When it comes to billing, all medical degrees are not created equal. A recent survey from Dallas-based healthcare staffing firm AMN Healthcare found that physicians bill between $11.7 million and $1.3 million annually, with some non-physicians billing more than their doctor colleagues. The report estimates that physicians originate 80 percent of all healthcare dollars spent in the system.
As healthcare costs rise, numerous forces are at work to curb prices, but shifts toward value-based care, bundled prices, and transparency haven’t stopped unsustainable increases in healthcare prices over the past decades. The Centers for Medicare and Medicaid Services found that spending on healthcare reached $4.3 trillion in 2021, representing 18.3 percent of the economy and $12,914 per person. AMN’s report, which looked at 95 percent of commercial claims submitted by physicians in 18 physician specialties in 2021, found that physicians bill commercial health insurance $3.8 million annually. The average hides the wide range of billing totals for each specialty.
According to the report, which measures billing totals for 18 specialties, nurse practitioners, and certified registered nurse anesthetists, general surgeons top the list with $11.7 million billed to commercial insurance each year. Pediatricians were the lowest, billing $1.3 million each year. CRNAs out-billed pediatricians and average $1.7 million each year.
The report did not have specific totals for specialists who perform the most expensive and complex operations, such as neurosurgery or cardiothoracic surgery, who likely would have had higher totals if given their category. The report found that orthopedic surgeons ($9.8 million), critical care physicians ($6.7 million), urologists ($5.8 million), and gastroenterologists ($5.5 million) joined general surgeons at the top of the list.
Generally, specialist physicians billed significantly more than primary care physicians. Family practice physicians bill commercial insurance $1.34 million yearly, and internal medicine physicians bill $2.6 million. Dermatologists ($1.5 million) and radiologists ($2.0 million) were other physicians who willed on the low end. According to the report, specialist physicians bill an average of $4.6 million per year, and primary care physicians bill $1.8 million on average.
The disparity in billing and incentives have pushed healthcare reformers to push for changes in how primary care physicians are paid, with many moving into a direct primary care model where they are paid per patient, per month in a subscription model rather than traditional fee-for-service. Other primary care providers are moving into the value-based care space. Doctors are incentivized to keep patients healthy efficiently rather than do more procedures and rack up codes for which to bill.
Specialists and surgeons who do more procedures have been slower to adopt these payment structures, but misplaced incentives mean prices continue to increase. Many operations and testing aren’t necessary. In a National Center of Biotechnology Information study, physicians said that about 20 percent of medical care was unnecessary, including 22 percent of medications, 25 percent of tests, and 11 percent of procedures.
Musculoskeletal surgeries are some of the most costly and unnecessary surgeries. Research from major employers published in the Harvard Business Review found that more than 50 percent of back surgeries were unnecessary. The prices for these surgeries also vary widely. A look at ACL replacement surgery in North Texas found a range between $14,000 and $54,000 for the same surgery, depending on which provider operated. Such a wide range provides ample opportunity for increasing billing totals to commercial insurance.
Notably, physicians often do not collect anywhere near what they bill. The AMN report didn’t have exact billing vs. collected ratios but assumed a 50 percent collection rate of what is billed. Still, physicians are significant funding drivers for healthcare companies. While only 20 percent of healthcare dollars end up going to physicians, the tests, prescriptions, and imaging physicians prescribe fund many other positions in healthcare, including around 80 percent of all healthcare dollars, according to the survey.
AMN’s report doesn’t include payments to government payors like Medicare, which for many physicians consists of a large portion of their patients. Physicians continue to be a significant driver of economic activity for the U.S. economy.
“Though payment models in healthcare are evolving, much of healthcare economics still is driven by the type and volume of services physicians and advanced practice professionals provide,” said Linda Murphy, president of AMN Healthcare’s revenue cycle solutions division. “They are key catalysts of both care and revenue.”
Still, the pressures of billing and the shortage of providers have made burnout a common symptom of being a physician. With an existing lack of providers exacerbated by increasing documentation and regulatory responsibilities and costs continually rising, medicine as we know it may be in for significant changes.
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