Health Care Reform Memo: September 4, 2012
Deloitte Center for Health Solutions publication
The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.
From Paul Keckley, Executive Director, Deloitte Center for Health Solution
The driving time from Los Angeles International Airport to my meeting Thursday was 35 minutes. In that time, I learned a lot about Tony.
The limo company had suspended its health benefits program five months prior, giving its employees 90 days to make do. Tony bit the bullet: he opted for an individual policy with a $500/month premium because that’s what he could afford. He knew his co-pays for office visits increased to $50 from $30, but beyond that and the monthly premium, he knew little else about what he’d bought.
Every week, I ask drivers, hotel clerks, baristas, and business folks about their views of the health system and how they’ve prepared themselves. Invariably little is known about the “U.S. health system” per se, beyond anecdotal impressions from personal experiences. They think it complicated and expensive, and if they have insurance, they know their monthly premium, and their out-of-pocket for prescriptions and office visits. If without insurance, they assume they can get care in an emergency, and resolutely conclude they might be one injury or accident away from losing everything. Like Tony, their views are deeply personal, their vista about “the health care system” exclusively local, and their assessment of the ongoing health reform debate perplexing if not frustrating.
And not surprisingly, most know little about the Affordable Care Act (ACA).
When wage price controls were implemented post-World War II, allowances were given to employers to offer health benefits that did not count against the wage ceilings. As a result, the number of individuals covered by employer-sponsored coverage soared from 20,662,000 in 1950 to 142,334,000 in 19601. Today, 50.3 percent of the U.S. population is covered through employer-sponsored health insurance, including 68 percent of the civilian workforce and 73 percent of full-time, year-round employees2. But employer-sponsored health care remains a voluntary commitment of employers: 10 percent dropped coverage due to cost in the last decade, and 9 percent, representing 3 percent of the workforce (4.8 million), say they’re likely to drop it in the next ten years3.
Not surprisingly, every employer would like to provide coverage; cost is the issue. In industries where health insurance coverage is routine, wages have not kept pace with health costs. For the last ten years, the per hour cost of health care rose by 87 percent while hourly spending on compensation increased 33 percent4.
And the system could be construed by some to be somewhat unfair to people like Tony who pay for their insurance after taxes versus employees covered by a company plan who pay no income tax on their health benefits—the so-called “employer tax exclusion” that would produce Treasury receipts of $177 billion if taxed as income5.
Since its passage in 2010, I have read the ACA nine times making margin notes about areas of confusion. I concluded it has more good in it than bad, and plenty of both. It’s a monster to read—2,000 pages—little wonder many haven’t read it and are confused. And it spans a decade—five election cycles, with most of its hoped-for structural improvements like health exchanges, bundled payments, and provider incentive transitioning from fee-for-service (FFS) payments to results implemented after 2013.
One of my four major concerns6 has been the employer pay-or-play provision. Section 1513 of the ACA refers to it as the employer’s “shared responsibility” and requires that an employer with more than 50 employees after 2014 must provide health coverage that covers “minimum essential benefits.” A company that doesn’t provide coverage would be obligated to pay a fine of $2,000/employee, which offsets the costs of new the federal government subsidies for eligible people to purchase insurance through the health exchanges in 2014.
Setting aside the complexity of determining its applicability to seasonal workers, the idea that employers would be “forced” to purchase coverage seems a bit heavy-handed. In a competitive economy, it is reasonable for a company to make its own bets on the importance of health coverage to get and keep its workforce. But it’s more complicated: for the 60 percent of companies that provide insurance coverage today—whether self-insured or not—their costs include their employee, dependent, and retiree costs PLUS the underpayments of Medicaid and Medicare PLUS the costs for those companies that do not provide coverage. They pay hidden taxes, in effect subsidizing employers who do not provide coverage.
So the role of employer-sponsored coverage in our system is an important discussion worth having, and there are some perplexing questions that need answers: might not a company that currently provides health insurance coverage be better off dropping coverage altogether, paying the penalty, and walking away? With health exchanges coming online in 2014 offering standardized insurance plans that are affordable to individuals, including those eligible for subsidies—might not an employer consider the health exchange a safety net that’s good for the company’s bottom line and good for the health system? And if coverage is dropped, how might recruitment and retention of a workforce change, especially in industries where health coverage is a staple? Tough questions that require thoughtful consideration in the C-suite, board meetings, and on Capitol Hill.
