The 5% Primary Care Bonus: More Trouble Than It's Worth?

One of the easy areas of agreement across the political spectrum is that primary care providers need to be paid more from both Medicare and private insurance. It’s such a strong consensus that the Senate Finance Committee includes multiple proposals to address the problem in the “policy options” document it released yesterday. The most straightforward of these proposals would be a 5% payment bonus for primary care providers and general surgeons through Medicare. It sounds pretty good – but in reality, it won’t even come close to solving the problem.

Let’s wrap our head around the payment problem by means of an analogy. Let’s imagine you’re fresh out of college or some other postgrad higher education program, with all the attendant student loans that implies. You’re offered two jobs. One of them is the Platonic ideal of the job you always wanted to have, and is a job that you know desperately needs to be done. The other is similar and in the same field, but isn’t exactly everything you dreamed it could be and, although important, isn’t as urgently filled. Job A pays $45,000. Job B pays $73,000. This is a scenario faced by recent graduates all the time. Plenty of people will go for the dream job at $45,000, but it should be obvious that, over time, more and more grads will gravitate to the $73,000 job.

Now what if some people decided to restructure the payment process for Job A to make it more competitive with Job B, particular since the number of people interested in Job A is dwindling and the need for more people doing that job is critical? Great idea – but they only make it "more competitive" by raising Job A’s salary to $47,250 a year. Does that make your decision easier? Not at all! They’ve raised it a measly $187.50 per month, or $43 per week. This isn’t a change – it’s a tinker.

I’m using lower dollar figures because what a physician in private practice gets paid is deceptively high, considering the doctor’s reimbursement pays for his/her salary, but also for nurses, bookkeepers, people to be on the phone fighting insurance companies who want to deny claims, etc. Not to mention that in order to become a doctor, they have to go through 8 years of higher education, 3-7 years of a residency where they’re working up to 80 hours a week for an average salary, and only making decent money post-residency. Plus, since most doctors work on a fee-for-service basis, their "salary" is entirely dependent on the question of how many patients they see and how many procedures they perform – hardly a set figure year-to-year. So to make the problem more relatable, for Job A, I substituted the $131,417 median salary for Family Practice doctors for the median income for households in the U.S. -- $45,000. Job B is the median salary for an Anesthesiologist -- $212,734 a year. Someone in Job B is, yes, still a doctor, still saving lives, still vital to our health care system and with a specialized set of skills worth much of that extra salary. But not a specialty that’s in an urgent shortage as primary care doctors or general surgeons.

Suddenly, that 5% bonus doesn’t look that great.

Here’s the other knock against it – it’s going to be a massive fight to put this into action. On pg. 10 of the Finance Committee’s document, right under discussing the 5% bonus, we get this humdinger of a problem:

MedPAC recommended in June 2008 that Congress enact a budget-neutral bonus for primary care services. For this reason, the cost of the bonuses in this option would be offset by an across-the-board reduction in payments for services under all other codes. Alternatively, the increases could be paid for through funding from other sources. However, this approach would require finding new offsets.

Danger! Danger!

Essentially, Sens. Baucus, Grassley et al. are saying this bonus must be budget-neutral. The money from it either has to come from cutting payments to other specialties (something they’re prepared to fight tooth and nail, in an all-physician civil war) or from coming up with completely new money out of thin air. Suffice to say, even getting this measly bonus will be a fight.

Look, we need to do a much better job of compensating primary care, particularly because if we succeed in extending coverage, we don’t have the doctors we need. There’s an argument to be made that we’ve lost a sense of parity in how we pay our doctors (anesthesiology is a rather tame example of what we pay even more specialized doctors – the median salary for neurosurgeons is almost $300,000). But it’s not going to be solved with giving primary care docs a 5% bonus. If we’re going to have this fight, let’s have it over a meaningful solution.

(Photo credit:  chego101 on Flickr.)