Redesigning payment of internal medicine: a financial challenge.

To the Editor: In the recent position paper of the American College of Physicians on "Reform of the Dysfunctional Healthcare Payment and Delivery System," various recommendations were made to improve compensation of cognitive versus procedural medicine. (1) Current financial compensation for generalists is a main factor in the decline of new residents entering the field of internal and family medicine. (2-4)

We believe that payments to primary care physicians (PCPs) do not need to be increased to improve their financial status; rather the overhead cost and time cost in obtaining these payments ought to be decreased. Actually, data from the Medicare Payment Advisory Commission and the Centers for Medicare & Medicaid Services suggest that from 1991 to 2002, Medicare payment rates for services provided by internists and family practitioners increased by 17% and 45%, respectively, relative to payment rates for all physicians.4 But this change has not necessarily translated into higher incomes for PCPs. Obtaining payment from Medicare, and consequently other payers, requires diagnosis coding, dictation and transcription, compliance courses, experienced submission officers, collection and distribution, and accounting departments. The cost incurred in this process for cognitive services tremendously raises overhead and weakens the value of any increments in Medicare payment. According to the 2004 Medical Group Management Association (MGMA) Cost Survey, employee ratios per physician in most practices is 2.5 to 4.4 full-time staff members per physician. According to MGMAs 2002 Cost Survey, average operating overhead for internal medicine practices is 57.59%. Moreover, the survey indicates over 46% of the surveyed practices' charge volume is for Medicare and Medicaid. (5)

We suggest that PCPs should be exempted from these rules and be paid a fixed fee for outpatient visits, regardless of level of visit. These changes would remarkably decrease the overhead cost in terms of money and time. At the time of their visit, patients would present coupons or vouchers issued by their insurer. The PCP would cash these vouchers from insurers or even local banks with no further documentation required. Such a procedure would have a tremendous impact on small and solo general practices. The savings in physicians' time in terms of documentation, dictation, coding, and compliance could improve job satisfaction and encourage generalism. It is well known in private practice that the variability in level of billing for the same services depends on the way physicians document and handle problems, and different educational courses are available to "improve billing." Students and residents are too smart to respond to our efforts to rekindle an interest in generalist careers until they see satisfaction in the eyes of currently practicing generalists.

Ishak A. Mansi, MD, FACP 

Daniel Banks, MD, MS, FACP

Department of Medicine

Louisiana State University Health Science Center

School of Medicine in Shreveport

Shreveport, LA

References

1. Reform of dysfunctional healthcare payment and delivery system. American College of Physicians: a position paper. Available at: www.acponline.org/college/pressroom/as06/dysfunctional_payment.pdf. Accessed April 19, 2006.

2. Larson EB. Roberts KB, Grumbach K. Primary care, generalism, public good: deja vu? Again! Ann Intern Med 2005;142:671-674.

3. Sox HC. The future of primary care. Ann Intern Med 2003;138:230-232.

4. Ginsburg PB. Payment and the future of primary care. Ann Intern Med 2003;138:233-234.

5. Still R. Internal Medicine: average overhead expenses. Available at: http://www.medicalmanagement.com/aac/aac0306019-2.htm. Accessed April 19, 2006.