For Tony, the announcement that his company was dropping health insurance came without warning. He chose to purchase coverage instead of taking his chances going without.
I spent another half-hour with Tony en route back to the airport. He asked for websites where he could study the issues for himself. He reiterated his desire to have coverage: he did not want to “wait at the back of the line” to see doctors, as he observed those without coverage were forced to do. And as we parted, he assured me he was going to study the ACA and judge its merit for himself.
Tony is my new pen pal. I sent websites and resources over the weekend and we will stay connected. I admire him. He’s my hero, because he chose to seek coverage on his own. He chose to invest his limited resources in a system that’s far from perfect, but no less essential than our food and water supply. And he is anxious to learn.
I learned more in my hour with Tony than he might have picked up from me. The national discussion we’re having about health reform is bigger than a political campaign or the ACA, though admittedly it’s the ignition valve for the current debate. It’s about the future of a society in which an effective health care system is intrinsically necessary, though mired in poorly designed incentives, waste and inefficiency, and competing views of the stakeholders that espouse their proprietary views about its solutions.
I am betting on Tony. Health reform is about how he navigates his personal health pathway in the coming weeks and months as he encounters the system in a fresh way.
Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions
1 “Health Insurance in the United States,” Economic History Association, February 1, 2010
2 Issue Brief: Meeting the challenge: Maximizing the value of employer-sponsored health care, Deloitte Center for Health Solutions, Deloitte Consulting LLP, and Deloitte Tax LLP, August 2012
3 2012 Deloitte Survey of U.S. Employers, Deloitte Center for Health Solutions, July 2012
4 Bureau of Labor Statistics, “Employer Costs for Employee Compensation,” multiple documents
5 Internal Revenue Service (IRS), Joint Committee on Taxation
6 My four big questions: (1) Will costs be lower? (2) Will states be able to fulfill their obligations under ACA? (3) Will the uninsured enroll? (4) Will employers pay or play?
GAO studies impact of ACA on employer-sponsored insurance
The Government Accountability Office (GAO) reviewed five studies using microsimulation models to estimate the effects of the ACA on employer-sponsored insurance (ESI) coverage through the end of the decade. The estimates ranged from a net decrease of 2.5 percent ESI enrollment to a net increase of 2.7 percent within the first two years of implementation, impacting up to 4 million. (The estimates ranged from 2 million to 6 million.)
The GAO also performed a literature review of 16 surveys of employers: 11 concluded that 10 percent or fewer employers were likely to drop coverage in the near future with a range of 2 percent to 20 percent.
Note: in the companies surveyed in the 2012 Deloitte Survey of U.S. Employers: 81 percent of companies representing 84 percent of the workforce plan to continue offering employees health coverage; 9 percent of companies representing 3 percent of the workforce anticipate dropping coverage in the next one to three years; and 10 percent of companies representing 13 percent of the workforce are not sure which action they will take. Most employers said they will increase use of co-pays, deductibles, and increased premium participation to reduce costs.
My take: notably, from 2000 to 2010, 10 percent of employers dropped coverage—so the trend among employers to drop coverage is not about the ACA; it’s about health costs. The ACA, per the 2012 Deloitte Survey of U.S. Employers, is not thought to reduce employer health costs, but most employers also admitted to not knowing much about the law.
Illegal immigrants are ineligible for HIX subsidies or PCIP program
Unlawful residents allowed to temporarily stay in the country under a recent Obama Administration executive order are ineligible for the Pre-existing Condition Insurance Plan (PCIP) program or federal subsidies through the new health insurance exchanges (HIXs), the Administration announced Tuesday in an interim final rule.
Background: last June, the White House said it would not deport some illegal immigrants who had come to the U.S. as children. Last week, the Centers for Medicare & Medicaid Services (CMS) issued an amendment to the final rule on the PCIP program, clarifying unlawful residents, including individuals exempt from immediate deportation, will not be eligible for the PCIP program or federal premium assistance made available through states’ HIXs.
