Primary-Care Physicians Earn Only 20 Percent of What They Charge

If $180,000.00 is 20% of the total reimbursement, then a PCP brings in $900,000.00 a year. Therein lays the misconception that doctors are overpaid, but remember: the doctor does not pocket that total. At a patient load of 7,200 patients that is $125.00 for a 15 minute appointment. This is great pay. But remember also that 80% of that total goes to pay the staff salaries and benefits, rent, utilities, as well as such government mandated programs like Electronic Medical Records and all other costs needed to keep a business running. (The InsureBlog)

Comments (16)

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  1. Dale says:

    “The argument against doing this for medicine is that health care is a “right;” that doctors will make their prices so high that the paying public could not afford care.”

    Simple economics proves this would never happen, because patients would never show up. Prices would have to fall to meet a patients willingness to pay. And if in this model physicians earn more than “$25 per patient,” more power to them.

    • Buddy says:

      When you read that in reality that’s all a doc makes per patient, it makes you wonder why everything else is so much more expensive. I’d rather just meet the doc in the alleyway and give him my co-pay in cash for him to examine me.

      • Jay says:

        That sounds illegal in all sorts of ways.

        • manley says:

          I don’t see why it would be illegal, it’s simply a consumer and provider agreeing to a transaction that will benefit both of them. Simple economics here once we begin to think of medical care as any other service. The problem is that we have been trained not to think in that manner.

          For example, some liberals get upset that doctors “make so much” and feel the need to vilify doctors, but this article highlights the truth of their compensation. Even if they did earn more, what would be the harm in that? They are providing a service that people demand and there are relatively few who can provide such a service.

          Maybe we could attract more qualified people to medicine if we implemented more free-market solutions that enabled doctors to keep more of the fruits of their labor.

  2. Matthew says:

    And people wonder why there is a shortage of primary care physicians. There is no incentive when the money is in specializing.

    • Bill B. says:

      When health coverage is so costly, and physicians earn a very small percentage of that, where else is it going?

      • Thomas says:

        Like it says in the blog, a lot goes to paying bills for the clinic building, staff and utilities. But it does seem like a portion falls into some health care black hole, never to be seen again.

  3. James M. says:

    Extra costs that take away from what the physician earns will also be seen as the deadline for EMRs come closer. The implementation of those incurs another cost.

  4. Perry says:

    It’s nice to put out there the reality of what doctors make. I think most are more than happy to make a decent reimbursement but not have all the hassles of EMR, gov’t and insurance interference, etc, etc.

  5. Jardinero1 says:

    A small primary care practice of one or two doctors requires one or two staffers just to handle insurance re-imbursements. Re-imbursements take about sixty days to collect. This is a significant part of the overhead. Doctors must charge more because of the extra staff, space and time required.

    Doctors who are non-participating with any insurance provider do away with that overhead and can usually have a Medical Assistant handle payment in cash at the front counter. This means that non-participating doctors can see fewer patients, charge lower fees while making as much money as a participating, three, five, ten doctor practice next door. I know this anecdotally, because this is what my doctor does.

    • Walter Q. says:

      Hopefully soon we will see a shift to cash payment physicians so we can actually have a check up with our doctor instead of seeing them for 2 minutes at the end of a visit. Not worrying about insurance reimbursements must take a huge burden off of the clinic.

      • John R. Graham says:

        Thank you. I wish there were more physicians who practiced like this. However, the pain is clearly not enough for most of them to quit the insurance-government complex. I wonder why?

  6. Big truck joe says:

    And not to mention malpractice insurance. That cost driver seems to be to easily forgotten in our national health are debate. How much cheaper would healthcare be if doctors were t afraid of being used for every action or inaction they make in a patients care.

    • Bill B. says:

      I read a study somewhere where it said 80% of doctors at some point in their career will be hit with malpractice at some point. This fear also takes up a lot of time and money for physicians.

  7. Floccina says:

    When I was a child the MD was the only one in the office. My father would pay with cash and the MD carried a big role of many for making change.

    • John R. Graham says:

      Thank you. I regret that I do not have the reference at hand, but I wrote an article a few years ago that examined how doctors were paid.

      As recently as 1960 or so, physicians’ incomes from medical practice were 80 percent direct pay and 20 percent third-party payer.

      I would guess that there was variance within specialties. That is, the highly specialized surgeons would have been paid out of patients’ hospital insurance (but I may be wrong. Any clarification from readers is welcome.)

      Primary-car doctors, on the other hand, likely would have earned close to 100 percent of their incomes directly from patients.