What Surgeons Get Paid, and What Patients Think Surgeons Get Paid

(Photo: kcxd)

Jared Foran, an orthopedic surgeon in Denver, is a co-author of a new study called “Patient Perception of Physician Reimbursement in Elective Total Hip and Knee Arthroplasty” (PDF here). The authors surveyed 1,200 patients to see how much they thought orthopedic surgeons should make and what Medicare actually pays for a hip or knee replacement.

In an e-mail, Foran describes their results:

On average, patients thought that surgeons should receive $18,501 for total hip replacements,  and $16,822 for total knee replacements. Patients estimated actual Medicare reimbursement to be $11,151 for total hip replacements and $8,902 for total knee replacements.  Seventy per cent of patients stated that Medicare reimbursement was “much lower” than what it should be, and only 1% felt that it was higher than it should be.

In reality, surgeons get paid on average $1,378 for a total hip and $1,430 for a total knee.  Thus patients were off by an order of magnitude in their estimates!  The disconnect in public knowledge seems extreme.

In short, patients — the most important part of all of health care policy decisions — have absolutely no clue how much doctors get paid.  They think we get paid (or, at least, deserve to) about 10 times more than we actually do!

Foran tells us that similar studies have been done for spine surgery and sports medicine, with similar findings.  


SAO

If the average person thinks doctors get paid 10 times what they actually get paid, then any public opinion that Medicare underpays is pretty worthless. That being said, to what extent do patients pay attention to the break out of costs. Between the cost of the device, the hospital fees, the nursing, radiology and anesthesiology what is the cost of a replacement?

Benjamin

I wonder if there is a disconnect in perception. There is a clear difference here in how much is paid for the surgery, and how much the doctor or surgeon actually receives. My thoughts are that many of those questioned may be answering how much they think these surgeries cost, rather than how much a doctor or surgeon receives for the actual procedure. It has been my experience that a great deal of population is unaware of the disparity between the cost of items, and the profit or compensation received for selling those items.

DanSanto

My brother's knee replacement was over $22,000 by the time all was said and done. I'm sure the surgeon only received a portion of that.

I also suspect the question's responses are being skewed by what the respondents have in mind for the total cost.

Stew

If you look at the pdf link, the survey attempts to clarify: "The fee includes the operation itself, the time your surgeon spends with you in the hospital and his or her care for you for 90 days after surgery. The fee DOES NOT include preoperative evaluation or the fee the hospital gets paid." quote from the article.

jeff

I've got some nice vinyl siding I'd like to sell to those old folks

Valpey

This is about as useful as a survey of parents of what they think a public school teacher should be paid per student per hour of instruction.

Neil (SM)

What a coincidence! I'm not a doctor or a teacher, but I likewise think I deserve to get paid about 10 times more than I actually do!

Eric

Of course patient estimates are high. It's asking the guy who just had his knee replaced how much of someone else's money he would give to the doctor who just made his life much better. I'm surprised the dollars weren't measured in gajillions.

AK

I think its more to do with people seeing their doctor's bill or talking to friends about the doctors bill for these surgeries. So the hospital charges 20-30k for the procedure, so of course people may think doctors make 15k for a procedure. After all the paying professions are bankers, lawyers, and DOCTORs are all.

jdwvu

That is just what the surgeon actually pockets...the total cost of surgery is much closer to the 18k

Wupp

This is not what the surgeon "pockets." After expenses, including paying his office staff salaries, rent/mortgage on his office, and other expenses, surgeons pocket less than $500 for this procedure.

KevinM

If you seek a likely source for the misperception, look no farther than that physician's bill. It bears no relation to what Medicare or an insurer will pay -- in fact it is probably off by the "order of magnitude" of which you speak.

mph

The respondents are probably thinking of the total cost of the procedure (hospital, anesthesia, etc.) rather than the surgeon's personal share.

Some Random Economist

Why would these patients know how much doctors do (or should) get paid? The patients aren't paying the doctors.

cjc

Well, this gets back to the whole "there are few true market prices in health care" because of third party payors, etc.

Tim Richardson, PT

Agreed.

Cash-pay, concierge medical services and cash-only medical tourism is beginning to grow in small healthcare niches.

Hopefully, these new "disruptive innovations" will help to set true market prices in healthcare.

And, by the way, caregivers in these niches enjoy comparable incomes to their traditional, insurance-based peers.

Tim

Charles Lohrstorfer

Please provide some empirical evidence of this rate of compensation. What is the mean compensation per year for an orth surgeon? Dare you to show that figure

Gary K.

Medicaid payment is still lower.

Mike B

The doctor isn't the expensive part of medicine. It's the team of trained professionals assisting him/her, the expensive equipment, the one-time-use medical devices, the hospital buildings, the malpractice insurance and related lawyers, the complex medical records system, the massive team of people that put together the bill and finally the people who get the treatment , but wind up being unable to pay.

Phil

People might be confusing the total cost of care with the portion that goes to the doctor.

Phil

I bet if when you asked people how much the doctor should receive ... if you also told them how many hours the doctor worked for it, their estimates would be much lower.

Mike

Phil,
In terms of the number of hours that the doctor worked for it, do you include education/training? For an orthopedic surgeon, that doctor PAID to attend 4 years of undergraduate, PAID to attend 4 years of medical school (class/studying around 60-80 hours per week), graduated with 100+K debt in loans, then got paid around 35-45,000 dollars to work 80+ hour weeks for 6 years in residency, then that doctor likely had 1-2 years of fellowship training. After 14-16 years of training, then that doctor finally was able to get compensated for this procedure.

Are you sure their estimates would be lower?

tmeier

Kind of meaningless unless you also ask them how much time the surgeon spends on the job as well. If they are off by an order of magnitude on that it would even out. Likewise if you ask them how much a surgeon should make in a year.

Even then I don't see what it has to do with value, it's like asking an Indian how many beaver skins he would give you for your magical death-stick. The answer would be a lot if he's never seen a musket before, not so many if there is an established market with cost expectations.

Thomas Brambor

I am not sure why patients should be expected to have a good sense of how much a hip replacement surgery costs. If instead the questions were about total income of surgeons / what surgeons should earn, the answers may be closer to reality. I doubt that most patients would argue that surgeons should earn 10 times the $300,000 (median) salary they are earning today.

Ken

How many study subjects would know the litany of line-item charges for a typical hip replacement well enough to single out a surgeon's reimbursement?

According to NIAMS, a traditional hip replacement surgery "lasts from 1 to 2 hours"

How many of those patients thought they were suggesting the price of the surgeon's time alone should be $9250.50 to $18,501.00 an hour?

Wupp

Traditional hip replacement surgery indeed last 1 to 2 hours. But the surgeon reimbursement includes hospital rounding and all post-op care for the next 3 months, including office visits, paperwork, nursing staff time, etc.

Lucas Reis

That's incredible! Would it be better if all prices paid in these transactions were public? Like, an annual publication or something?

Sassy

Some of those patients probably asked their surgeon what the surgery would cost and were told that they could not give a number -- then they got bills from the hospital, the surgeon, the anesthesiologist, the xray provider, the surgeon's assistant (probably not cleared with the insurance company so not covered) and a few other places. If the surgeon can't say "this is what I get paid and here are the other entities involved" how should the patient be able to figure it out?