Report: U.S. could reduce drug costs if reference pricing, comparative effectiveness implemented
Prescription drugs account for 10 percent of total U.S. health costs: $259 billion in 2010. Many developed countries pay lower prices for brand name drugs than the U.S. as a result of two differences per the report: (1) the use of reference pricing (the government sets a payment rate for a group of similar drugs using a benchmark based on a lower-priced option and consumers pay the difference in the benchmark and their drug) and (2) the application of comparative effectiveness and cost-effectiveness research to formulary tiering of drugs based on efficacy and effectiveness. (Source: National Institute for Health Care Reform, “Adapting Tools from Other Nations to Slow U.S. Prescription Drug Spending,” NIHCR Policy Analysis No. 10)
Background: drug spending growth increased 1.2 percent in 2010 and averaged 3.7 percent annual increases between 2006 and 2010—slower than overall health spending increases. Between 1980 and 2005, drug spending grew faster than overall spending averaging 11-13 percent from the 1980s through the mid-2000s. In 2011, 80 percent of prescriptions in the U.S. were filled by generic drugs—63 percent in 2006, accounting for 27 percent of drug costs. Per the Congressional Budget Office (CBO), the use of generic drugs resulted in $193 billion in savings in 2011, including 55 percent savings to the Medicare Part D program. Notably, nine of the top ten drugs are in classes where a generic alternative or the leading brand loses patent protection in 2012. In 2011, the typical cost-sharing amounts for private plans were $49 for a non-preferred tier drug vs. $10 for the generic tier, while Medicare Part D plans have a wider gap between tiers—$78 vs. $7.14. As of 2011, about 85 percent of prescriptions directly involved a third-party payer, such as a health plan.
The major driver of health cost increases for prescription drugs are biologic drugs—those derived from living organisms rather than chemical compounds. Many of these drugs cost more than $1,000 per dose and are sometimes referred as “personalized therapeutics” or “specialty pharma,” comprising 1 percent of prescriptions and 17 percent of drug costs. It costs 30 percent more to produce these products, and competition requires approval pathways for follow-on biologics or bio-similars, which could serve a role akin to generic drugs. Per the July report from the National Venture Capital Association, funding for biotech ventures has dropped to 2003 levels; comparing 2012 to 2011, deals decreased 6 percent and funding decreased 9 percent.
My take: reference pricing might discourage U.S. drug manufacturers from taking risks in their drug development programs and limit innovation. Comparative effectiveness that facilitates comparisons of drugs based on safety, efficacy, and effectiveness is worthwhile so long as manufacturers are allowed at the table to assist in methodological design, and costs are not factored in comparative effectiveness analysis. The focus of policymaker efforts to reduce costs might instead be: (1) use of tax credits, patent protections, and/or incentives to expand innovation in personalized medicines to lower their unit costs, (2) continued improvements in U.S. Food and Drug Administration (FDA) oversight processes, and (3) consideration of scientific data sharing across governing bodies that regulate drug safety in developed systems to expedite commercialization.
CDC, HRSA fund improvements in public health programs
Last week, the U.S. Department of Health and Human Services (HHS) announced awards of $50 million from two of its agencies:
- The Health Resources and Services Administration (HRSA) awarded $23 million to 37 Public Health Training Centers to provide trainings in basic public health skills and special topic areas, such as nutrition and epidemiology.
- The Centers for Disease Control and Prevention (CDC) provided $25 million to add 227 new fellows in the field of public health.
GAO study: Medicaid long-term care validation highly variable in states
The GAO released a report last week on the methodology used by states to obtain information about Medicaid long-term care applicants’ assets. The GAO found “information obtained by states…varies and may be insufficient.” Highlights:
- Most states require applicants to report on 13 types of assets: earned income (50 states); unearned income (49 states); annuity, burial contract and prepaid funeral, financial and investment, life estate, and trust (51 states); life insurance, promissory note or loan, and real property other than primary residence (50 states); continuing care retirement community entrance fee (46 states); vehicle (38 states); and primary residence (37 states). Note: Washington, DC is included as a state for the purposes of this report.
- Information is not collected uniformly across states.
- No state has fully implemented the asset verification system (AVS), which became a requirement on a rolling basis in 2009.
- Thirty-one states reported requiring less than 60 months of documentation from applicants and financial institutions. According to CMS, it is reasonable for states to only conduct interviews if they believe a transfer of assets has occurred.
GAO recommends “states must balance the costs of eligibility determination efforts with the need to ensure that those efforts provide sufficient information to implement federal requirements.”
