• Beating a dead horse, WSJ edition

    I’m like the millionth person to pile on this Suzanne Sommers editorial (seriously, what was the WSJ thinking?), but I have to get my two cents in. Jonathan Chait has done his usual masterwork, and Josh Barro crushed it as well. I want to focus on some of her claims about Canada:

    It went on to say that young Canadian medical students have no incentive to become doctors to humans because they can’t make any money. Instead, there is a great surge of Canadian students becoming veterinarians. That’s where the money is. A Canadian animal can have timely MRIs, surgeries and any number of tests it needs to receive quality health care.

    Yeah, cause doctors are homeless in Canada. Here are some actual data:

    [R]esearch, led by Jeremy Petch of the Li Ka Shing Institute of St. Michael’s Hospital in Toronto, calculated net payments to physicians in Ontario. To do so, they looked at physician overhead costs, as collected in the National Physicians’ Survey. 

    Overhead varies widely by specialty, from 38 per cent for ophthalmologists to 10 per cent for medical oncologists, and, of course, many hospital-based docs have little or no out-of-pocket costs. Overall, overhead for Canadian doctors is 26 per cent of their billings. Because that number is self-reported, it may be a tad overstated, but it’s the best figure available.

    Practically, that means Canadian doctors have an average annual income (before taxes) of a little more than $225,000.

    But, again, there is a range, from psychiatrists, the specialists who bill the least ($232,000 gross; $186,000 net), to ophthalmologists, who bill the most ($676,000 gross; $418,000 net).


    How out of touch do you have to be to think salaries like that equate to “can’t make any money”?

    Sommers goes on:

    All of my husband’s cousins are doctors. Several have moved to the U.S. because after their years of intensive schooling, they want to reap financial rewards.

    Ah, yes. It’s the “everyone knows a doctor who left Canada to move to the US ” meme. I can’t bring myself to try this again, so here’s my old post:

    physician migration

    So when emigration “spiked,” 400-500 doctors were leaving Canada for the United States.  There are more than 800,000 physicians in the U.S. right now, so I’m skeptical that every doctor knows one of those emigres. But I’d especially like you to pay attention to the yellow line, which is the net loss of doctors to Canada.

    In 2003, net emigration became net immigration. Let me say that again. More doctors were moving into Canada than were moving out.

    Then there’s this:

    physician views

    And this:

    physician satisfaction


    So spare me the crap about how doctors are miserable in Canada and moving here to be happier. The opposite is true.

    She’s not done:

    My 75-year-old Canadian girlfriend was denied treatment because she was too old. She died recently, having been given palliative care. That’s all the system would allow.

    Does anyone actually believe this crap? There is nothing, and I mean NOTHING, in the Canadian health care system that denies care to people based on age. One of the only relevant studies I’ve ever seen comparing the US to Canada is this one (emphasis mine):

    Research from Canada and the United States suggests that not offering dialysis to patients who might benefit still occurs. This study was conducted to investigate nonreferral and nonacceptance to dialysis by primary care physicians (PCPs) and nephrologists in these countries. We surveyed a random sample of Canadian and US PCPs and nephrologists concerning their attitudes toward and experience with withholding dialysis in patients with advanced chronic renal failure. In response to a question about whether the physician believes there should be an age beyond which dialysis should not be offered, 12% of Canadian PCPs, 20% of US PCPs, 4% of Canadian nephrologists, and 9% of US nephrologists answered yes. When asked about their recommendations concerning dialysis initiation in 10 vignettes of patients with impending end-stage renal disease (ESRD), the responses of Canadian and US physicians were similar. PCPs compared with nephrologists were less likely to recommend dialysis in cases with physical illnesses and more likely to recommend it in cases with neuropsychiatric impairments. Over a 3-year period, 13% of Canadian PCPs and 19% of US PCPs reported nonreferral to dialysis at least once. Withholding rates were 25% for Canadian PCPs, 16% for US PCPs, 13% for Canadian nephrologists, and 17% for US nephrologists. We conclude that although nonreferral of patients who might benefit from dialysis still occurs, it does not seem to be common, and the attitudes of Canadian and US physicians toward this issue are similar and could not entirely account for the much greater incidence of treated ESRD in the United States. PCPs and nephrologists should continue to be educated about the modern criteria for patient selection for dialysis.

