Volume and time

by rcentor on April 8, 2008

A commenter wrote yesterday that GPs in GB make $200 k and see 44 patients each day.  I do not have a source to verify that statement, but if true I do not see how it impacts our current debate.  As I have written many times, the biggest problem in providing excellent quality health care comes from not having enough time.  44 patients represents at least 5 patients each hour.  This rate is a recipe for lousy care.

We need our physicians to spend more time with each patient, not less.  The question here is one of value.  How much do you and should you value your physician’s time?  I will pick an arbitrary number here and say that a generalist is worth $100 per hour.  If you work 50 weeks at 8 hours each day that comes to $200 k.  Now the cost will be higher because we have to pay overhead (as much as 60-70% in many practices these days.)  We could decrease overhead if we just paid for time, without bureaucratic nonsense.

Paying for time would include the time for reviewing the chart, reviewing the lab tests, talking to you on the phone, and responding to your emails.  Alternatively, we could go with the retainer model and just pay a lump sum for the entire package.

Increasing volume is the solution that too many physicians take in order to increase income.  We can all understand why they take shortcuts, refer more quickly and go to expensive testing more quickly.  Our system does not penalize them for these indiscretions, in fact it rewards them by allowing them to increase volume.

Paying on volume leads to many perverse incentives.  Clearly volume is important.  We should develop true benchmarks of the ideal volume for different specialties (including adjustments for complexity.)

So I reject the comment (as did a later commenter.)  We probably should strive for outpatient generalists to see around 16 patients each day and inpatient generalists to follow approximately the same number.  This would allow the generalist to spend adequate time with each patient.  This would allow the generalist to spend some time thinking and reading about their problems.  This would increase patient satisfaction, quality of care and physician job satisfaction.

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{ 6 comments… read them below or add one }

Jared April 8, 2008 at 9:14 am

Why do physicians increase volume to create higher return before other things? As one of my Physical Chemistry instructors taught us; oftentimes it is instructive to look for the trivial solution–to find it and avoid it. Simply making up for smaller payment on volume is a trivial solution and should be avoided as an argument for diminishing return.

The issue that physicians must contend with if they wish to not fall into the trap of the trivial solution is figuring out how to optimize their practice in a way that they can understand the mechanics of. Most physicians do not self-identify as astute business-persons. In fact, I would posit that most primary care physicians are not in a position to even make a fundamental change in their business plan–short of breaking their contract with a group and going out on their own.

I agree that payment must be brought back to sane levels to ensure that primary care is interesting for physicians. But, I also think that medicine as a business is ignored by medical education, which places physicians at a disadvantage when it comes to how to think about optimizing their business so that they can succeed without falling into the trivial solution trap.

Aaron April 8, 2008 at 9:45 am

Can you translate this into dollar figures? I can speculate, but health care economics are far from being my forte.

What I would like to know is, based upon the wage you believe a primary care physician should earn, at sixteen patients per day, what average fee per patient is necessary to support that salary, and how does that compare to current fees charged?

Dr. Bob FP April 8, 2008 at 11:33 am

Some physicians have already gone outside of that solution. It’s variously called concierge care or low volume/low overhead. Many see 12-18 patients a day. They are often very happy physicians. Many do not take insurance and instead have a retainer or cash up front. Cuts their overhead to 30% or so instead of 50-60%. Actually allows for less expensive care. In my former practice we could have cut our fees in half if we quit accepting/working with insurance and instead did every thing cash up front.

dr. bean April 8, 2008 at 3:32 pm

If I had an overhead of 30% or so which I could do by renting a small space, taking cash up front and having no employees, I could make $120K/year (more than I make now) by seeing 12-18 patients/day if average receipts were approx $60 per patient! Not accounting for costs or fees for in-office testing of any kind. How much would you pay out of pocket for 30 minutes with a doctor who listened to you and thought about your problems even after you left?

Taking insurance doubles overhead due to increased administrative complexity. Additional employee/s (0.5-2.0 FTE depending on volume) additional space for employee/s, and billing whether outsourced or in house about 8% of receipts.

Above models are approximate and do not include health insurance for physician or staff, of course ;)

amy April 11, 2008 at 10:06 am

I agree, billing costs me 15$ per encounter and the amount of paper generated by insurance companies another 5$ per encounter, on average (time spent to sort, scan, shred or disregard). That means that a 50$ visit becomes a 70$ visit.

Dennis Blackmore April 18, 2008 at 10:55 am

I repeat, I want the best and brightest taking care of me………..They need to make a good living doing such.

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