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.  


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?

clunkclunk

I think the disconnect is a direct response to the disconnect between what a hospital bills for, and what an insurance company actually pays out.

I had an emergency appendectomy back in October 2011. Looking at my health insurance statement, the hospital billed $78K for the combined shenanigans (urgent care visit, which turned in to an ER visit, then CT scans, then surgery, and 3 days recovery in the hospital). My insurance company negotiated and actually paid out just under $25K for the entire thing.

There's a three times difference from the billed amount to the paid amount. That kind of meaningless inflation of numbers from the "dance" that hospitals and insurance companies play is I think where Americans get the discrepancy between actual pay and imagined pay for the surgeon (or other healthcare provider).

M. O. Theback

Just so that people who haven't read the paper know, the questions do ask specifically how much should the surgeon be paid? Here are the questions from the paper:
1. What do you think is a reasonable fee that an orthopedic surgeon should receive to perform a THA?
2. How much do you estimate that Medicare actually
pays an orthopedic surgeon for performing a THA
and 90 days of care after surgery?
3. What do you think is a reasonable fee that an orthopedic surgeon should receive to perform a TKA?
4. How much do you estimate that Medicare actually
pays an orthopedic surgeon for performing a TKA
and 90 days of care after surgery?
The questions are followed by this note: "The following statement was written after
each of the 8 proceeding questions to ensure that patients
understood that their answers should only include the
surgeon's fees and not the total fee for the operation:
“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.”

What is interesting to me is the range of figures given by respondents from $1,000 - $60,000! According to the study, higher education levels corresponded to higher figures. Why is this? Is it because highly educated people overestimate their own self-worth which is reflected on their perceived worth of a doctor's services?

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Jen

I dunno, that explanation is about as clear as mud. It's not like people taking these surveys are as concerned about accuracy as are the people giving them. Especially when they're being asked "what do you think" which to a lot of people means "just say anything."

Chris

When I took my son to the ER because he got a nasty cut above the eye. The procedure was to clean the wound and put super glue on it. The total billed to our insurance for a dab of glue and some gauze was ~$1800. Seeing these bills is why patients are confused about healthcare spending.

I wouldn't allow a mechanic to work on my car if he just billed me $1800 every time I went in. I would insist on an itemized bill, parts and labor. We don't see that for health care; it is a complete blacked out system.

Colin Wright

When my son had a broken arm (an injury treatable since at least the time of the ancient Egyptians) the doctor spent about twenty minutes setting the break. This and the followup required the use of an x-ray machine (a technology dating back to the nineteenth century).

The total bill was $4500 -- half of which represented the physicians direct charges. I think doctors are overpaid.

Rob

@Colin Wright: If you think the doctor who fixed your son's arm was overpaid, perhaps next time you should fix the problem yourself.

Paul M

An interesting symmetry here: since I pay my prescription costs out of pocket frequently, whenever a doc writes a script I ask about the potential cost and less-costly options.

In virtually every instance, the docs have absolutely no idea what the drugs they are prescribing actually cost their patients (customer).

The idea of market forces fixing the health care system in the US seems laughable when no one seems to be in possession of anything resembling relevant information.

cjc

@PaulM

That's the thing: we've arranged our health care system so that no one involved with health care choices actually see the prices (and get the necessary information to make choices based on prices). People pay for at least part of their health care through reduced wages. The prices listed by insurance companies and hospitals are vastly different and inconsistent (and are negotiated on an ongoing basis, with Insurance Provider A getting these deals on those procedures, whereas Insurer B gets something else entirely). And the people at the decision point, the doctors and the patients, see very little of this.

tmeier

One thing that bothers me about health care is unlike most other goods and services when it is ineffective you don't get a refund. Likewise when mistakes are made your only recourse is a full out lawsuit. My wife went in to have a minor surgery, she had a bruise on her face which had formed a cyst. The plastic surgeon prescribed a cocktail of antibiotics one of which she had an allergic reaction to (we still don't know which). We went to the emergency room where they gave her a standard mix of drugs to control the allergic reaction. Six trips to the ER followed at each we were assured it was a continuing reaction to the initial antibiotic. Turns out it was one of the drugs they were giving her in the anti-allergic reaction cocktail. The doctors did not figure this out BTW, my mother-in-law and I did. So now we have maybe $20,000 of completely unnecessary ER bills. If this were any product but health care, if it were a garage incompetently repairing your car do you think you would have to pay?

