Doctors Under The Knife

They converged on Washington 1,000 strong last week-pediatricians from Chicago, anesthesiologists from Los Angeles, internists from Utah. They came representing every state in the union and every branch of the medical profession, hoping for the chance to make their voices heard. There were no angry confrontations-the docs even gave Vice President Al Gore a standing ovation when he promised to get government off their backs in exchange for help in controlling costs. But beneath all the cordiality was deep foreboding about what Bill Clinton's health-reform plan, now just one month away, will hold for them-and whether they will bear the brunt of radical change. "This is a black-hat/white-hat issue," lamented American Medical Association vice president Dr. James Todd. "There's a mentality that you have to take a pound of flesh out of the medical profession."

The American health-care system is on the operating table, and doctors are under the knife. Even though their fees make up only about 20 percent of the nation's $912 billion health-care tab, critics hold physicians largely responsible for runaway costs. "They are the quarterbacks of the healthcare system," says Dr. Sidney Wolfe, of Ralph Nader's Health Research Group, and the system has run amok. The public's own view is schizophrenic: a NEWSWEEK Poll found that 94 percent of Americans think their own doctor does a good job, and 53 percent said they would pay more to keep seeing the same one. But 81 percent think that doctors in general charge too much and more than half said physicians should bear at least some blame for the nation's health-care crisis. Says consumer advocate Ron Pollack of Families USA: "I don't think the American public can have a great deal of sympathy for incomes that are six times what the average worker receives, and rising at rates far in excess of what other workers are receiving."

Doctors are the first to agree that the U.S. health-care system is an appalling mess--but they insist that they are not the problem. "To blame physicians is like blaming the police for crime," says Tim Norback, executive director of the Connecticut State Medical Society. Instead, doctors say the cost explosion lies more in the rampant spread of AIDS and other diseases, in advancing technology and in a population that is older sicker, more violent, more litigious and evermore demanding of medical miracles. And many doctors fear that the coming reforms will make matters worse-that they will be forced to see more patients, spend less time with each and be shoved into large, impersonal collectives where bean counters, not physicians, make medical decisions.

Sitting in for Hillary Rodham Clinton, who was at her ailing father's bedside in Little Rock, Gore tried to allay those fears last week. He assured doctors that Clinton's reform plan will "re-create the system that allows you to practice medicine the way you thought you would"-free of paperwork and bureaucracy. One top administration official close to the health-reform task force told NEWSWEEK that Gore was sending an important signal: when the plan is unveiled in May, doctors may be pleasantly surprised. Physicians, not insurance companies, will call most of the shots in the proposed "managed competition" system. Patients will be free to choose their own doctors and doctors will be free to choose what networks they join. HMOs won't be the only surviving model; doctors who want to practice "fee for service" medicine can still do so, and they'll be encouraged to form their own competing groups. "There will be a range of ways of delivering care, but budgetary mechanisms for all of them. There will not be an open checkbook," this official said. As for price controls, "we're playing with a Chinese menu of variables. None are pleasant." Still, the official stressed that doctors are not on Clinton's enemies list and never were: "We need doctors to make the new system work."

Physicians aren't mollified yet. "One day we hear there's going to be a tax cap, the next day we hear managed competition, another day different concepts come forth," says AMA board chairman Dr. Raymond Scalettar. "Until the administration puts forth its specific plans, we are dealing with leaks." That uncertainty is a big reason for the high anxiety seizing the medical community; so is the fact that lawyers, not doctors, seem to be calling the shots in the reform process. And despite Gore's assurances, many physicians think that bureaucracy and paperwork are bound to increase under a complex managed-competition system overseen by the same folks who brought us Medicare and the Postal Service. "It's inevitable. It's preordained," says Dr. Peter Sailon, a New York City obstetrician. "This is why physicians are so frustrated."

In fact, doctors have a very long list of frustrations these days. Insurance companies and "utilization-review clerks" second-guess their decisions. Lawyers bedevil them with malpractice suits, forcing them to second-guess themselves. Patients come in armed with consumer reports and prescription-drug ads, demanding inappropriate treatments, all the while expecting doctors to have the bedside manner of Marcus Welby and have an MRI up and running in the next room. "The walls are closing in," says Bob Blendon, professor of health policy at Harvard School of Public Health. It's little wonder many polls find that if they had it to do all over again, about 40 percent of American doctors would not enter the profession today; most cite outside interference as the major reason.

The gibes about their incomes are especially irritating. "People think doctors tool around in their Jags and put the kids in private schools, but we work our butts off. Nobody's out there filing their nails and getting a suntan," says Dr. Karen Adams, an ob/gyn who began practicing in an Oregon clinic last year. The average income for physicians was $170,600 in 1991-and though that hides a great disparity in income based on specialty (chart, page 32), it is hardly excessive, considering that most doctors work 60 hours a week or more, live tethered to beepers and graduate from medical school with debts as big as home mortgages.

