Monday, August 11, 2014

From Christopher Gregory: What's Wrong with Profits in Medicine?

Now I'm turning the blog over to Dr. Christopher M. Gregory, a fellow Texan who runs the DocOnomics blog ( He sent an e-mail recently which so nicely, and briefly, captured a large issue that has perplexed me that I couldn't help but ask him to reprint, and he kindly consented:

This Modern Healthcare article Another Year of Pay Hikes for Nonprofit Hospital CEOs galls me. Almost as much as this article that reported the director of interventional cardiology at NY Mt Sinai was paid almost $5 million a year for being the rainmaker there, where far more stents are done than the national average.    

As I consider the proliferation of waste in the form of freestanding ERs, urgent care clinics, and shiny new hospitals popping up, and more doctors being bought off into economically forced subservience, I see nothing but the extreme excesses in our system. And for that there is a small group of these so-called “not-for-profit” CEOs getting pay packages that would choke a horse. Boards and compensation consultants continue to cite market forces—the need to keep up with peers to hold onto skilled healthcare leaders—as the main reason for the increases. The market forces they refer to are the market forces of excess, waste and profits that continue to make life increasingly intolerable for the group of physicians – primary care physicians – that would make this system much better if we let sanity retake the high ground. These high-talent CEOs are especially valued for the business smarts needed to make sure we are continuing to pay such disproportionate amounts for the unnecessary, costly care in this country .

To be precise, these pay packages are needed to keep these high-power hospital businessmen in the business of maintaining the well-oiled machine that is swallowing up nearly 20% of our GDP. And yet, millions of Americans can’t afford to get the care they need.  

Total cash compensation grew an average of 24.2% from 2011 to 2012 for the 147 chief executives included in Modern Healthcare's analysis of the most recent public information available for not-for-profit compensation. Of those 147 CEOs, 21, or 14.3%, saw their total cash compensation rise by more than 50%.

I talked with Dr Bob Kramer this morning. He said that it will be an uphill battle getting ologists to passionately endorse a cutback in the sorts of conspicuous consumption that nets them many multiples of what PCPs are paid, and continues to siphon off the ranks of potential primary care doctors in training. We are going to reap a medical, economic whirlwind for all of this foolishness as we continue to lose the numbers of physicians who would serve us best on the front lines. If only we could overcome the entrenched stupidity of organizations like the AMA and the RUC, that keeps PCPs from making the economic and care-centric progress that would make our healthcare system run so much better.

What can be done – what group of physicians around the country – will stand up and make a definitive statement that the intensifying black hole of the overheated healthcare “business system”, with its goal for more money and more influence, is taking us in a terribly wrong direction? As my Canadian healthcare friend once pointed out, there is a healthcare noose around our national neck, and the “system” is the hangman. 

Christopher M. Gregory
1705 River Birch Drive
Flower Mound, TX 75028

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