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Steve conway

I had knee surgery lately ( not ortho, but opened up) and was shocked to learn the insurance paid the surgeon Only $500 and the anesteologists $1,500. However, a recent trip to the er billed at $4,500 and I would have put the value of that service at about $300 based on what they did. Overall, the ortho surgeon did the most extensive procedure, but was compensated the least.

Susan

Apples and oranges....in the er you are paying for the facility, all the staff and technological equipment...which is why people shouldn't use er's unless it is a true emergency. I would guess for the knee surgery, the surgeon probably didn't enter the picture until anesthesia had you ready....he was undoubtedly involved for minutes, not hours...... Surgeons can do a dozen simple procedures a day...and there would be facility charges on top of that.

James

"...which is why people shouldn’t use er’s unless it is a true emergency."

Err... Why not? I mean in principle. They have staff and equipment ready for true emergencies, which don't happen all that often, or predictably, so much of the time they're just sitting around waiting. Wouldn't it make sense - economically and otherwise - to make use of them for non-serious but unplanned incidents, so long as they're triaged to give priority to true emergencies?

Seems that the real problem again is economic, in that the non-serious-emergency visits are charged the same as true emergencies.

Susan

Most patients have no idea of how the health care system works. They believe physicians are employed by the hospital...and Medicare patients think nothing of costs...we have patients dropped at the hospital because the caretaker is leaving for vacation. Ask who thinks surgeons are underpaid.....I'd bet very, very few.

Zeno

It is also interesting to note that patients believe a hip replacement is more expensive than a knee job, whereas in reality, knee ops are more expensive.

Jeff L.

Doing a bit of math... the amount doesn't seem like all that much, does it?

Per one source, hip replacement surgery averages 2-4 hours. Being on the generous side, I'll go with the four hours. Add another hour for post-op visit with the doctor for 90 days out (per the study). (That seems generous to me, given that a typical post-op visit by the surgeon is at most 15 minutes, though that's a complete guess.) So we have a total of five hours expended by the surgeon.

$1378 divided by five hours is... $275 / hour, which is about $550,000 a year. Seems like enough money to me.

I'm thinking there are at least two factors contributing to the overestimation:
* people aren't so great at breaking down the math
* people don't understand that there are many, many other costs associated (drugs, nurses, people involved in the operation like the anesthesiologist, hospital room and administration costs, expensive equipment, malpractice insurance, insurance company cost overhead).

I figure the implication of the study is that surgeons should be paid more. Is half a mill a year not enough?

But hey, the people say surgeons should make $18,501 per hip replacement surgery. For a five-hour job, that amounts to over $7 million per year, and even if we double that to 10 hours of involvement on average (unlikely), we're talking $3,500,000 per year.

Everyone's greedy in the medical biz, not just the "evil drug and insurance companies," and it includes surgeons too.

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Fred

The sales commission on one hip part is more than what the doc makes.

Mary

Let's throw in there what surgeons get paid by the companies who make the artificial hips when they are paid by these same companies to speak at conferences, as consultants for artificial hip design (or anything else along those lines), etc. let's present the real picture here.

HappyTim

Does this mean if an uninsured patient walked into a doctor's office and needed a total knee replacement with $1,500 cash in their pocket, the doctor could perform the procedure with more net profit?

D. Johnson

Yup. If the patient had an implant with him and didn't mind getting the surgery performed in the parking lot without anesthesia. Also, he'd need to agree to recover at home without the benefit of any post-op monitoring or care.