Disparities in physician income are related to disparities in health

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A major focus of public health, about which I have written several times, is addressing the disparities in health arising from modifiable conditions (such as inequality of opportunity, income, and racial and ethnic differences). While it is common for those with privilege – wealth, health, opportunity – to believe that they have these privileges because they are “deserving”, i.e., because of their hard work, education, etc., such an outlook minimizes the critically important fact that there are lots of people who work just as hard and have very little. The “illegal immigrant”, working 3 minimum (or sub-minimum) wage jobs to try to just keep his or her family fed and housed, is not only not lazy, but working a lot harder than many of us who are able to enjoy weekends off, play golf, watch the kids’ sporting events.

So it is clearly not hard work alone. It is very much influenced by where you start, and what your opportunities have been. These are the social determinants of health (e.g., Social Determinants, Personal Responsibility, and Health System Outcomes, September 12, 2010) and the capability that people have of acting in healthful ways (Capability: understanding why people may not adopt healthful behaviors, September 24, 2010). It is common for people who have a lot to minimize, rather than to emphasize, the degree to which their position at the start of the race has affected their current position. Attacks on those who would seek to redress some of the most egregious inequities are still couched in terms of “economic class warfare” by those who have already won the war. Those with privilege are very concerned about change that would leave them with less of a leg up; they may give lip service to Horatio Alger heroes, but are more likely to wish to follow the model of George W. Bush. “If you’ve spent your entire life with the wind at your back,” a wise sage once noted (and I do not know to whom to attribute it), “a calm day seems unfair”. In terms of health, the connections are very clear. It is good for your health to be born rich. The Horatio Alger hero, pulled up by their own bootstraps, has worse health outcomes than the child born to privilege.

Health disparities, then, are real and important. But why should we – should anyone – be concerned about the disparities in physician income? After all, even the more “poorly” paid specialists, in primary care, make far more than the average American. Yes, they have worked hard to get into and through medical school and residency training, but, just as noted above, so have a lot of other people who will never make nearly as much. The problem is that, if the presence of a larger number/percent of primary care physicians is associated with improvements in the health of the population, and if the presence of wide disparities in income significantly influence students to choose higher paid specialties instead, then these disparities in health status are likely to continue and the overall health of the American people is likely to suffer. There is good data on both counts. Many of the posts in this blog have addressed the first, the positive influence of primary care on the health of the population (e.g., Lower Costs in Grand Junction: More Primary Care, Less High Tech, October 18, 2010; Primary Care, IMGs, and the Health of the People, August 14, 2010; and many others) and on health disparities[1]. I have also addressed the other point, the decrease in the number of students choosing primary care careers (e.g., Primary care specialty choice: student characteristics, July 12, 2010; Primary Care’s Image: A Problem?, November 17, 2009, and others).

A study published in the Archives of Internal Medicine by Leigh, et. al, “Physician wages across specialties”[2], is the most recent effort to quantify the differences. They utilized the large Community Tracking Study (CTS) of physicians from 2004-2005 to gather information on physician income. They grouped the physician responses into 4 broad categories (surgical, internal medicine and pediatric subspecialties [IMPSS], primary care, and other) and again into 41 specific specialties. They went beyond previous studies to calculate gross personal income on an hourly basis (thus controlling for hours worked per week) and did further adjustments to control for other variables, principally sex and age. They used a statistical manipulation to estimate incomes above the maximum set for the CTS (for some reason set at $400,000, much lower than many subspecialists make).

The outcomes were not surprising in comparison to previously reported data. In the 4 broad-group comparisons, primary care physicians averaged about $60/hr compared to IMPSS at $85, other medical at $88, and surgical at $92. In the single specialty comparisons, General Surgery was taken as a reference being actually near the middle ($86/hr), with the top incomes in neurosurgery ($132), radiation oncology ($126), and medical oncology ($114). At the bottom were family practice, general practice, general internal medicine, geriatric medicine, internal medicine/pediatrics, and “other” pediatric subspecialties (whichever those may have been) with a range of $50-$58.