(Source: GAO, “Medicaid Long-Term Care: Information Obtained by States about Applicants’ Assets Varies and May be Insufficient,” July 2012)
Study: Medicaid match cuts might expose states to higher Medicaid obligations
The conservative think tank Heritage Foundation’s microsimulation model projected that states’ obligations (2014-2022) for newly enrolled Medicaid enrollees might be between $41,934,207 and $120,234,133:
“…Medicaid expansion as a great benefit to the states, since the federal government foots a majority of the bill in the first years of implementation. However, even under the ACA, the expansion will begin putting pressure on state budgets as early as 2019. State legislators cannot afford to be myopic when assessing the costs and benefits of expanding Medicaid. Aside from problems already apparent in Medicaid, such as patient access, states must also face uncertainty in how much the expansion will actually cost. The Medicaid expansion represents a giant increase in federal spending of $642 billion, according to the Congressional Budget Office.” (Source: Drew Gonshorowski, “Issue Brief: Medicaid Expansion Will Become More Costly to States,” Heritage Foundation, August 30, 2012)
- August 30, CMS awarded funding for two new Consumer Operated and Oriented Plans (CO-OPs) in Tennessee and Massachusetts: the Community Health Alliance Mutual Insurance Company in Tennessee will receive $73.3 million and Minuteman Health, Inc. in Massachusetts will receive $88.5 million. To date, $1.6 billion has been awarded to 20 CO-OPs in 20 states under the ACA.
- On August 23, CMS and Massachusetts finalized a memorandum of understanding (MOU) for the financial alignment demonstration for those dually eligible for Medicare and Medicaid—the first MOU to be released that could include up to 2 million beneficiaries.
- Detroit, Michigan hospitals are projected to receive up to $1 million in penalties due to hospital readmissions within 30 days of discharge for heart attack, heart failure, and pneumonia patients.
- Georgia Governor Nathan Deal (R) stated last week that the state will not expand its Medicaid program to 133 percent of federal poverty level (FPL).
- In 2014, California will include insurance rate regulation on its state ballot, which will allow voters to decide whether the state insurance commissioner can reject insurers’ rate hike proposals.
- Certain Texas counties are exploring whether they can create a county-run Medicaid expansion, if the state government continues with plans not to expand Medicaid eligibility to 133 percent of FPL. The counties would be required to seek approval from HHS and the Texas legislature in order to move forward. HHS and CMS would have to issue guidance on whether states may have different eligibility levels throughout the state.
- Cole County Circuit Judge, Daniel Green, ordered Missouri Secretary of State, Robin Carnahan, to reword a ballot measure seeking voter approval on whether to move forward with establishing a HIX in the state. The Court ordered Ms. Carnahan to use less polarizing language.
- Illinois legislators voted to cut $1.6 billion from its $15 billion Medicaid budget, which will limit coverage for adult dental care. The cut will also limit vision benefits, increase co-pays for prescription drugs, and eliminate podiatric and chiropractic care. Note: per Pew Research study (2012), 830,590 emergency room visits in 2009 were for dental care—up 16 percent from 2006.
Feds notify hospitals of fraud liability for wrongly implanted heart devices
Thursday, the U.S. Department of Justice (DOJ) notified hospitals of recommended procedures to examine questionable implantable cardiac defibrillator (ICD) surgeries with instructions to estimate potential penalties under the False Claims Act. At up to $40,000 a piece, the devices are among the most expensive devices used in hospitals.
Background: for two years, the DOJ has been using data-mining technology, civil investigative demands, and meetings with experts to investigate patterns of implantation that fall outside evidence-based standards for when it’s appropriate.
The DOJ’s “Resolution Model” document says each questionable ICD case will be evaluated individually and holds hospitals accountable to self-audit the cases and estimate damages, with the severity of penalties based on whether the hospital had medical reasons to violate CMS rules; if patient harm resulted; if the hospital had prior knowledge or a statistical pattern of non-guideline implants; and if a hospital compliance program was in place.
My take: the DOJ’s approach is expected to be more widely used as efforts to reduce unnecessary care increase and fraudulent behavior is policed more aggressively. Notably, in this case, the hospital is deemed culpable for the decision to step away from evidence-based guidelines (2005 CMS National Coverage Determination rules for preventive ICD use) and pay a fine.
Merck files petition for Supreme Court to rule on pay-to-delay agreements
Last week, Merck filed a petition with the U.S. Supreme Court requesting clarification on a Third Circuit Court of Appeals ruling on patent agreements between brand name and generic manufacturers. The issue: do federal antitrust laws permit a brand name manufacturer holding a patent for a drug to enter into a settlement with a prospective generic manufacturer where the generic manufacturer receives a payment and agrees to delay entry of the generic product into the market? In July, the Third Circuit Court of Appeals opinion held that “pay-to-delay” must be viewed through the lens of antitrust law with “the patent holder bearing the burden of showing that the payment ‘was for a purpose other than delayed entry’ or ‘offers some pro-competitive benefit.’” Prior rulings from the Second, Eleventh, and Federal Circuits have found the federal antitrust laws permit such an agreement, as long as it does not exclude competition beyond the scope of the patent.