    Look at the first bolded statement. It says that more doctors in the US believed that there should be an age at which we should not offer dialysis. MORE IN THE US. The second bolded statement shows that more primary care doctors in the US reported actually not referring people for dialysis. MORE IN THE US. Withholding rates themselves were somewhat balanced, higher in Canadian PCPs, but lower in Canadian nephrologists.

    What is clear, however, is that there is no evidence for Canadian doctors withholding care from people because they are old.

    And – ARGH – I can’t believe I have to write this, but she’s attacking the ACA, which is NOT single payer, in defense of Medicare, which is totally a single payer program. Does she really not get that? Does she even know that the Canadian single payer program is also called “Medicare”?

    There are many legitimate reasons to dislike the ACA. None of her “Canadian” attacks come even close.

    I look forward to more “corrections” in the WSJ about this piece. It’s a classic.


    • Aaron,

      The Canadian “study” you cited is based on faulty data.

      Let me deconstruct it a bit.

      Their claim: Average reimbursement pre-tax, pre-overhead = 307k.
      Their claim: Average overhead percentage = 27 percent.

      Based on their data, that means that Canadian docs have approx 82k in overhead costs.

      That 82k in overhead has to cover the following:
      1. Rent
      2. Utilities
      3. Support staff
      4. Malpractice
      5. Billing/coding support
      6. Clinical/lab supplies

      Now we know based on a study by Jenkins et al in JAMA that the average physician in Canada supports 2 clinical persons and 1 “support” person. In America, the number is significantly higher at 4 clinical persons and 2 “support” persons.

      I submit to you that it is virtually impossible for a doctor billing 307k to have only 82k in overhead. Even for hospital employed physicians that work otu of the hospital clinic and dont have to pay rent, their overhead is going to be higher than 82k.

      Even if you assume a small family practice with 1 nurse and 1 front office person, you are generating at least 80k in overhead w/ salary and benefits.

      These numbers simply dont work. Canadian docs overhead is not as high as the USA (overhead can routinely run sixty percent) but its not 26 percent either.

      • “Now we know based on a study by Jenkins et al in JAMA that the average physician in Canada supports 2 clinical persons and 1 “support” person.”

        We do? Where? Show me.

        ‘Cause in my doctor’s office there are about 6 GPs, with about 3 clinical staff and 2 clerical support people. By your accounting, that would mean there would be 12 + 6 people, which there just aren’t. In fact, there are about a third of that number.

        “That 82k in overhead has to cover the following:
        1. Rent
        2. Utilities
        3. Support staff
        4. Malpractice
        5. Billing/coding support
        6. Clinical/lab supplies”

        1. Rent – split 6 (or more) ways.

        2. Where I live mild winters, mild summers, and very low hydro-electric rates mean some portion of “Utilities” are probably not a major expense.

        3. Support staff – dealt with above

        4. Malpractice is neither a hot-button issue nor a significant cost driver in Canada.

        5. Billing/coding support in Canada is almost a non-issue, as almost everything gets billed to that fast paying “single payer” through province wide standardization. The admin expense of figuring out and complying with a different system for every insurer, billing, and collections (alleged to be a very high cost in the US) would have minimal cost impact in Canada.

        6. Everything but the simplest tests would be referred to a medical lab, so clinical/lab supplies would likely also be a minimal cost, particularly compared to the US.

        Your made-up pulled-out-of-the-air assumptions and derived explanation of why Canadian doctors’ expenses cannot possibly be 26%/27% are no more legitimate than the bogus claims made in the WSJ article.

      • docjones, if you care to actually read the paper before declaring it faulty, you can do so here:http://www.ncbi.nlm.nih.gov/pubmed/23968613

        As Ken Hamer rightly points out, the support staff claims you make are what are faulty. Very few physicians in Canada personally support that level of staff.

        Moreover, in Ontario (Canada’s largest province), primary care groups have their allied health staff (RNs, RDs, NPs, Pharmacists, etc) paid for directly by the government health plan, so they only pay for rent, clerical staff, etc. out of their billings. This is one of the reasons why overhead is lower than you expect.

        Moreover, many specialist physicians have their offices in state-owned hospitals, with their rent, allied health and clerical staff all paid out of their hospital’s global budget. Many of these physicians have overhead under 10% of their total billings.

