Study finds high doctor fees to blame for growing U.S. health care costs

A doctor conducts a checkup in Florida.

Steve Chiotakis: At last night's Republican presidential debate, all 8 candidates were quick to criticize President Obama's health care overhaul. Former Utah Gov. Jon Huntsman said health care can save money by cutting costs and computerizing medical records.

But a study out today in the journal Health Affairs says a big reason Americans pay more for health care is because doctors get paid so much.

Marketplace's Amy Scott is with us live now to talk about it. Morning, Amy.

Amy Scott: Morning, Steve.

Chiotakis: How much more for health care are we paying?

Scott: Well let's take the example of hip surgery -- a pretty common procedure in this country. With private insurance, it's nearly $4,000 in fees per procedure here -- and that's about twice as much as in other countries. Medicare gets a cheaper rate, but still is paying 70 percent more than public insurance in other countries. And that's why U.S. doctors have much higher incomes than their counterparts elsewhere. The average orthopedic surgeon here makes almost half a million dollars before taxes.

Chiotakis: So what does that mean, Amy, for overall health care spending?

Scott: The study says those higher fees are the main drivers of higher overall U.S. spending on health care -- as opposed to things like practice costs or med school tuition.

Here's what JB Silvers, a health finance professor at Case Western, had to say about the findings.

JB Silvers: One lesson might be, if we ever want to control costs on this side, we need to regulate more, and that's anathema to most physicians. They just wouldn't even consider that as a possibility.

As you mention, we just had a major health insurance overall. And it didn't do much to address doctors' fees.

Chiotakis: Marketplace's Amy Scott reporting live. Amy, thanks.

Scott: You're. welcome.

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As a doctor who has worked in both the US and Australia, I can tell you that this story could not be more wrong. No I did not go into medicine for the money, but the pay in America is about 30% than what I get paid here in Australia.

Ok, I can't help myself....here is one more point....Doctor's fees have nosedived over the last 20 years too. As an Orthopaedic surgeon, I can tell you without question if fees drop ANY further for hip replacement I won't do them anymore (they are too complex with too many possible complications with too much patient care required)...and do you know what is sad? I love doing them and patients, in the vast majority, love them too. So how is it good for our system if good doctors stop doing procedures because the risk/benefit analysis no longer works? Also, in direct response to Linda below....It is likely that your doctor "charged" much more to the insurance company than they actually got paid (those figures on the insurance bill can be very misleading and don't often reflect what the doctor is actually getting). On average, I make LESS than $4000 for a privately insured total hip replacement patient. Do you know what I take home after taxes for performing a hip replacement on a Medicare beneficiary? It may shock you....a whopping, $900. I paid my lawn care guy more the last time he did a spring spruce up for me (and no, I don't live in a mansion...rather about 1/4 an acre).

This study is grossly flawed. Many of the comments here point out many of the flaws. I'll add just two more: tax rates in countries where doctors charge less are substantially higher and multiple studies have shown that MD's in the US have not seen a real dollar increase in income in nearly 20 years. So, how are doctors fees the problem again?
No, the purpose of this article is completely political. Like so much else we are hearing these days (like pieces attempting to convince the public that their nurse practitioner is every bit as capable as their primary care doctor), this is an attempt to prepare the public to take socialized health care...and like it.

And what are we getting from the expensive specialists? Better care? Better outcomes? The evidence suggests not. But patient satisfaction scores are beginning to take hold and more providers are eager to score well. So they are taking classes on how to listen and talk to patients. Now is our time to ask questions about options, generic drugs, costs of procedures and evidence to back up their decisions. Be an informed patient. http://whatstherealcost.org/video.php?post=five-questions

I am the recepient of a hip replacement who resides in NYC. The cost of the services of the surgeon was $17,000 plus the cost of an anesthesiologist. Both the doctor and anesthesiolist accepted my private health insurance which was about $8,500. So my question is: Where did you get the $4000 average fee for hip replacement? Please respond via my e-mail because I may need my other hip replaced.

I was surprised to hear this story from a program that I otherwise respect as a news source. Though I haven't seen the study that is quoted, I can whole-heartedly disagree with the basic premise that doctors' salaries are at the root of the current problems with health care economics. In fact, physicians' collective salaries account for far less than 10% of total health care costs in the US annually. I am currently in my 4th year (of 6) of surgical residency training, and very much enjoy what I do. Nevertheless, at this stage in my career I am without question devoting between 90-110 hours per week to my training when hours at the hospital, hours studying, and hours in preparation for operative cases are taken into consideration. This is in addition to 4 years of medical school and another 4 years in undergraduate school. I am presently in my early 30's, and have dedicated some of the best years of my life to pursue my career goals and to be able to meet the needs of my current and future patients. To pin the rising cost of healthcare on physicians' salariesis is both irresponsible and a tremendous insult. Though there are undoubtedly exceptions, the overwhelming majority of us do not go into medicine to make a quick buck, and the sacrifice required to treat our patients is substantial.

Average salary of $500K for ortho....seriously? Please don't try to rationalize this. The "Best and the Brightest" argument is lame at best. I appreciate the men and women in the profession but stop with the blather about salary justification.

I also cringed when I heard this story. I can guarantee that as a primary care pediatrician I never went into the field for the money. True, physicians are blessed with a nice income, but after one takes into account college and medical school debt, the actual hours worked that are not reimbursed, in addition to call, the money made is really not that extravagant. Medical school loan payments run about the equivalent of a mortgage payment, so in effect,most doctors are paying two "mortgages".

I am certain that insurance company executives are not rushing off to attend emergency deliveries of premature infants at 2 am in the middle of a blizzard, nor are they putting their own sick child's needs on the back burner to attend to someone elses child's illness. But I can guarantee they all make much more money than I do.

Taking care of my patients is a privilege and an honor and I do not regret my choice to deliver rural primary care for a moment. But if, as this story implies, those of us who are capable and willing to perform this service are the root cause of the high cost of health care, perhaps we can save the economy by making a career change and starting over in investment banking. I'm sure there is just as much societal benefit in making 3 to 10 times more money on Wall street while ripping off John Q. Public.

Has any one looked into how much work Drs. perform without any reimbursment? Talking to relatives, taking calls in the middle of the night to solve urgent issues,caring for indigent, underinsured or uninsured patients. filling devilish paperwork designed by insurance companies to delay or ration care. Perhaps Dr's should walk awy from the fee for service scheme and like lawyers, start billing on a hourly basis.

This study only looked at doctor's fees. It specifically did not look at drug prices or insurance company practices.


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