There are several reasons to think that differences are, in fact, greater than those reported. There was only a 53% response rate to the CTS, and so we do not know if non-respondents made more, less or the same as respondents. “Hospital-based” specialties, specifically anesthesiology and radiology, which are among the highest-paid, were excluded. Other high-end specialties, such as cardiovascular surgery or transplant surgery, do not appear as specific specialties, and may have their incomes hidden when grouped with “thoracic surgery” or “other surgical specialties”. There are many sources of income for many physicians, including a variety of expenses that can be paid by practices and which would presumably be greater for higher income practices. Many highly-paid specialties are paid by hospitals directly (such as anesthesiology and radiology) or through “physician service agreements”. The correction used by the authors of the study for incomes over $400,000 could have been inadequate; certainly anecdotal experience in many locations would suggest that considering $400,000 as a reasonable top end for the highest paid physicians would understate that by at least half.
Nonetheless, the income differences, even in 2004-05, were impressive. Given the debt load that medical students (particularly those, obviously, from the less wealthy families) graduate with, the significant attraction to higher pay is clear.

The Wall St Journal, in two recent articles (“Secrets of the system”) published October 26, 2010, looked at the Relative Value Update Committee (RUC), a group of 29 physicians convened by the AMA from different specialty organizations that make recommendations to Medicare on how to pay physicians for their, well, relative value. One, “Physician panel prescribes the fees paid by Medicare” by Anna Wilde Matthews and Tom McGinty, describes how this group meets to divide up a pie that Medicare seeks to keep constant. In the other, “Dividing the Medicare pie pits doctor against doctor”, Matthews discusses the contentiousness that happened when primary care physicians (greatly outnumbered) challenged their surgical colleagues to get a higher portion of the money (that is, to revalue activities done by primary care physicians relative to surgical specialists).

In the same issue of Archives of Internal Medicine that Leigh’s article appeared in, Federman and colleagues[3] surveyed physicians about whether they thought reimbursements were inequitable or not; 78.4% agreed that they are, with not that much difference between generalists and subspecialists. However, when the idea of shifting payments from subspecialists to generalists was raised, there was a marked difference; 66.5% of generalists supported this, while only 16.6% of surgeons did; overall 41.6% were supportive and 46.4% were opposed. That is, for most specialists, paying generalists more is ok, but paying themselves less is not.

The WSJ‘s Matthews quotes an email from Jonathan Blum, deputy administrator for the Centers for Medicare and Medicaid Services (CMS) saying that the Medicare agency is moving to “improve Medicare's physician systems to correct historical biases against primary-care professionals." That needs to happen. The changes need to be dramatic. And they need to happen soon.

[1] Shi L, Macinko J, Starfield B, Xu J, Regan J, Politzer R and Wulu J, “Primary care, infant mortality, and low birthweight in the states of the USA”,J Epidemiol Community Health 2004;58;374-380
[2] Leigh JP, Tancredi D, Jerant A, Kravitz RL, “Physican wages across specialties: informing the physician reimbursement debate, Arch Int Med 25Oct2010; 170(19):1728-34.
[3] Federman AD, Woodward M, Keyhani S, “Physicians’ opinions about reforming reimbursement: results of a national survey”, Arch Int Med, 25Oct2010;170(19):1735-42.
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VISA and colchicine: maybe the banks and Pharma really ARE in it for the money!

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This is a guest posting by R. Stephen Griffith, MD, Chair of the Department of Family and Community Medicine at the University of Missouri-Kansas City.

A recent article explains in some detail one of the devious ways the banking industry, and the recently spun-off companies of VISA and MasterCard, make the money it takes to support the executive salaries and bonuses. (“How Visa, Using Card Fees, Dominates a Market”, Andrew Martin, NY Times, Jan 4, 2010)

Each time one of us swipes a debit card at a retail outlet, the retail outlet pays a banking institution a fee. That seems like an honest way to make a living, but the plot thickens. If we punch in the secret code associated with the card, the bank gets a few cents. If instead of using the code we sign the receipt the bank gets a bigger fee. Apparently there is no more expense associated with the latter method, but the fees negotiated by VISA et. al with the retailers provides for the higher fees. The individual banks then receive the fees, which encourages them to “push” more of the VISA’s (or which ever company is offering them the best deal). The credit card companies expand their reach, the banks make more money, and everyone involved in the deal is happy. In fact, the higher the cost per transaction the credit card company can negotiate makes more money for the bank, and so a bidding war develops in which the higher the fee, the more the banks gravitate to that company. The fee can be up to 75 cents per transactions—many multiples of the fee for a swipe and use of the code. This is transparent to the consumer, who willingly signs or puts in his/her code as requested by the retail outlet. Of course, the unwitting consumer eventually pays the extra expense (passed on from the retailer as part of the cost of doing business). Just another way for the banks to make a living.

