8 ms·

I was confused by that part too because the article goes on to say teaching colleges "have an incentive to offer residencies in specialties from which they can

I was confused by that part too because the article goes on to say teaching colleges "have an incentive to offer residencies in specialties from which they can get the most revenue per resident." My guess is the 150K number ignores the revenue contribution of the residents (which must be significant because they carry out a significant amount of the work that requires a doctor at a hospital) I did a google search and found one article that seems to confirm this: "Whether the programs are ultimately costs or moneymakers for hospitals is mostly unknown. Expenses tied directly to the programs are tracked, but overall cost-benefit accounting that would take into account such things as savings or lower medical bills for patients from the use of lower-paid residents instead of practicing physicians isn't done." http://www.modernhealthcare.com/article/20150719/news/307199999 http://www.modernhealthcare.com/article/20150719/news/307199... The argument that federal funding is the only way to create more educational "seats" for doctors seems strange since the article claims they are paid much more than other fields, and is not really laid out well in the article.

chimeracoder 9y ago
> but overall cost-benefit accounting that would take into account such things as savings or lower medical bills for patients from the use of lower-paid residents instead of practicing physicians isn't done This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals. An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.
- canes123456 9y ago
  Not if the government already pays for it. Why open up self-funded slots and show that the government doesn't need to pay for it? If you make a small profit, you are just putting the other pure profit slots at risk...
  - chimeracoder 9y ago
    > Not if the government already pays for it. Why open up self-funded slots and show that the government doesn't need to pay for it? If you make a small profit, you are just putting the other pure profit slots at risk... I somehow doubt Hospital A, which has zero residency slots and receives zero residency funding from Medicare, cares if Hospital B down the road somehow loses their subsidies. There is no "pure profit slot". Residency programs do not make money for the hospital. If they did, hospitals that do not have residency programs would open self-funded residency programs, and/or hospitals that already do have residency programs would expand theirs.
    - chuckkir 9y ago
      It is possible that if the AMA or others is intentionally restricting the supply then any hospital that started its own residency could have trouble hiring regular doctors. I am not claiming this is the case, but it is one reason that hospitals might avoid something that the free market would indicate.
    - phkahler 9y ago
      Hospitals do not do their accounting in a normal way. When you or your insurance gets a bill, the doctors are often listed separately. In other words, patients pay for them directly for services, they are not paid as employees of the hospital. That means for residents, someone's got to pay for them. They are not seen as lower cost labor because doctors are not accounted for as high cost labor. I'm not sure how it's done, but it's not the same as interns in engineering.
- sjg007 9y ago
  Are you sure it's not just a case of Hollywood style accounting?
  - chimeracoder 9y ago
    > Are you sure it's not just a case of Hollywood style accounting? Yes, for the reason I said: > An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money. Even if you don't trust the accounting numbers, you have to trust the overall (lack of) incentive for hospitals to create self-funded programs.
    - jacobrobbins 9y ago
      I agree with this logic about "if residency programs predictably broke even" but I don't see any concrete support for that in the article. They don't have an accounting of revenue per doctor or at least the article has not shown one. Saying the benefit is social benefit doesn't help here, obviously it is it's a hospital, there needs to be revenue numbers in the mix to talk about breaking even.
    - jacobrobbins 9y ago
      re-reading your comment "This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital." I think perhaps you do not understand what residents do. Residents handle a portion of the patient workload. They provide direct economic benefit to the hospital by handling patient workload at a lower salary than more senior doctors. There is a hierarchical system by which work is reviewed by more senior doctors but this is used in all hospitals regardless of whether there are residents. The economic benefit to the hospital is that residents do the work for lower salary than doctors. Putting that into dollar terms is what this article has failed to do, likely because the data to do so is not there.
      - 9y ago
- akvadrako 9y ago
  It seems pretty strange that even after years of medical school, a hospital can't find a way to use a resident's skills to pay their salary.
  - rayiner 9y ago
    It's not that strange. Medicare has a physician fee schedule (PFS). Hospitals don't receive a PFS payment for services provided by a resident, unless a teaching physician is physically present during the key portions of the service, or under certain primary care exceptions. I'm not sure how private insurance companies do it, but I wouldn't be surprised if their rules weren't similar. A similar thing is happening in the legal field. Clients wont pay for work done by first or second year lawyers, so large firms are cutting back entry level hiring and many smaller firms have stopped hiring entry level lawyers entirely. Thus you have a bizarre situation where there is a huge oversupply of JDs, but private-practice associate salaries continue to go up because there is a limited supply of experienced attorneys.