        Also, Canada is not nearly as litigious as the US, and malpractice insurance is provided by a single non-profit organization. As a result, malpractice insurance in Canada is a fraction of that in the US. Moreover, several provincial medical associations have collectively bargained with the government to reimburse them for their insurance payments, further driving down overhead.

        Will you find some docs in Canada who net less than $225k a year? Of course you will – that’s the nature of a mean. Will you find a ton who may much, much more than $225k a year? You bethca.

      • In arguendo even if Canadian doctors make less, Canadian doctors have higher satisfaction rating. I would take a somewhat lower pay to have higher job satisfaction.

    • Hm a very interesting post by Aaron or Austin Frakt would be to elaborate on the second to last paragraph (i.e., what are the legitimate reasons to dislike the ACA). Or even under what circumstances they would admit the ACA is a bad law (even if those circumstances are far out there, it would be interesting insights for their readers)

      • I too would be interested to see this.

        Based on their previous writings, I would imagine lack of effective cost control would be at the top of this hypothetical list. Included in this would be the lack of a public option to compete with the for-profit insurance plans (and maybe something about reference pricing?).

        I would also be curious whether the early lessons from the rollout, with federal failures in implementation, and obstruction in red states, would push them in a different direction regarding the level of federal vs. state control of the exchanges.

        I could see the employer mandate and preserving the tax benefit for employer-provided insurance on there too. Plus unintended problems that cropped up in the drafting, such as the ‘family glitch’, the ambiguity about whether federal exchanges can provide subsidies, the Grassley Amendment, etc.

    • I know a couple of Canadian born docs. They both claim the same reason for choosing to move from Canada to Southern California. Hint: January is a big part of the reason.

    • Since when is Suzanne Sommers a health policy expert? Who’s next Jenny McCarthy? Or how about a fully licensed, accredited, and qualified naturopath? Which would probably be a step towards knowledge of science and medicine?

      We gave up on the WSJ a number of years ago.

    • Ha ha ha ha ha ha ha…. I should have at least glanced at the article before replying above.

      I saw the WSJ author’s (misspelled) name as Suzanne Sommers (with 2 “m”s) in Aaron’s post and casually noted the similarity to the name of a seriously flaky crackpot actress by the name of Suzanne Somers (1 “m”) but would never have believed it was actually that crackpot that was writing medical editorials for the WSJ.

      That anyone, and I mean anyone, would take such an article seriously stretches credulity to new lengths.

    • Homeless doctors: Here’s B.C.’s Medicare payments to doctors for the year ended March 31, 2013 (government fiscal year). http://www.health.gov.bc.ca/msp/legislation/pdf/bluebook2012.pdf

      I didn’t scroll through the entire list but noticed at least one over $2 million billings. My family doctor is $304K, one specialist $307K, and another $664K.

      Would you be able to address some cultural differences US/Canada?
      1. I refuse to subsidize my neighbor’s medical care vs. I’ll subsidize my community’s health knowing that at some point, I will be the one being subsidized.
      2. Patients will undergo expensive testing and medical procedures unless the cost to them prevents them from taking advantage of the system vs. no one in their right mind would undergo unnecessary medical procedures.
      3. Insurance companies good/government bad vs. insurance companies awful/ government less so.
      4. Medicine is complicated so medical insurance has to be complicated for patients vs medicine is complicated but the patient should not have to deal with how its paid for (I recently looked at supplemental medical insurance and decided to keep being self-insured!)
      5. Health care costs will bankrupt the country’s governments vs. aging boomers will increase demand for medical services and the delivery systems need to be modified to meet the demand.

    • (seriously, what was the WSJ thinking?)

      They are laughing all the way to the bank. I will tell you a secret they are business of attracting eyes to sell ads. they are not in the business of weighing policy intelligently that is why I read your blog and do not read the WSJ or the NYT.

      • If only everyone was that sensible.

        The problem is that many people will read that article, then claim it as proof of whatever ideological dogma they hold.

    • You totally made my day. Keep up the good work.

    • My doctor came back to Canada after working in the US. I asked him why and his answer was “so I could practice medicine instead of running a bill collection agency”.

    • The part I find hilarious is the implication that Canadian
      students are becoming veterinarians because “That’s where the money
      is.” I guess she doesn’t know that the average veterinary salary in
      Canada is less than 100k.