There are those of us who would suggest that this is “gouging” the customer and there should be some repercussion to the perpetrators. I was among the inflamed and insulted when I read the article. But then this horrible thought crossed my mind: as a well meaning and cost conscious family physician, how many times have I committed the same offense?

The relationship between physicians and Pharma has been a topic of discussion since I was in medical school, although until relatively recently I have seen very little response from the medical community. The representatives of Pharma host our meetings and visit our offices, give us food, pens, pads, tickets to games, sometimes even trips to nice places. Associated with the gifts is also free “education” about why the product about which they are educating the physician is better than generic or “me, too” drugs made by another company. The docs are given samples which they can provide their patients to try the new drug out and “help save money for the patients.” Of course, if the medication works, a prescription for the drug will be given. The extra expense (sometimes an extraordinary amount of extra expense!) of the newer drug is borne by the patient or the patient’s insurance after a co-pay (which results in higher premiums the patient pays.)

So the medical community’s “scam” is we get lots of benefits and the expense of those benefits is borne by someone else—our patients.

To be fair, not all physicians accept gifts from Pharma. And in the last few years or so, the value of the gifts has been more restrained. And a growing number of physicians are refusing to even meet with representatives from Pharma, refusing the samples and the false economy of providing them, refusing the gifts and “education”. Creating distance from Pharma is a good thing—they are as fun to hate as the banking industry. And if you doubt the amount of greed in Pharma, please read this: “An Old Gout Drug Gets New Life and a New Price, Riling Patients”, Jonathan D. Rockoff, Wall St. Journal (and below, as it may not be completely available on the WSJ site.)

The article is about colchicine, a drug for the treatment of acute gout (and a few other things) that has been around for more than a century—long before the advent of the FDA. The FDA has encouraged pharmaceutical companies to study some of the older drugs for true effectiveness, and the company can then apply for a three year patent on the medication. URL Pharma, Inc. did the clinical trials on less than 1,000 patients, and proved that a drug everyone already knew worked, worked. Amazing! They received a three year patent, and now a pill that was $4 per month long before the $4 per month plans existed, is $5 per pill! Since it is usually given twice a day, the drug will now cost patients $10 per day when it formerly cost about a quarter.

Stories like this and the one about banks makes it easy to feel distaste for the banking industry and Pharma. Where is the justice in banking executives making millions and then being bailed out by taxpayers? Where is the justice of Pharma making huge (I would argue inappropriately huge) profits from the ills of our patients? I just wish the profession of medicine (and I) hadn’t played a part.