Those who have tried to practice altruistic medicine have been especially burned by the skewed pay scales. When Dr. Michael Myers Jr. graduated from Harvard Medical School in 1985, he was already $100,000 in debt, and he took out more loans to set up a practice in Boston's innercity African-American community. After hassling with insurance companies, paying his rent, his office staff and his own insurance costs, Myers netted only about $18,000 a year. He was also stunned by what he calls "this ding-dong system of reimbursement" that would pay him only $12 for an office visit but $25 if he ordered a blood test. "If you take out a cataract or stick a tube up somebody's rectum, you're on your way to Jamaica. The insurance companies didn't care about the care I gave." After three years he reluctantly closed his practice and took a job at an HMO.

Primary-care physicians, who include internists, pediatricians and family practitioners, deeply resent the fact that their salaries are so much lower than those of specialists-despite greater demands on their time and range of knowledge. The pay differentials are one reason the nation has an oversupply of specialists and a shortage of generalists--so much so that if the 37 million uninsured Americans were suddenly brought into the health-care system, experts say there would be no way to provide them with basic medical care. Rural physicians are particularly frustrated. "Here I am out in Pilot Rock, Oregon, and I'm just like Rodney Dangerfield. I don't get any respect," says Dr. Richard Koch, a general practitioner who single handedly serves a town of 1,635. " I'd like to see these [specialists] come out here, deliver babies half the night, then do surgery the other half, and then go into the office and see 80 people and still stay sharp and take care of whatever comes the next day," he says.

Though no one has officially tracked their numbers, many senior, seasoned physicians are retiring early rather than put up with the travails of modern medicine. For Dr. Nicholas Catanuto, a veteran family practitioner in Derby, Conn., the final straw came two years ago when he admitted a patient to a hospital at 6:30 a.m. and got a call at 8:30 a.m. from the insurance company: "They wanted to know when he was going home. Not even what the diagnosis was. The man had a heart attack!" Not long after that, Catanuto closed his practice of 27 years. "You never used to hear of a physician retiring unless he was ill or disabled," says the AMA's Scalettar. "This wasn't work. This was a calling. Now it has changed."

Most doctors don't have the luxury of retiring early. And while some still doggedly cling to solo practices in fee-for-service medicine, many others are joining the brave new world of HMOs and other forms of managed care (page 34). For some, it's a matter of sheer survival. Dr. Vincent Parry, a family practitioner in Hauppauge, N.Y., says that if not for the HMOs and other plans he has signed on with in recent years, he'd be left with only 20 percent of his patients. "In order to maintain a practice, you have to join a plan," he says. Even so, Parry has seen his income drop by half in the last four years.

As a rule, younger doctors are far less resistant to the managed-care future. "We have a lot of years of practice ahead. We have to make the system work for us," says Dr. Eileen McGrath, 35. She and her fiance, Dr. Mark Needham, 37 (featured on NEWSWEEK'S cover), set up a family-practice group with three other doctors in Santa Monica, Calif, in 1985. The group now includes 11 doctors, all in their 30s, with a patient base that is 15 percent fee for service, 40 percent HMO, 20 percent PPO and 10 percent Medicare. A heavy load of managed-care patients can mean less income. Salaries for the group, though a comfortable $90,000 to $150,000, are down 10 percent from last year. But they are already anticipating the dawn of managed competition: they're hoping to merge with another family-practice group and contract directly with employers, eliminating insurance intermediaries.

The coming of managed care has provoked bitter battles among doctors. In highly competitive markets like southern California, "we're seeing HMOs gobble up the private sector," says Dr. Ronald Bronow, 58, a Beverly Hills dermatologist who is president of Physicians Who Care, a national coalition fighting to preserve fee-for-service care. "If corporatization is the future of medical care in America, let me out." Managed-care proponents counter that Bronow's group is deliberately fueling public fears about HMO care, and some question its motives. ("The joke is, Physicians Who Care means Physicians Who Care About Their Salaries," says one L.A. doctor who does part HMO work and part fee for service.)

The shift to a managed-care model can be unsettling for physicians and patients alike. But once they adjust, many doctors seem to like it. "People are beginning to realize that we do give quality care and that we still have control over our lives and our medical practices," gays Dr. Stephen Deutsch, medical director of the Beverly Hills Medical Group, which contracts with several different HMOs. Many doctors like managed care's emphasis on prevention' not just curing sickness, and they find that taking salaried positions in group settings frees them to do more medicine and less paper shuffling. Group practices also appeal to doctors who want more regular hours and a saner life than the solo practitioners lead. "Women with children can't run out at 3 a.m.," says Dr. Laurie Jacobs, a 34-year old geriatrician at New York's Montefiore Medical Center. Being part of a 20-doctor group practice gives her a more regular schedule and reduced on-call hours-a far different life than she remembers from her youth, when the phone rang at all hours for her psychiatrist father.

Even doctors who have embraced managed care say the plans can mean the end of longstanding doctor-patient relationships, As employers have pushed workers into HMOs and PPOs, many have found that their old family doctor is not on the approved list of providers they can see. The AMA's Scalettar, an internist in a small group practice in Washington, has lost numerous longtime patients when their coverage changed. "This is really terrible for the patient-you establish rapport, know the family, know the problems and suddenly they are gone and have to start all over." Despite the administration's assurances, much more of that seems inevitable under managed competition, which purports to save money precisely by letting large purchasing groups constantly shop for the best deals.