    - crankylinuxuser 9y ago
      And if/when they cann't get a job, the state then revokes their credentials. Hilarity ensues.. Oh did I say hilarity? I meant the spiral of loss of job/homelessness/garnishment/destitution. And it's then illegal to use the credential to try to make money to recover from. Talk about being sold a bill of goods - Come get a degree from here, and if you can't find a job, we'll garnish you and remove your ability to use the degree you're being garnished for.
    - FireBeyond 9y ago
      They don't receive the PFS payment, but they certainly do for room fees, imaging, labs and other diagnostics, not to mention medications. And the patient is still tended to by nurses, who do absolutely generate revenue for the hospital. While they don't get a PFS payment, we also can't provide that Medicare pays for the residency and then everything else is a charity case for the hospital.
      - 9y ago
- sfashset 9y ago
  This is not-even-wrong levels of reasoning here. Personally, your comments on this subthread, and the confidence with which you've delivered them, will stay with me for a long time, and whenever I find myself nodding along with something that is facilely convincing and authoritatively stated, I'll think back to your posts and remember to be a bit more skeptical, a bit more discerning. For that, I thank you. For the rest, well, I can't be as laudatory. >This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals. It's pretty clear you are wrong here. Let's look at actual sources for a change: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Teaching-Physicians-Fact-Sheet-ICN006437.pdf https://www.cms.gov/Outreach-and-Education/Medicare-Learning... "Medicare pays for services furnished in teaching settings through the Medicare Physician Fee Schedule (PFS) if the services meet one of these criteria: 1 They are personally furnished by a physician who is not a resident 2 They are furnished by a resident when a teaching physician is physically present during the critical or key portions of the service 3 They are furnished by a resident under a primary care exception within an approved Graduate Medical Education (GME) Program" Crucially, there is no distinction between how much a hospital can charge for services an attending working alone has delivered (1), and how much it can charge for services a resident has delivered, as long as the attending signs off on it (2). You might naively suppose that the "physically present" part of (2) means that both attending and resident are in the room for the dx differential, and through a Socratic back and forth they jointly treat the patient, and you'd be mistaken. And of course, if you're in your final year of residency, or you're a Chief Resident, the oversight an attending will choose to exercise will be perfunctory. Read more about just how much (or little) it take to technically comply with these rules: http://www.hcpro.com/HIM-283624-8160/Coding-billing-and-documentation-tips-for-teaching-physicians-interns-residents-and-students.html http://www.hcpro.com/HIM-283624-8160/Coding-billing-and-docu.... Then reread this short, moving piece published in the NYT mag for an illustration: https://www.nytimes.com/2017/10/24/magazine/the-rules-of-the-doctors-heart.html https://www.nytimes.com/2017/10/24/magazine/the-rules-of-the.... As a resident in his third year out of medical school, how was it that the author was able to essentially run his own service if residents are really just stumps of malformed medical errata, all but useless unless they have their hands held by an attending? Or just ask yourself: how is it that you can give a hospital a senior resident in radiology, or anesthesiology, or dermatology, who is just months away from demanding 350k+ on the job market, cap the resident's salary at 60k or less, and have the ability to work them for up to 80 hours, how is it that a hospital fails to make money here? Sure, you can go through all the malpractice costs that have to be priced in, the free cafeteria food, the upkeep of the residents lounges. Sure, and Google spends a ton on the great insurance and fun perks it offers too. Somehow they manage to make sure they don't lose money on their employees. >An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money. An even easier way to see you're making things up is to realize that medical residents can earn up to $100+/hr by moonlighting[0], all while they're apparently causing their home institutions to "predictably lose money" while earning an 10% hourly rate. [0] https://www.staffcare.com/medical-moonlighting-for-residents-pros-and-cons/ https://www.staffcare.com/medical-moonlighting-for-residents... and the doctors discussed in this article aren't getting these opportunities after some long rigorous period. One of them was in his second year of residency once he decided to start moonlighting, literally a year out of med school. Again, this goes to show residents are pretty valuable right off the bat, are (overall, generally speaking) a bargain for their home institutions, and only get more financially profitable as time goes on.
refurb 9y ago
I was confused by that part too because the article goes on to say teaching colleges "have an incentive to offer residencies in specialties from which they can get the most revenue per resident." One way this makes sense is how Medicare pays teaching hospitals. A hospital gets $X for a procedure code. If they are a teaching hospital, they get $X+2% (can't remember the exact bump but it's relatively small). The more expensive the procedure, the bigger the bump for being a teaching hospital. That's the incentive to get residents practicing expensive specialties.

