On Disparities Between Reimbursement of Primary Care and Proceduralist Physicians

A recent post inspired some discussion about physicians’ reimbursement in the US. Last month, an article in the Annals of Internal Medicine offered a clear explanation about how the disparity in reimbursement between primary care (and other “cognitive”) physicians and procedural specialists came to be, and why it is important. [Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306.]

Its main points were:

  • The widening income gap between primary care and other physicians correlates with declining interest in primary care.
  • Medicare’s Resource-Based Relative Value Scale (RBRVS) system was advertised as a way to make reimbursement more equitable, and particularly fairer for primary-care, but it has had the opposite effect, for three main reasons
  • Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
  • The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. “specialty society influence in proposing RVU [relative value unit] increases,” 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership,” and 3. “the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs.”
  • Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
  • Private insurers and managed care organizations tend to follow Medicare’s lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The authors concluded that “primary care practice is not viable without a substantial increase in resources available to primary care physicians.” Yet primary care is an extremely important, albeit neglected part of the health care system. Most patients value “having a primary care physician who knew their medical problems.” Furthermore, “patients with a regular generalist physician have lower overall costs than those without a generalist physician.”

This article presents the clearest summary I have seen to date of what has gone wrong with the reimbursement of primary care and cognitive physicians in the US. (Although we have discussed Medicare’s generally wooden-headed reimbursement system before, here. See also the Health Affairs article cited in that post for a more general discussion of why the system is wooden-headed.)

What is disturbing, although no reflection on the article’s authors, is how long it has taken for someone to write about this problem. The RBRVS system has been going wrong since 1992. Managed care, which was supposed to come up with creative ways to control costs and improve quality, seems to have seen fit to simply ape Medicare’s wooden-headed reimbursement for at least a decade. Meanwhile, primary care is slowly being throttled.

Of course, one reason it has taken so long to talk about it is doing so may threaten vested financial interests and settled ideological convictions. The justification for the first part of the assertion is obvious. Furthermore, the article is an indictment of government-run single payer health insurance, which may offend many on the left. After all, Medicare is such a single-payer system. The article also is an indictment of using the “competitive market-place” to control health care costs, which may offend many on the right. After all, managed care is supposed to be such a market-based solution.

Thus, let’s see how many choose to continue to ignore the issues raided by Bodenheimer et al.

Instead, we should consider…


1. If you are a primary care or cognitive physician, realize why your financial position is becoming untenable and stop feeling guilty about protesting an unfair system.

2. If you are a procedural specialist, realize that you are in the same boat as the primary care and cognitive physicians. If our part of the boat sinks, yours will not long stay afloat.

3. If you are a health care researcher, think about addressing this elephant in the living room which many of you have so long ignored.

4. All others, tell your political representatives that fair physician reimbursement and a viable primary care system are both worth having.