overhead high. Until someone looks at this countries insurance companies and how they consistently drive the price of healthcare up with their lower reimbursements, nothing will change. If we want patients to care and to help, the first place would be educating them between the differences of hospital bills and physician bills. By throwing two completely different entities like this together to try to educate anyone is not going to help. You can’t put Spanish and English together and learn Greek.

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