chimeracoder 9y ago

> but overall cost-benefit accounting that would take into account such things as savings or lower medical bills for patients from the use of lower-paid residents instead of practicing physicians isn't done This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals. An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.

canes123456 9y ago
Not if the government already pays for it. Why open up self-funded slots and show that the government doesn't need to pay for it? If you make a small profit, you are just putting the other pure profit slots at risk...
- chimeracoder 9y ago
  > Not if the government already pays for it. Why open up self-funded slots and show that the government doesn't need to pay for it? If you make a small profit, you are just putting the other pure profit slots at risk... I somehow doubt Hospital A, which has zero residency slots and receives zero residency funding from Medicare, cares if Hospital B down the road somehow loses their subsidies. There is no "pure profit slot". Residency programs do not make money for the hospital. If they did, hospitals that do not have residency programs would open self-funded residency programs, and/or hospitals that already do have residency programs would expand theirs.
  - chuckkir 9y ago
    It is possible that if the AMA or others is intentionally restricting the supply then any hospital that started its own residency could have trouble hiring regular doctors. I am not claiming this is the case, but it is one reason that hospitals might avoid something that the free market would indicate.
  - phkahler 9y ago
    Hospitals do not do their accounting in a normal way. When you or your insurance gets a bill, the doctors are often listed separately. In other words, patients pay for them directly for services, they are not paid as employees of the hospital. That means for residents, someone's got to pay for them. They are not seen as lower cost labor because doctors are not accounted for as high cost labor. I'm not sure how it's done, but it's not the same as interns in engineering.
sjg007 9y ago
Are you sure it's not just a case of Hollywood style accounting?
- chimeracoder 9y ago
  > Are you sure it's not just a case of Hollywood style accounting? Yes, for the reason I said: > An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money. Even if you don't trust the accounting numbers, you have to trust the overall (lack of) incentive for hospitals to create self-funded programs.
  - jacobrobbins 9y ago
    I agree with this logic about "if residency programs predictably broke even" but I don't see any concrete support for that in the article. They don't have an accounting of revenue per doctor or at least the article has not shown one. Saying the benefit is social benefit doesn't help here, obviously it is it's a hospital, there needs to be revenue numbers in the mix to talk about breaking even.
  - jacobrobbins 9y ago
    re-reading your comment "This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital." I think perhaps you do not understand what residents do. Residents handle a portion of the patient workload. They provide direct economic benefit to the hospital by handling patient workload at a lower salary than more senior doctors. There is a hierarchical system by which work is reviewed by more senior doctors but this is used in all hospitals regardless of whether there are residents. The economic benefit to the hospital is that residents do the work for lower salary than doctors. Putting that into dollar terms is what this article has failed to do, likely because the data to do so is not there.
    - 9y ago
akvadrako 9y ago
It seems pretty strange that even after years of medical school, a hospital can't find a way to use a resident's skills to pay their salary.
- rayiner 9y ago
  It's not that strange. Medicare has a physician fee schedule (PFS). Hospitals don't receive a PFS payment for services provided by a resident, unless a teaching physician is physically present during the key portions of the service, or under certain primary care exceptions. I'm not sure how private insurance companies do it, but I wouldn't be surprised if their rules weren't similar. A similar thing is happening in the legal field. Clients wont pay for work done by first or second year lawyers, so large firms are cutting back entry level hiring and many smaller firms have stopped hiring entry level lawyers entirely. Thus you have a bizarre situation where there is a huge oversupply of JDs, but private-practice associate salaries continue to go up because there is a limited supply of experienced attorneys.
  - crankylinuxuser 9y ago
    And if/when they cann't get a job, the state then revokes their credentials. Hilarity ensues.. Oh did I say hilarity? I meant the spiral of loss of job/homelessness/garnishment/destitution. And it's then illegal to use the credential to try to make money to recover from. Talk about being sold a bill of goods - Come get a degree from here, and if you can't find a job, we'll garnish you and remove your ability to use the degree you're being garnished for.
  - FireBeyond 9y ago
