Fee-for-service health care system deserves scrutiny – National Consumers League

By Sally Greenberg, NCL Executive Director

A new study reveals that doctors’ fees and salaries – especially those of medical specialists – in the United States are much higher than they are in other western countries. That actually shouldn’t come as a surprise. As Atul Gawende has written in a New Yorker magazine piece entitled “The Cost Conundrum,” a fee-for-service system of health care means that doctors get paid per procedure, so the more procedures they do, the more they get paid. There’s every incentive, then, for them to recommend medical procedures even when they may not be needed.

What surprised me about this study, done by Columbia University professor Sherry A. Glied (who now works for HHS), and one of her Columbia colleagues, was that the average orthopedic surgeon in the United States earns an average of $442,450! That means figuring in all of the doctors across the country, in expensive and less expensive communities, that’s the average. That’s a lot of money to earn in one year. In other countries, the average for orthopedic surgeons is more like $210,000.

Even American primary care doctors earn 1/3 more than their counterparts in places like Australia, Canada, France, Germany, and the UK. The study concludes that the inflated cost of physician salaries in the United States is driving up the cost of health care without corresponding benefits to patients overall health.

I respect and admire doctors, and I understand that they are highly trained professionals who save lives and that most are deeply committed to their patients. But the payment model of fee-for-service for doctors must not be exempt from scrutiny as we seek to reduce the cost of health care in the United States.