Holy shit! I'm rich!

Last week, for those of you who are keeping score, the government released its list of how much Medicare pays doctors. The total for 2012 was...

(drumroll)

$77 billlion dollars.

If you like zeroes, that's $77,000,000,000.

"Are you sure? That's a lot of zeroes."

Now, there are roughly 850,000 docs out there who take Medicare. Which means (on average) each of us is getting $90,588.24 from Uncle Sam (this is ONLY Medicare, not other insurance companies).

Of course, that isn't even close to the truth. The released data also shows that 2% of the doctors out there are getting 25% of the take. So for those 2%, they're each getting $4,529,411.76.

As I'd expect, none of those guys are neurologists. And the last number (as big as it is) is peanuts compared to what your average insurance company or hospital CEO got as a Christmas bonus alone.

"My kid found these. We didn't know what else to do with them."

So which docs are getting the big Medicare money here?

1. Hematology/Oncology

2. Radiation Oncology

3. Ophthalmology

4. Rheumatology.

WOW! Those guys must be rich!

Nope, that's not it either.

Figures are misleading. While I believe in transparency, the raw numbers can be manipulated easily to make them show pretty much what anyone (usually a politician) wants.

That giant government payout is, in large part, what they're getting for supplies. These specialties have a few things in common:

1. They're primarily office based.

2. They have high overhead costs.

3. The first three are at high risk of being sued.

4. The first 2 are dealing with horribly sick patients, which cost more money to take care of.

I'm sure you're saying "why isn't neurosurgery on the list?" The office-based cost is the main reason. Most of their good work is in a hospital, and the facility supplies the medical equipment, drugs, staff, and operating room. The surgeon, like me*, shows up and brings her expertise (and the charges for it) with her, but the rest of the costs (and billing for them) get paid to someone else. 

*That noise you hear is the horrified inhalation of neurosurgeons because I just mentioned them in the same sentence as neurologists.

So, okay, the oncologists must be rich.

Of course they are! They're part of the secret government-medical conspiracy that's making you smoke tobacco and eat horribly unhealthy food against your will, causing you to get cancer and need their services.

Get real. Yes, they're getting reimbursed a decent chunk of change. But that's gross, not net. Most oncology practices have an office infusion suite to do chemotherapy. This is done there because it's more convenient for the patient, and a helluva lot cheaper for the insurance, to do it in an office than a hospital. But cheaper is a relative term.

Let's look at drugs. One commonly used for breast cancer is Herceptin. This is given once a week, and the list price is $3344 per vial. Another one, Neupogen, is $310 a pop. There's a lot of them like that.

Yeah, but the doctor must charge, like, 2 or 3 times that amount, right? That's why they're rich!

Keep dreaming. You can charge whatever the fuck you want. Medicare will only pay you 106% of the MSRP. Which means, for that $3344 vial of Herceptin, you'll get roughly $3544 back.

So? The doctor is still getting a $200 profit on each vial! That's a lot, you greedy bastards!

Stuff it. Consider the following:

Infusion nurse: $40/hour + benefits.

Infusion chairs: $1500 each.

Mayo stand (a metal table, has nothing to do with condiments): $110 each.

Code cart fully loaded (because disasters happen): $1800 (and it's $1400 to reload it each time it gets used).

Cardiac defibillator (same reason): $1200

IV poles: $70 each

TV set and cable subscription (the patients need something to watch for a few hours)

Wheeled medical stool: $50 each

Then you get into bags of saline, IV tubing, needles, phlebotomy equipment, band-aids, gauze, other medications (Zofran, Benedryl, Phenergan)... you get the idea.

And all of that comes out of the Medicare payments. Of course, the raw number doesn't mention that key point at all.

"And another thing..."

Another point: like many docs these days, the oncologist may have an NP or PA seeing patients. Of course, that person is likely working under the doctor's billing ID (called an NPI). So if both of them get, say, $100,000 back from Medicare, it's listed as money that ONLY went to the doc. And what you're seeing doesn't take into account the salary, benefits, and malpractice coverage for the NP, not to mention all the office supplies and support staff.

Wait, so you mean the money meant for 2 or more people can show up in the Medicare data as being all paid to one doc? Exactly. Doesn't give you a clear picture, does it?

The other fields are similar. Radiation oncology? A radiation machine will easily set you back a few million bucks. Not quite the same as say, a sofa from Penny's. But it's necessary in this line of work, because you can't practice without it (trying to irradiate tumors with the stuff you scraped off your kids glow-in-the-dark Halloween costume isn't helpful).

Then you need trained techs to operate it. Federal licenses and certifications to handle radioactive equipment. And a company that supplies/disposes of used isotopes (selling them to Al-Qaeda is frowned upon).

Ophthalmology? Have you ever been to one's office? They don't have something as simple as my Queens Square reflex hammer ($14 on Amazon). The gadgets they use are big, and to fully outfit a decent ophthalmology office will run you $100,000 to $200,000  - before you can even start seeing patients. Having your cataracts done? Each lens costs the doctor from $1000 to $3000 depending on what you need, not including all the other supplies needed for surgery. So a lot of the money is going to cover those expenses, too.

Rheumatology, like oncology, deals with some pricey drugs. Remicade, for example, is $915 a vial from the company.

Then, for ALL doctors, you have to figure in the other office expenses: computers, printers, chart system, staff, office furniture, office machines, paper, pens, coffee maker....

Yeah, but you guys get most of your office supplies free from drug reps! Sorry, Charlie. That practice was banned in 2008. Now the only thing reps can give us is samples, patient education brochures (which I throw away), and a hurried lunch of tuna sandwiches.

Office space alone can eat you alive. Between Pissy and I we have 2100 square feet. And we're paying $5100 a month for that. That's likely more than your mortgage payment for a house of similar size. And our office doesn't have a pool or wet bar.

Malpractice insurance? For non-surgical fields it's anywhere from $30,000 to $100,000 per year (or more). Surgeons? $100,000 to $300,000 (and up) per year depending on the field. That comes out of your share of the $77 billion, too.

Then, when you finally collect your money, a billing company will get 5% to 10% of it.

So, this is not exactly a high-profit-margin field (medical students: GET OUT NOW). A pretty big chunk of the Medicare money goes to cover just the overhead. Running a medical practice is not something you want to do by cutting corners. When things go wrong, they can go VERY wrong.

I'm not looking for sympathy. I'm just trying to make the point that numbers like this are misleading, and can be twisted to mean whatever anyone wants them to. But when you see how much your doctor is getting for taking care of you, that's not all going in his/her personal pocketbook.

Far from it.

But that doesn't stop me, and most of us, from doing our best to care for you, every single day.