    They don't receive the PFS payment, but they certainly do for room fees, imaging, labs and other diagnostics, not to mention medications. And the patient is still tended to by nurses, who do absolutely generate revenue for the hospital. While they don't get a PFS payment, we also can't provide that Medicare pays for the residency and then everything else is a charity case for the hospital.
    - 9y ago
sfashset 9y ago
This is not-even-wrong levels of reasoning here. Personally, your comments on this subthread, and the confidence with which you've delivered them, will stay with me for a long time, and whenever I find myself nodding along with something that is facilely convincing and authoritatively stated, I'll think back to your posts and remember to be a bit more skeptical, a bit more discerning. For that, I thank you. For the rest, well, I can't be as laudatory. >This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals. It's pretty clear you are wrong here. Let's look at actual sources for a change: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Teaching-Physicians-Fact-Sheet-ICN006437.pdf https://www.cms.gov/Outreach-and-Education/Medicare-Learning... "Medicare pays for services furnished in teaching settings through the Medicare Physician Fee Schedule (PFS) if the services meet one of these criteria: 1 They are personally furnished by a physician who is not a resident 2 They are furnished by a resident when a teaching physician is physically present during the critical or key portions of the service 3 They are furnished by a resident under a primary care exception within an approved Graduate Medical Education (GME) Program" Crucially, there is no distinction between how much a hospital can charge for services an attending working alone has delivered (1), and how much it can charge for services a resident has delivered, as long as the attending signs off on it (2). You might naively suppose that the "physically present" part of (2) means that both attending and resident are in the room for the dx differential, and through a Socratic back and forth they jointly treat the patient, and you'd be mistaken. And of course, if you're in your final year of residency, or you're a Chief Resident, the oversight an attending will choose to exercise will be perfunctory. Read more about just how much (or little) it take to technically comply with these rules: http://www.hcpro.com/HIM-283624-8160/Coding-billing-and-documentation-tips-for-teaching-physicians-interns-residents-and-students.html http://www.hcpro.com/HIM-283624-8160/Coding-billing-and-docu.... Then reread this short, moving piece published in the NYT mag for an illustration: https://www.nytimes.com/2017/10/24/magazine/the-rules-of-the-doctors-heart.html https://www.nytimes.com/2017/10/24/magazine/the-rules-of-the.... As a resident in his third year out of medical school, how was it that the author was able to essentially run his own service if residents are really just stumps of malformed medical errata, all but useless unless they have their hands held by an attending? Or just ask yourself: how is it that you can give a hospital a senior resident in radiology, or anesthesiology, or dermatology, who is just months away from demanding 350k+ on the job market, cap the resident's salary at 60k or less, and have the ability to work them for up to 80 hours, how is it that a hospital fails to make money here? Sure, you can go through all the malpractice costs that have to be priced in, the free cafeteria food, the upkeep of the residents lounges. Sure, and Google spends a ton on the great insurance and fun perks it offers too. Somehow they manage to make sure they don't lose money on their employees. >An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money. An even easier way to see you're making things up is to realize that medical residents can earn up to $100+/hr by moonlighting[0], all while they're apparently causing their home institutions to "predictably lose money" while earning an 10% hourly rate. [0] https://www.staffcare.com/medical-moonlighting-for-residents-pros-and-cons/ https://www.staffcare.com/medical-moonlighting-for-residents... and the doctors discussed in this article aren't getting these opportunities after some long rigorous period. One of them was in his second year of residency once he decided to start moonlighting, literally a year out of med school. Again, this goes to show residents are pretty valuable right off the bat, are (overall, generally speaking) a bargain for their home institutions, and only get more financially profitable as time goes on.

refurb 9y ago

I was confused by that part too because the article goes on to say teaching colleges "have an incentive to offer residencies in specialties from which they can get the most revenue per resident." One way this makes sense is how Medicare pays teaching hospitals. A hospital gets $X for a procedure code. If they are a teaching hospital, they get $X+2% (can't remember the exact bump but it's relatively small). The more expensive the procedure, the bigger the bump for being a teaching hospital. That's the incentive to get residents practicing expensive specialties.