Doctors Getting a Taste of a New Kind of Medicine

Being a doctor isn’t what it used to be--in fact, cardiologists, neurosurgeons and other medical specialists may be the next American workers to form labor unions.

By most accounts, doctors are working 55 to 60 hours a week and earning less. Specialists are particularly hard hit: Orthopedists report a 20% to 38% fall in average income last year, depending on the overhead expenses of their practices.

The American Medical Assn.’s annual survey still shows rising incomes for all types of physicians--to as much as $279,000 a year for ear, nose and throat specialists and $117,000 a year for family practitioners.

But AMA economist James Moser says a downtrend may show up in statistics now being compiled for 1994, particularly as more physicians each year become employees of large medical groups rather than self-employed practitioners.

What is happening to America’s roughly 550,000 active doctors--just over half of them independent--provides lessons for anyone in business or pursuing a career.

With more political savvy, doctors might have feathered their nests last year when President Clinton’s grandiose health plan was struggling in vain to find support in Congress. But the AMA, miffed at White House aloofness, took the position that physicians would be better off without the government plan.

Yet government might have proved a softer touch than the current marketplace. “Doctors today are squeezed from above and below,” says a medical expert. From above, private insurers, employers and Medicare are cutting back as much as possible on expenditures. Meanwhile, the ranks of indigent patients increase, and physicians and hospitals treat them but have difficulty getting paid because insurers are cracking down on the practice of padding bills for full-benefits patients to absorb the costs of the uninsured. Such cost shifting has regularly been adding 20% or more to many hospital bills.

So doctors are in a squeeze and scrambling to affiliate with health maintenance organizations, to get patient referrals or to sell their practices to large medical groups such as Mullikin, Mayo Clinic, Cleveland Clinic and others.

Mayo Clinic, the century-old hospital and research center renowned for treating the most serious illnesses, has acquired seven medical practices within 120 miles of its Rochester, Minn., home. Most of the 341 doctors added to Mayo’s rolls are primary care doctors--the internists, pediatricians and obstetrician-gynecologists who are often the first to see patients.

Dr. Michael O’Sullivan, a hematopathologist, explains that Mayo needs such “first-contact physicians” to ensure itself patient referrals now that managed care has made medicine a battleground of each institution for itself--or “doc eat doc” as one wag puts it.

Yes, but is all this turmoil doing any good for patients or the quality of medical care in America? Fact is, trends are mixed, although the long-term outlook is not bad.

First, the emphasis on primary care--to treat patients simply and less expensively, before they require complex procedures--is a healthy development, one that has been called for since the 1970s.

But primary care can also become a form of rationing when the primary physician is designated as “gatekeeper,” the doctor responsible for holding down costs by keeping patients from more expensive treatment.

As medicine reorganizes for efficiency, a hefty oversupply of hospitals and physicians is becoming evident. But problems of surplus should solve themselves as hospitals consolidate and some physicians retire rather than face the requirements of enlarged patient rolls and weekend duties in managed care.

Medical practices are being examined for sale like any other business. “The most valuable practices are those with contracts to serve HMOs, perhaps with a revenue-producing laboratory attached,” says Richard Blacker, a lawyer with Weissberg & Aronson, a Los Angeles firm specializing in medical questions.

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Thus the field that grew to $800 billion in annual expenditure while remaining largely an activity of individual practitioners is becoming an industry. And doctors, who ruled the old system, are bearing the brunt of changes in lessened pay and job security.

Specialists are forming associations to ensure themselves work in a time of managed care and gatekeeping. If such specialist associations organize more than 30% of, say, the orthopedists or cardiologists in an area, they could be subject to antitrust laws. On the other hand, labor relations laws might be more applicable.

The example of foreign countries, where physicians are plentiful but earn relatively less money, is often brought up in debate. But in most foreign countries, medical education is government-financed and doctors are, in effect, high-status civil servants. Here, a medical graduate often must earn back $100,000 in school loans.

What shrewd observers say for certain, as turmoil in medicine continues, is that the pendulum will swing from today’s obsession with cost cutting. “Primary care is fine, but more specialized medicine is needed--especially with an aging population. People really do get sick,” says Dr. Schumarry Chao, a physician and consultant on medical economics.

Dr. Oliver Goldsmith, director of the Permanente Medical Group, which supplies physicians to the Kaiser-Permanente system, says specialists and primary care doctors working together, as they do at Kaiser and many other large institutions, is the real model for the medical future.

Meanwhile, as Americans struggle to achieve superior medical care at a price society can afford, we should understand where we are in the brief history of medicine in this country. Doctoring was a catch-as-catch-can business until the late 19th Century, and it became a profession only after doctors stopped fighting one another for fees and patients and began to set high standards for treatment.

By the late 20th Century, the United States enjoyed superb medicine for the great majority of its people, albeit in a system that grew unacceptably costly for industry and government.

Now patients are getting a dose of reality with rationing, and doctors are being humbled with lower pay.

Yet it’s not unrealistic to hope that with common sense and dedication, a good average level of medical care can be provided at an acceptable cost and that medicine will remain both an inspiring profession and a good job. That’s why it’s a healthy sign that young people are applying to medical school in record numbers.

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Managed Care Means Surplus Doctors . . .

In the extreme case that all medical care suddenly became managed care--shuttering many of America’s 6,600 hospitals--the oversupply of doctors would be acute in most medical specialties.

Area of Total managed- U.S. MD surplus Practice care demand supply percentage Psychiatry 9,451 35,163 272% General surgery 13,009 38,376 195% Neurosurgery 1,658 4,358 163% Cardiology 7,074 15,862 124% Anesthesia 12,435 25,981 109% Primary care 124,355 209,722 68% Orthopedics 12,325 19,138 55% Urology 6,356 9,372 47% Obstetrics/gynecology 27,026 33,697 25% Emergency Medicine 12,214 14,243 17% Thoracic surgery 2,100 2,063 (1.8%)* Radiology 15,088 8,492 (44%)* Other specialties 50,405 198,954 295%

* (indicates shortage)

Source: New England Journal of Medicine, Assn. of American Medical Colleges

. . . but Not a Lack of Interest in Medical School

Despite widespread reports that health care’s changing economics are making life difficult for doctors, applications to medical schools have soared in recent years, and med school remains hard to get into.

Year Total med school admissions New med school applicants 1994 16,287 45,365 1993 16,307 42,808 1992 16,289 37,410 1991 16,211 33,301 1990 15,998 29,243 1989 15,867 26,915 1988 15,969 26,721