A single-payer health-care system like Canada's would avoid that disruption. That's one key reason growing numbers of physicians now favor that kind of reform, says Dr. Cecile Rose of Physicians for a National Health Program, which recently released a study showing that 49 percent of Vermont doctors endorse the Canadian model, and only 10.7 percent like managed competition. In Canada, patients choose any doctor they want, physicians operate independently and the government pays all health bills through tax revenues. Costs are controlled through a global budget and allocated to each province, which in turn negotiates fees to physicians. A bill proposing such a system in the United States has been introduced in Congress, with 60 cosponsors. But Clinton health advisers have reportedly rejected that idea as unworkable.

Exactly how a Clinton "global budget" might work remains uncertain, which also makes doctors jittery. The AMA says it could accept "expenditure targets" as overall goals to control health-care spending, but not if they are coupled with sanctions for states or individual doctors exceeding them. Strict price controls are also anathema, and doctors shudder at the notion that Clinton may extend Medicare's meager reimbursement schedule across the board. "If each patient paid me on the Medicare rates, I couldn't meet my overhead," says Sailon of New York.

The AMA has its own prescription for health reform: universal access for all Americans, preferably through employer-mandated insurance, a basic benefit package and malpractice reforms. Doctors say that limiting malpractice awards alone would go a long way toward controlling costs and curbing the practice of defensive medicine, which adds an estimated $5 billion to $6 billion to the nation's annual health tab. Cutting out unnecessary care could also cut costs significantly, provided doctors can agree on what "unnecessary" is. To that end, many physicians have embraced efforts to track which medical procedures work best and which don't. But to bring about real savings, patients will have to be weaned away from the idea that good care means more care and that they don't need a CT scan for their recurrent headaches.

Doctors will have to be re-educated too. For too many years, they have had the luxury of doing everything possible for their patients with no thought to the cost. Even now, some physicians resist the idea that they should consider what's best for society, not just for individual patients, when they make treatment decisions-some say they'd rather quit than take that burden on. But the culture of medicine is changing. Costs count, and will increasingly. If doctors don't share the responsibility for controlling them, they can't complain about what the bean counters do. ..MR.-

What is your biggest concern about health care?

    50% cost 

    37% Quality 

    11% Availability

How much blame should doctors bear for today's health-care crisis?

    60% most, or some

    35% Other groups mostly at fault

If Clinton's health-reform plan made it more expensive to see your private doctors and less expensive to join an HMO, would you:

    53% Pay more to keep seeing private doctors

    41% Join the HMO

Should health care be funded mostly by:

    44% The federal government

    49% Employers and private citizens using private insurance

Would you support legislation to control healthcare costs even if it meant restricting people's options of doctors and medical services?

    48% Support 

    46% Oppose

Would you favor or oppose additional taxes to pay for reforming and expanding health care in the U.S.?

    50% Favor 

    47% Oppose

For this NEWSWEEK Poll, The Gallup Organization interviewed 755 adults by telephone March 25-26. Margin of error is +/- 4 percentage points. "Don't know" and other responses not shown, The NEWSWEEK Poll copyright 1993 by NEWSWEEK, Inc.

How would you rate the general medical treatment you get?

                      EXCELLENT  GOOD  FAIR TO POOR

Family doctor            39%      49%       12%

Different doctors        21%      56%       19%

HMO                      27%      53%       19%

Local hospital           40%      34%       26%

Are there enough general practitioners?

    55% Not enough

    53% The right number

Are doctors in general: (percent saying agree)

    83% Doing a good job

    51% Taking a personal interest in patients

    81% Charging too much

    46% Making people wait too long for appointments

    83% Well trained

Is your own doctor: (percent saying agree)

    94% Doing a good job

    77% Taking a personal interest in you

    43% Charging too much

    22% Making you wait too long for an appointment

    95% Well trained

For your general medical needs do you use:

    66% A family doctor

    9% Different doctors people recommend

    14% HMO

    7% Local hospital

How long have you used your present form of medical care?

    25% Less than 5 years 

    58% 10 or more years

NEWSWEEK Poll, March 25-26, 1993 ..MR0-


think cost is the main problem facing health care today; 24% believe the main problem is access to care;

think the threat of malpractice suits causes them to do tests they otherwise might consider unnecessary; 69% think there will be substantial restrictions on fees for physicians' services; 30% believe Medicaid will be expanded to cover everyone below the Poverty level; 24% think there will be government-financed national health insurance;

think that every effective means of controlling health-care costs would be reforming the medical-liability system, while 45% think spending more on preventive health measures would help control costs.




General/Family Practice,        $111,500

Pediatrics                      $119,300

Psychiatry                      $127,600

Surgery                         $233,800

Anesthesiology                  $221,100

Obstetrics/Gynecology           $221,800

Radiology                       $229,800