What? Doctors get paid?

Of course they do. Medicine is a profession but it’s also a job.  We must support our families just like everyone.

Before insurance companies and Medicare/Medicaid, patients were personally responsible for their medical debts and physicians determined their charges. By the time Medicare/Medicaid came along in 1965 medical insurance was well established. Physicians continued to set their own fee schedule.

In the late 80s and continuing, Medicare (a national program) and Medicaid (a state program) began to set their physician fee schedule. They determined what they would pay for a variety of procedures and patient care activities. A large committee orchestrated by the AMA meets several times a year to review and revise these payment amounts and establish values for new procedures. (More details in my next blog.) It has functioned reasonably fairly but for many physicians the reimbursement from Medicare barely exceeds the cost of providing the service and Medicaid reimbursement is even less.

Starting in the early 80s managed care programs began to pick up steam and HMOs and insurance companies began to set their fee schedule, to tell both physicians and hospitals what they would pay. As the years went by insurance companies began to piggyback on the Medicare process and now most insurance fee schedules are based on the Medicare amount. For example they might contract with a surgical group to pay 125% of Medicare. The physician group can negotiate the terms of a contract but the options frequently boil down to agreeing to the amount or being shut out from being a provider for that insurance plan. Imagine a world in which you tell your plumber that you and your spouse have predetermined what you will pay and don’t care what his expenses are or bill is.