Doctors are increasingly choosing to trade medicinal necessities for a luxury practice, a factor that many who simply count raw numbers of doctors fail to take account of. Now, one must acknowledge that there are several reasons an ob-gyn would choose to switch from delivering babies to performing cosmetic surgery: the hours are better, one doesn’t have to deal with the hassle of insurer and Medicare reimbursement, one’s patients are likely to be more genteel. But surely the $120,000/year difference in malpractice insurance has at least something to do with it on the margin. (Natasha Singer, “More Doctors Turning to the Business of Beauty”, New York Times, Nov. 30).
Ob-gyns become cosmetic surgeons
Doctors are increasingly choosing to trade medicinal necessities for a luxury practice, a factor that many who simply count raw numbers of doctors fail to take account of. Now, one must acknowledge that there are several reasons an ob-gyn would choose to switch from delivering babies to performing cosmetic surgery: the hours are better, one […]
8 Comments
It’s a good business decision and one that may well keep doctors in fields which have become increasingly unprofitable….of course, since it concerns health care, I’m sure SOMEONE will try to find a way to regulate the creativity out of it….
There are a number of factors that might influence an ob/gyn to change practice. And it is entirely conceivable that perceived exposure to liability and a perceived economic burden from liability insurance could play a role, as you say, “on the margin.”
But I wonder (a) what is the real (as opposed to perceived) economic impact of liability premiums (i.e. what are they as a percentage of operating costs, what has been the impact on ob/gyn real income, etc.) and (b) how marginal are these predictors (i.e. are there other, more significant predictors such as market saturation)?
Seth, careful with the spin. It’s more than a “perception” that $140,000/year is bigger than $20,000/year. And that liability insurance difference reflects a very real difference in economic impact of liability. If doctors perceive higher economic risks from malpractice it is because they actually face higher economic risks from the very random malpractice system. And given the stance of anti-reformers on non-economic damages, reform opponents are surprisingly unwilling to include the non-economic psychic costs to doctors of being unjustly sued, though studies certainly show that this factor has a huge impact on doctors’ practice decisions far above actual economic impact, to the point that, if one combines Kessler’s and Klick’s studies, non-economic damages caps have the same effect on doctors’ willingness to practice as giving them a 40% raise in income.
Separately and unrelatedly, do you think calling someone a “Tucker Carlson wannabe” is actionable? Because if so, you may have a suit against David Lat.
Ted, I qualified real v. perceived not to deny that $140k is much larger than $20k, but because I am curious as to the financial only (as opposed to psychological) impact of the $140K. Forgive me if I am ineloquent in my question.
The only research I have read on this is the Rodwin article in the May/June Health Affairs. His research suggests that, to such an impact, “perceptions of a crisis conflict with empirical evidence.” This is not to discount the psychological impact, but to satisfy my own curiousity about the one v. the other. I do not doubt the psychological impact, nor do I suggest that it is unimporant. I wonder, though, if the two don’t require separate policy solutions.
As for spin, I will grant that your calling the malpractice system “very random” was unintentional spin if you will grant me the same courtesy. Sometimes, perhaps, we are all too immersed in loaded language to unconsciously avoid it.
As to the unrelated point, I can only laugh and be glad that I kept my hands away from my face and my mouth shut. Damn Tucker Carlson – he ruined the bowtie for everyone.
The scholars who say perceptions differ from whether there is a crisis are the scholars who say there isn’t a crisis. (Rodwin, for example, uses the wrong measurements, and gets his results only by cutting off the study at 2000.) I certainly agree that the policy solutions needed are different if there is not a problem with the medical malpractice system than if there is.
I think “random” is a fair characterization of the status quo, even if one believes that malpractice is underdeterred.
Crisis or not, $160,000 is an enormous overhead cost for an OB/Gyn. Although this assumption may be incorrect, it likely that this is the base cost for a normal risk practioner in NY(i.e. no suits, the cost reflects future risk regardless of practioner record). This brings up a not often touched on subject of the tort debate: the concept of the “high-risk” specialty. This designation is often given to OB/Gyn or Neurosurgery. Is this because of the risk of practice itself? Probably more so with neurosurgery than OB. Or, is it because of the risk of suit? The obvious actuarial answer is risk of suit. Because, if one analyzes the progress made by OB/GYN in making safer the rather risky act of childbirth, they should be lauded as one of the greatest successes in medical history (see Atul Gawande’s recent New Yorker article). Instead, they’ve been thanked with staggering insurance premiums. The rates of suit have actually climbed inversly to bad outcomes over time. Victims of their success.
However, if one was to believe the tort bar, it is because they are negligent physicians. After all, only bad physicians get sued, right? So, are we to conclude that OB (or neurosurgery) somehow selectively manages to attract incompetent medical school graduates? Again, believe the tort bar and that must be the case. Except that it doesn’t pass the straight face test. Again, historical data suggests quite the opposite – childbirth is safer than ever. Too bad we may not figure this out until our babies cry out for Botox.
“I am curious as to the financial only (as opposed to psychological) impact of the $140K.”
The financial impact is $120,000 a year. The cost of insurance is just a dead loss – if you pay less, you have more left, if you pay more, you have less left. You get exactly the same value from it (protection from lawsuits) not matter what you pay for it.
Now, if ther is some difference in base incom betwen the 2 groups, thn you might have an interesting point, but that’s an entirely different issue.
Personally, I wouldn’t expect there to be a big difference – while OB/GYNs have a better guarantee of business, their costs are generally held in check by insurance issues and ability to pay; cosmtic surgery is (generally) elective, and can thus cast whatever the market will bear, but there’s not as much business (not guaranteed, anyway).
But I seriously doubt OB/GYNs gt paid $120,000 a year more than cosmetic surgeons.
To put the dollars in perspective, most of the cost of OB/GYN insurance is for the OB part. So if 100K is for the OB practice and the doc is really busy with a young practice (i.e. pregnant patients who have not aged into mid and late life GYN patients) he will deliver up to 200 a year. A more typical doc will deliver 100 per year. The math is then 500-1000 dollars of the professional fee is passed directly from the patient/payer to an insurer. Since few patients actually pay directly with cash they just ignore this. But imagine you were a cash paying patient and you saw the itemized bill explaining where your dollars are going.