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Billing Codes Determine Lower Physician Income for Primary Care and Non-Procedural Specialties
Arielle L Langer1, Miriam Laugesen2
1Brigham and Women's Hospital, Division of Hematology, Boston, MA, USA.
Insights
Physician income disparities are driven by payment structures, not training or demographics. Procedural specialties earn significantly more than non-procedural ones, highlighting the impact of the reimbursement system on physician compensation.
Area of Science:
- Health Economics
- Medical Practice Management
- Physician Compensation
Background:
- The income gap between primary care physicians and specialists is well-documented.
- The specific factors driving these physician income differences remain unclear.
Purpose of the Study:
- To investigate the drivers of income disparities among physicians.
- To compare the financial premiums associated with medical specialization.
- To analyze the impact of time spent on office visits versus procedures on physician income.
Main Methods:
- Utilized data from the Community Tracking Study (CTS) Physician Survey.
- Categorized medical subspecialties based on Medicare billing for Evaluation and Management (E&M) codes.
- Analyzed income differences while controlling for confounding factors like gender, practice type, and hours worked.
Main Results:
- Significant income variations exist across physician specialties, even after controlling for confounders.
- Specialization premiums ranged from 11.3% to 46.8% higher than family medicine.
- Procedural specialties earned 37.5% more than family medicine, compared to 15.3% for non-procedural specialties, after controlling for confounders.
Conclusions:
- Physician income differences are primarily a result of the healthcare payment structure.
- Reimbursement policies, particularly those favoring procedures over evaluation and management, significantly influence physician earnings.
- These findings suggest that payment structures, rather than additional training or demographics, are the main drivers of physician income inequality.
Abstract:
The income gap between specialists and primary care physicians and among specialists is well established, but the drivers of this difference are not well delineated. Using the Community Tracking Study (CTS) Physician Survey, we sought to isolate and compare premiums paid to physicians for specialization and the proportion of time spent on offices visit rather than procedures. We divided medical subspecialties according the proportion of Medicare billing for Evaluation and Management (E&M) codes for the specialty as a whole. We report substantial differences in income across physician specialty, and over 70 percent of the difference in income remained controlling for factors that may confound the relationship between income and specialty including gender, location and type of practice, and hours. We note a large variation in premiums for specialization: 11.3-46.8 percent above family medicine after controlling for confounders. Classifying medical subspecialties by E&M billing as procedural versus non-procedural specialties revealed clear income differences. Controlling for confounders, procedural medical specialties earned 37.5 percent more than family medicine, as compared with 15.3 percent for non-procedural medical specialties. This analysis suggests that differences in physician income and resulting incentives are a direct consequence of the payment structure itself, rather than compensation for additional years of training or a reflection of different underlying demographics.
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