Medicare Payments to Physicians and Other Providers: Analysis by Type of Provider.

Surprises, Disappointments, Confirmations, and Puzzles.

Most would agree, that transparency and accountability are in general, desirable. It does not necessarily follow however, that disclosure of previously hidden, obscure, or obtuse information arrives free of embarrassment for some or confusion for others. So it is with the recent unprecedented release by the Centers for Medicare and Medicaid Services (CMS) of the volume and cost of many of the services provided to some Medicare beneficiaries. Bothe the professional and lay media is fully energized with attempts to explain, excuse, or otherwise draw meaning from this voluminous and difficult-to-embrace set of data. Frankly, I have been rewarded with both surprise and disappointment, and with the satisfaction of solving puzzles. Clearly there is information here that both the professional and lay public must address if we are to benefit from a fair, effective, and efficient system of healthcare.

Ranking of Provider Types and Payments.
As a first step, I have broken down the 9+ million-item database by type of provider. There are 89 different types identified. (View the list here.) I attach 4 different PDF documents summarizing the same data in different views sorted by provider type, the number of individual providers in each provider type, the aggregate Medicare payments to each type, and the average payment for each provider of a given type. Please remember that there are many caveats attached to this data that must necessarily limit the conclusions that might be drawn. These are discussed by me in earlier articles of this series, and by others. Be that as it may, the view from 40,000 feet is instructive and shows us where to target more detailed analysis.

Numbers of Providers.
The five provider types with the largest number of individual providers in decreasing rank are: Internal Medicine, Family Practice, Nurse Practitioners, Physicians Assistants, and Emergency Medicine. (View the entire list here.) If we recognize the amount of basic care that is provided in our emergency rooms, all five of these groups are heavily involved in primary care. We must recognize however that Internal Medicine may include some sub-specialists, and that many Nurse Practitioners and Physician Assistants serve in specialty settings. This medical demographic points out a tension underlying policy discussions of the relative balance of income between primary care physicians and specialists. Because of the volume of care they provide, even small increases in reimbursement for primary care services adds up to large sums.

The only other physician-associated groups in the numerical top 10 are Anesthesiology and Chiropractic. Also in this top 10 are CRNA anesthesia nurses, Physical Therapy, and Mass Immunization Roster Biller– whatever that is.

Providers for Old People?
In an insurance program set up for old-timers like me, the number of specialists specific for geriatrics is positively puny. Out of some 880,000+ individual providers, the number of individual providers for Geriatric Medicine, Geriatric Psychiatry, and Hospice and Palliative Care are 1763, 113, and 312 respectively. (For comparison, there are 310 Sports Medicine providers!) This is not to say that other providers cannot provide appropriate quality care, but the paucity of providers whose main business is tending to the needs of the elderly should raise some eyebrows.

Providers for Young People?
The presence of Pediatric Medicine and Certified Nurse Midwife in this list of Medicare provider types may surprise many, but recall that the Medicare program also provides medical care for those on Social Security Disability and in the nation’s chronic kidney disease program. It should be no surprise that such patients require more services than the average Medicare beneficiary. This is yet another in a long list of reasons why our healthcare system needs to be overhauled in the interests of equity and efficiency.

New Specialties for Modern Times.
I was frankly surprised to see Interventional Pain Management ranked at #50, and Pain Management at #57. When I was in medical training, I was unaware there was such a specialty. Indeed, given that pain has always been one of the more frequent reasons someone seeks a physician, management of pain was considered part and parcel of the practice of medicine. My understanding of the reasons for the rapid growth in this largely uncredentialed area is a subject for another time.

Which Provider Group Gets the Money?
In the top 10 ranked by aggregate Medicare payments are in descending order: Internal Medicine, Ophthalmology, Ambulance Service Suppliers, Clinical Laboratory, Family Practice, Diagnostic Radiology, Hematology/Oncology, Ambulatory Surgical Centers, and Dermatology. (View the entire list here.)

Sadly, among the bottom of the list are Public Health Welfare Agency, Geriatric Psychiatry, Preventive Medicine, Hospice and Palliative Care, and Registered Dietitian/Nutrition Professional. Where we put our collective money says somethings about our priorities, or at the very least where we are willing to be led by the nose.

Where the Big Bucks Go.
A number of the top provider groups collecting in billions of dollars in aggregate are large companies such as ambulance providers, clinical laboratories, ambulatory surgical centers, and diagnostic radiology. (See the entire list here.) Nonetheless, many provider types dominated by physicians are also in the billion-dollar plus group. These include Internal Medicine, Ophthalmology, Cardiology, Family Practice, Diagnostic Radiology, Hematology/Oncology, Dermatology, Emergency Medicine, Orthopedic Surgery, Nephrology, Radiation Oncology, Urology, Pulmonary Disease, Gastroenterology, Neurology, and Rheumatology. As a former rheumatologist, the inclusion of Rheumatology in this list bowled me over. A small specialist group is drawing down a remarkable amount of Medicare payment.

What Are We Paying For?
There is already a great deal of national attention being given to apparent discrepancies including the large payments to ophthalmologists and rheumatologists. A great portion of the payments to these providers is for the stunningly expensive medicines billed for by some. Ordinarily, Medicare Part B does not pay for drugs, but exceptions have been made for some medicine administered in physicians offices. (A triumph of the effectiveness of lobbying.)