Background: in 1989 Schering-Plough Corporation—now owned by Merck—patented K-Dur20, a time release potassium tablet with exclusivity guaranteed until 2006. Schering-Plough reached agreements with two generic manufacturers, who filed plans to market generic versions of the drugs in 1997. In 2011, the Federal Trade Commission (FTC) issued an administrative complaint against the companies involved alleging that the payments from the brand manufacturer to the generic manufacturers constituted unlawful restraints of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
FDA approves HIV combination therapy, novel treatment for cancer in children
The FDA approved Stribild, a new once-a-day combination therapy pill to treat HIV-1 infection in adults who have never been treated for HIV infection.
Also last week, the FDA approved two new treatments for cancer patients: tbo-filgrastim, manufactured by Sicor Biotech UAB, and Afinitor Disperz, manufactured by Novartis. Tbo-filgrastim is a treatment recommended for adult patients taking chemotherapy drugs, which can cause a substantial decrease in the production of neutrophils in the bone marrow leading to infection and fever. Afinitor Disperz (everolimus tablets for oral suspension) is used to treat a rare brain tumor, subependymal giant cell astrocytoma (SEGA), in pediatric patients.
WellPoint seeks new CEO
Angela F. Braly stepped down as Chair and CEO of WellPoint. The Executive Vice President, General Counsel, Corporate Secretary and Chief Public Affairs Officer, John Cannon, will serve as the President and CEO of the company in the interim. The Board of Directors has formed a search committee for a permanent replacement.
“I’m prepared to look at reforms in Medicaid. I’m prepared to look at smart reforms on Medicare. But there are things I won’t do, and this is part of the debate we’re having in this election. I do not think it is a good idea to set up Medicare as a voucher system in which seniors are spending up to $6,000 more out of pocket. That was the original proposal Congressman Ryan put forward. And there is still a strong impulse I think among some Republicans for that kind of approach.
I’m not going to slash Medicaid to the point where disabled kids or seniors who are in nursing homes are basically uncared for. We’re not going to violate the basic bargain that Social Security represents…
I genuinely believe that five years from now, folks will look back and say, I’m really glad that my 23-year-old can stay on my plan for health insurance. I’m really glad that we’ve closed the doughnut hole, so prescription drugs are cheaper for me. I’m really glad that I’ve got a pre-existing condition and I can still buy affordable health care through the exchanges that have been set up in the Affordable Care Act, Obamacare.
But that is when the thing is set up that people [will] realize they still have a choice of doctors and this hasn’t been a government takeover of health care—all the uncertainty has been taken out of it. And I’ve got an election in less than three months, not five years from now.”
— President Obama, August 21, 2012 Time interview, to be published September 10, 2012
“The biggest problem in dealing with Medicare is dealing with the endgame—when people enter their final descent and are kept alive, expensively, often with no statistically significant chance of leading what most people would consider a decent or rewarding life. So we would restrict the end-of-life care that Medicare will pay for. Yes, that sounds like the nonexistent “death panels” invoked during the debate over the Affordable Care Act, a.k.a. Obamacare. But insurance companies, hugely important players in our health care system, already heavily restrict the procedures they pay for. Taxpayers, collectively, should so the same. In 2006, the last year for which data are available, more than 25 percent of all Medicare spending went for people in their last year of life, according to the federal [CMS], even though they were only 5 percent of the covered population.”
— Geoff Colvin and Allan Sloan, “Hey Washington: Enough Already,” Fortune, September 3, 2012
“Despite heroic efforts by clinicians, patients continue to suffer preventable harm, in large part because health care is grossly under-engineered: devices don’t talk to each other, treatments are not specified and ensured, and outcomes are largely assumed rather than measured....”
—John Hopkins’ Armstrong Institute Director, Peter J. Pronovost, MD, PhD, justifying Hopkins’ 10-year plan to improve patient safety and engagement, August 28, 2012. Note: last week, the Gordon and Betty Moore Foundation awarded the Johns Hopkins’ Armstrong Institute for Patient Safety and Quality an $8.9 million grant to support the University’s $500 million 10-year program designed to eliminate all preventable harms that patients experience in the hospital by using a systems engineering approach to health care with a focus on inpatient intensive care units.
