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Compensation is key to fixing primary care shortage


Money talks.

The United States faces a serious shortage of primary care physicians for many reasons, but one, in particular, is inescapable: compensation.

Substantial disparities between what primary care physicians earn relative to specialists like orthopedists and cardiologists can weigh into medical students’ decisions about which field to choose. Plus, the system that Medicare and other health plans use to pay doctors generally places more value on doing procedures like replacing a knee or inserting a stent than on delivering the whole-person, long-term health care management that primary care physicians provide.

As a result of those pay disparities, and the punishing workload typically faced by primary care physicians, more new doctors are becoming specialists, often leaving patients with fewer choices for primary care.

“There is a public out there that is dissatisfied with the lack of access to a routine source of care,” said Christopher Koller, president of the Milbank Memorial Fund, a foundation that focuses on improving population health and health equity. “That’s not going to be addressed until we pay for it.”

Primary care is the foundation of our health care system, the only area in which providing more services – such as childhood vaccines and regular blood pressure screenings – is linked to better population health and more equitable outcomes, according to the National Academies of Sciences, Engineering, and Medicine, in a recently published report on how to rebuild primary care. Without it, the national academies wrote, “minor health problems can spiral into chronic disease,” with poor disease management, ED overuse, and unsustainable costs. Yet for decades, the United States has underinvested in primary care. It accounted for less than 5% of health care spending in 2020 – significantly less than the average spending by countries that are members of the Organization for Economic Cooperation and Development, according to the report.

A $26 billion piece of bipartisan legislation proposed last month by Sen. Bernie Sanders (I-Vt.), chair of the Senate Health, Education, Labor, and Pensions Committee, and Sen. Roger Marshall (R-Kan.) would bolster primary care by increasing training opportunities for doctors and nurses and expanding access to community health centers. Policy experts say the bill would provide important support, but it’s not enough. It doesn’t touch compensation.

“We need primary care to be paid differently and to be paid more, and that starts with Medicare,” Mr. Koller said.

How Medicare drives payment

Medicare, which covers 65 million people who are 65 and older or who have certain long-term disabilities, finances more than a fifth of all health care spending — giving it significant muscle in the health care market. Private health plans typically base their payment amounts on the Medicare system, so what Medicare pays is crucial.

Under the Medicare payment system, the amount the program pays for a medical service is determined by three geographically weighted components: a physician’s work, including time and intensity; the practice’s expense, such as overhead and equipment; and professional insurance. It tends to reward specialties that emphasize procedures, such as repairing a hernia or removing a tumor, more than primary care, where the focus is on talking with patients, answering questions, and educating them about managing their chronic conditions.

Medical students may not be familiar with the particulars of how the payment system works, but their clinical training exposes them to a punishing workload and burnout that is contributing to the shortage of primary care physicians, projected to reach up to 48,000 by 2034, according to estimates from the Association of American Medical Colleges.

The earnings differential between primary care and other specialists is also not lost on them. Average annual compensation for doctors who focus on primary care – family medicine, internists, and pediatricians – ranges from an average of about $250,000 to $275,000, according to Medscape’s annual physician compensation report. Many specialists make more than twice as much: Plastic surgeons top the compensation list at $619,000 annually, followed by orthopedists ($573,000) and cardiologists ($507,000).

“I think the major issues in terms of the primary care physician pipeline are the compensation and the work of primary care,” said Russ Phillips, MD, an internist and the director of the Harvard Medical School Center for Primary Care, Boston. “You have to really want to be a primary care physician when that student will make one-third of what students going into dermatology will make.”

According to statistics from the National Resident Matching Program, which tracks the number of residency slots available for graduating medical students and the number of slots filled, 89% of 5,088 family medicine residency slots were filled in 2023, compared with a 93% residency fill rate overall. Internists had a higher fill rate, 96%, but a significant proportion of internal medicine residents eventually practice in a specialty area rather than in primary care.

No one would claim that doctors are poorly paid, but with the average medical student graduating with just over $200,000 in medical school debt, making a good salary matters.


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