I have always heard that physician reimbursement makes up about 20 to 25 percent of the cms budget. Doctors aren't making much off of Medicare/Medicaid compared to other insurers. I think the "doctors make too much" debate is a separate issue. As for anesthesia, we are reimbursed 30% of what a private insurer would have paid. Not 30% less but a true 30%. Most specialties and primary care it's more like 60 to 80%. Anesthesia folks take Medicare because we don't really have much of a choice. We are a hospital based specialty and pretty much take care of everybody who walks in the door. Doctors with their own clinic do have a choice. All I'm saying is that there is a certain level of reimbursement that will make these independent businesses decide they can no longer afford to take what cms has to offer.
Your points are all well-taken. I think any discussion of "what doctors make" has to account for the differences in doctors, b/c some of them make huge amounts of money, and some can barely cover their overhead.
Nonetheless, if we're talking about health-care spending, and if we agree that federal health-care spending is too high, we have to specify where it should be cut. Every dollar spent for health care is a dollar that someone in the health care industry counts as revenue.
So if we're going to cut spending, we have to decide whose revenue has to be cut.
Since I asked the question, it's only fair that I give a first tentative answer.
1) pharmaceutical and medical-device companies. As an industry, they have one of the highest profit margins in the country. They often claim that if their profits are cut, say, from 10% to 5%, that they will be unable to fund research for new, lifesaving medications, but this is clearly absurd, for many reasons that most of you are already well aware of.
So let's cut pharmaceutical-industry revenue. A good way to start is to allow CMS to negotiate for lower prices per unit purchased. My understanding is that they are prohibited by law from doing this now ( a win for the PhRMA lobby and a loss for the country).
2) Health insurance companies. This is less of a juicy target then pharma, because they are in a slightly more competitive market environment already. I'm less knowledgeable about how to cut revenue for these guys, but I suspect that others on this board have some ideas.
3) Lawyers. This is red-meat for the conservatives so I'll throw it in because I'm a bipartisan kind of guy. Federal tort reform, EMTALA reform, etc. that relieves the pressure on physicians to spend other people's money like drunken sailors because the personal liability risk for a less-than-optimal outcome would cut revenue to the hospitals and pharma firms.
Overall, I think it's absurd not to look abroad for ideas, because other advanced nations have succeeded at taming costs where the US has failed. Their medical outcomes are better in many (most) ways. I have yet to read a convincing explanation of this from the "get government out of my medicare" crowd in the US, but if I ever hear one, I suspect it will be something like this:
People in this country have been convinced that the medical-industrial complex can and should solve all their problems. In pain? There's a pill for that. Too short? There's a pill for that. Feeling sad? I can do a 5-minute procedure in my office under general anesthesia that will make you happy forever!
Culturally, we have to do two things simultaneously:
1) commit ourselves to saying "no" to people with unpleasant sensations, unfulfilling sex lives, and chronic hair loss, e.g. "life is pain. Go exercise. Medicine cannot fix you." Conservatives are good at this. Liberals suck at it.
2) commit ourselves to saying "yes" to poor people who get hit by trucks, need a primary doctor to help them manage their diabetes, or throw a blood clot to their MCA. That's civilized, it's compassionate, and it isn't being done very well now, because these people can't pay much. Conservatives simply want these people to go untreated, or if they treat them, they want to bankrupt them. Liberals are good at this.