“When it comes to medical care, many patients and doctors believe more is better. But an epidemic of over-treatment—too many scans, too many blood tests, too may procedures—is costing the nation’s health care system at least $210 billion a year, according the Institute of Medicine, and taking a human toll in pain, emotional suffering, severe complications and even death.”
— Tara Parker-Pope, “Overtreatment is Taking a Harmful Toll,” The New York Times, August 28, 2012
“About 7 percent of postmenopausal women will experience a hip fracture…. But recent reports suggest that too many younger women are being evaluated and treated for bone loss when they should not be….This year, the American Academy of Family Physicians cited the [dual energy X-ray absorptiometry, DXA] scans among five tests that are often performed unnecessarily and may lead to overtreatment of patients. Yet 20 percent to 60 percent of family physicians and internists have been performing DXA scans on younger women….Indeed, consumers have voted with their feet, abandoning the drugs in droves. The number of dispensed prescriptions for bisphosphonates has plummeted to an estimated 24.7 million this year from 46.8 million in 2007, according to IMS Health….Part of the problem is that once doctors develop certain practice habits, they become ingrained and are hard to change.”
— Roni Caryn Rabin, “Many Bone Tests for Some, and Too Few for Others,” The New York Times, August 28, 2012
- Value-based hospital performance: from 2006 to 2010, hospital performance on 91 percent of core measures used in CMS pay-for-reporting program improved. (Source: CMS, March 2012)
- Consumer confidence August 2012: 60.6 percent, down from 65.4 percent in July and lowest since November 2011 at 55.2 percent. (Source: The Conference Board, August 28, 2012)
- Diagnostic errors: in a review of observational studies of 5,800 autopsies, researchers found 28 percent had a missed diagnosis, such as heart attack, pulmonary embolism, artery blockage in the lungs, pneumonia, and aspergillosis; and 8 percent identified a Class I diagnostic error, which could have contributed to or directly caused the patient’s death. (Source: Bradford Winters et al, “Diagnostic errors in the intensive care unit: a systematic review of autopsy studies,” July 2012)
- Drug approvals for rare diseases: six in 2007, eight in 2008, nine in 2009, seven in 2010, 11 in 2011. (Source: FDA)
- Perceptions of fair taxation: 58 percent of Americans believe “rich people” do not pay enough in taxes vs. 26 percent who believe they pay “their fair share” and 8 percent “too much.” Households with income above $1 million pay 20 percent of total federal income taxes and make up 0.3 percent of taxpayers; households with income of $50,000 to $75,000 comprise 12 percent of households and pay 9 percent of taxes; 46 percent of households pay no federal income tax. Note: all groups pay other taxes in addition to the federal income tax (i.e., excise taxes, gasoline, et al). (Sources: Pew Research Survey, August 2012; Tax Policy Center)
- Avoidable deaths: from 1999 to 2007, amenable mortality rates (deaths that should not occur in the presence of timely and effective health care) among men in the U.S. fell by 18.5 percent, compared with 36.9 percent in the UK, 27.7 percent in France, and 24.3 percent in Germany. Rates for amenable mortality among women in the U.S. dropped 17.5 percent, compared with 31.9 percent in the UK, 23.4 percent in France, and 22.7 percent in Germany. (Source: Nolte, McKee, “In Amenable Mortality—Deaths Avoidable Through Health Care—Progress In The U.S. Lags That Of Three European Countries,” Health Affairs, August 2012)
- Physician, practice administrator compensation: median compensation for administrators of practices with 26 or more full-time physicians was $146,533 (-2.8 percent from previous year) vs. $120,486 for administrators at practices with seven to 25 physicians (+4.8 percent from previous year), and $88,117 for practices with one to six physicians (+1.9 percent from previous year). Based on the Consumer Price Index, the rate of inflation for 2011 was 3.2 percent. Among the 23 physician specialties, seven saw compensation increases at or above the inflation rate. These ranged from intensivists, whose compensation increased an average of 10.3 percent to $327,456 in 2011 from $296,768 in 2010; to gastroenterologists, whose average compensation increase equaled the 3.2 percent inflation rate, rising to $445,448 in 2011 from $431,656 in 2010. (Sources: Medical Group Management Association report “Management Compensation Survey: 2012 Report Based on 2011 Data,” Modern Healthcare Annual Physician Compensation Survey)
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