For the ophthalmologists, a single drug (Lucentis) used for the treatment of macular degeneration is the hero (or culprit). The disturbing part of that story is that an alternative drug is available that is just as good but costs mere pocket change in comparison. It is impossible not to consider the hypothesis that the decision to use the expensive drug is being driven in at least some cases by the benefit to the health professional’s cash flow rather than any benefit to the pocketbook of the patient. More and more, the concept of “financial toxicity” is entering the decision-making vocabulary of responsible health professionals – as it should. [I am particularly interested in looking into the drugs used by rheumatologists. Patients with rheumatic disorders have, in my opinion, been raked over the coals by the pharmaceutical industry.]

Only today, USA Today highlighted a report by the Center for Responsible Politics detailing that between 2009 and 2013, the 10 drug companies that make the most money from doctors using their products on Medicare patients spent almost a quarter of a billion dollars to lobby Congress and the Executive Branch of federal government. These include manufacturers of the drugs used by ophthalmologists and rheumatologists. This represents a triumph of the industrial-legislative complex that is extraordinarily effective in turning your dollars into theirs. Because we have acquiesced to this, we have little right to complain.

What Should We Be Paying for?
Readers of these articles already know that I am a fan of evidence-based medicine and believe that neither public or private insurance programs should have an obligation to pay for things that don’t work, or are otherwise medically unnecessary. Using a $1000 drug when a $10 one will do is such an animal. In that vein, I was personally surprised to see that one of the larger provider types in this Medicare program was Chiropractic– #14 on the list. In terms of aggregate payment, Chiropractic received higher payments than Endocrinology, Neurosurgery, Clinical Psychologist, Mass Immunization Biller, Critical Care, Cardiac Surgery, Geriatric Medicine, and many other of the science-based medical professions. I do not mean to imply that everything we “allopathic” MD and DO physicians do is medically effective or necessary– indeed, much of it is not. Neither can I claim a high ground that my profession is free of the taint of past (or even contemporary) abuse or quackery. In my personal opinion however– shaped as it is by a career in musculo-skeletal medicine– Chiropractic, even in its more recent attempts to deal with the contemporary scientific world does not meet the criteria for medically effective and necessary therapy. In my opinion, reliance on lobbying and marketing rather than science has led to Chiropractic’s inclusion on this Medicare Provider list. I believe that this and other discussions about where we should put our healthcare dollars must be on the table regardless of the financial interests of any group of providers. It will not be an easy discussion.

Payments to individual providers.
For my final view of payments to providers, I calculated the Payment Per Provider by dividing the aggregate Medicare payment for a given provider type by the number of providers in that group. (View the list here.) While interesting, it is this calculation that is most difficult to interpret. In many ways, we are comparing apples to oranges. It is no surprise to see that the highest payments per provider are going to large businesses. Other provider types are mixes of solo practices and larger businesses; physicians and non-physicians; different kinds of services such as drugs, procedures, or cognitive professional services; have different patient mixes; are provided in different professional and geographic locations; and the like. Medicare payments must cover both the professional service of the provider and the office overhead which varies considerably. Meaningful insights in this area will require drilling down into the nature of the specific services provided. CMS has provided its own portal to these more detailed services on its website which I recommend to readers. [This site does not provide the aggregate payment to individual providers, only the breakdown by services.]

Why Let Details Get in the Way of a Good Story?
Nonetheless, the ranking of provider type by payment-per-provider is interesting and had some surprises for me. The top 10 in decreasing rank are: Clinical Laboratory, Radiation Therapy, Portable X-Ray, Ambulatory Surgical Center, Ambulance Service Supplier, Slide Preparation Facility, Hematology/Oncology, Radiation Oncology, Ophthalmology, and Medical Oncology. It’s clear that some of the biggest professional dollars are cancer-related. At number 11 is my own provider type– Rheumatology. Its place on this list is in large measure due to its emulating the business plan and lobbying strategy of the oncology community. Children with arthritis were trotted into legislative offices to support the argument that rheumatologists should share the same payment structures as oncologists. The campaign obviously worked. Much to my amazement, individual Rheumatology providers receive higher Medicare payments than Cardiology providers who weighed in at #14, beating out in any event, #15 Dermatology, and #16 Interventional Pain Management. What accounts for these differences and all the others on the list? There are obviously many more stories to unravel. Surely, if nothing else, there must be a better way to provide medical transportation!

Do Such Data Have Any Usefulness?
Of course they do. Many assumptions will be challenged. Surprises and disappointments will be found. Questions are being raised that deserve to be answered. We will identify mismatches between the medical needs of the elderly and the number and cost of providers necessary to serve them. Some inefficient or fraudulent providers will be identified and expelled from the program. But perhaps most importantly, we will finally begin to ask and answer questions about what we are spending, what we are buying, and whether it is worth it. If we cannot find ways to provide adequate effective medical care more efficiently, our entire health care system is doomed to failure no matter what philosophical or political system holds sway at the moment. Making believe that the healthcare bubble will never burst makes as much sense as denying global warming or evolution. Single payer looks better and better to me. It has to be an improvement over what we have now. Give us some alternatives in the comments below?

Enough for now! More to come as I play with these numbers some more. What do you see as you look at these numbers and rankings? What riles you up? What are you glad to see? What do you think I should focus on next?

Peter Hasselbacher, M.D.
President, KHPI
Emeritus Professor of Medicine, UofL
April 25, 2014

List of Medicare Payments to Physician & Other Providers (PDF Documents):
Alphabetical by provider type.
By number of providers in type.
By aggregate payment to provider type.
By payment-per-individual provider.

 

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