(From the Wall St. Journal),
An Old Gout Drug Gets New Life and a New Price, Riling Patients
By JONATHAN D. ROCKOFF
A centuries-old drug used to treat excruciating gout pain had cost just pennies a tablet—until last year. Now, the retail price has skyrocketed to more than $5 and some of the manufacturers have ceased production amid a battle over marketing rights.
The tale of how this common gout drug, colchicine, became the costlier branded drug Colcrys offers a window into the Byzantine world of drug pricing. The price rise is a consequence of a Food and Drug Administration effort to improve the safety of long-used but unapproved drugs, with a trade-off often made between drug affordability and safety.
In July 2009, a Philadelphia drug maker received FDA approval to exclusively market colchicine for gout attacks for three years. The company, URL Pharma Inc., was taking advantage of a push to bring medicines predating the FDA, like colchicine, under the agency's regulatory umbrella. The FDA offers exclusive marketing rights if a drug maker conducts clinical trials.
URL Pharma had commissioned studies that confirmed its colchicine product's safety and efficacy, while demonstrating it should be taken at a lower dose than typical and not used with certain other medicines. The company is marketing its drug as Colcrys—and the retail cost averages $5 per pill, according to DestinationRx, a health-care data provider.
URL is also suing longtime manufacturers of unapproved colchicine, saying the companies are now illegally marketing their products. Some of the companies are fighting the lawsuits. Some themselves have raised prices—including one increase of just under a dollar per tablet to $1.17, according to DestinationRx. The higher price for Colcrys was first reported by Kaiser Health News.
There were 3.5 million prescriptions and $6.4 million in sales in 2008, according to the most recent data available from IMS Health, a drug-data firm.
"It's not a new product. It's been out for hundreds of years. To all of a sudden have to pay $125 or $150 a month, after it only cost $5 or $10 a month, is a real problem," said Stanley Cohen, a Dallas doctor who is the president of the American College of Rheumatology. He met with the FDA to express concern about the price increase.
The chief executive of URL Pharma, Richard Roberts, said that it priced Colcrys in line with other approved, branded drugs used to treat gout pain. To help patients afford Colcrys, Dr. Roberts said, the company is offering to pay a portion of co-pays, and it is providing a three-months' supply to low-income patients for $15.
Eileen Wood, vice president of pharmacy and health-quality programs at CDPHP, an insurer in New York state, said insurers will have to absorb much of the added expense. URL's contribution was "not any new therapeutic tool, not new science; they just added cost," she said.
Nancy Sparks Morrison, a retired schoolteacher who suffers from familial Mediterranean fever, an inflammatory disorder that's treated with colchicine, said she is buying colchicine from Canada because she can't afford Colcrys. Ms. Morrison said she plans to get help from URL Pharma to pay for Colcrys because the company has just expanded its assistance program. "I'm retired on Social Security, and I have a small pension," said Ms. Morrison, 71 years old, who lives outside Charleston, W.Va.
The price increase is an unintended consequence of the FDA's nearly four-year-old initiative to regulate unapproved drugs. These medicines were sold before the FDA was established, and therefore weren't required to undergo approval. After decades of use, the medicines are considered safe by doctors, but haven't been proven to satisfy the agency's standards. Colchicine's use has been traced back to the sixth century, according to the FDA.
Seventy drugs that were grandfathered have been approved since the FDA began its initiative, most notably pain reliever Vicodin, from Amneal Pharmaceuticals LLC, the FDA said.
The FDA had hoped a significant price increase wouldn't follow Colcrys's approval and regrets the increase, said Janet Woodcock, director of the agency's Center for Drug Evaluation and Research. Dr. Woodcock encouraged more competition, saying another company could seek approval for colchicine's regular use in gout, rather than the acute use that URL Pharma received approval for.
There had been no standard for dosage before FDA approval. Colchicine's excessive use can cause side-effects, such as severe diarrhea that is potentially fatal. The FDA said it receives reports of five deaths a year, on average, involving patients who took colchicine tablets.
"We took bad guidance, even guesswork, and made this evidence-based medicine," Dr. Roberts said.
Closely held URL Pharma, which is owned by a hedge fund, a private investor and employees, is a longtime seller of generic drugs, including colchicine. When the FDA launched its push, the company began searching for those with safety risks whose patients could benefit from clinical testing, Dr. Roberts said.
URL Pharma said its 17 clinical trials of colchicine involved a total of 988 patients. The trials showed that gout patients need take two tablets after an attack and one more an hour later, the FDA said. Trials also demonstrated side-effects from use with certain other medicines, including some antibiotics and antihypertensive medicines. Those are now flagged on the label of Colcrys.
After obtaining FDA approval of Colcrys, URL Pharma went to federal court to sue manufacturers of colchicine, including Excellium Pharmaceutical Inc., Vision Pharma LLC, Watson Pharmaceuticals Inc. and West-Ward Pharmaceutical Corp., saying they have been illegally marketing their colchicine products since Colcrys's approval. A fifth company, Qualitest Pharmaceuticals, settled and stopped production. The four companies are fighting the lawsuits.
"You have this product out for at least a hundred years and all of a sudden it's no good?" said Lou Dretchen, who oversees sales and marketing at Excellium of Fairfield, N.J. Mr. Dretchen said the small, closely held generic drug maker stopped colchicine production after URL Pharma sued. The other companies declined to comment.
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