Is Medicare Paying Doctors Unfairly Based On Gender?

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A recent TIME magazine article highlighted a study which declared that Medicare pays nearly $19,000 less to female doctors. Since the government has stressed equal pay, this sounds alarming.

But is it accurate? The paper by Tejas Desai et al., in Post Graduate Medical Journal, looked at thirteen medical specialties using the Center for Medicare Services (CMS) public data files on part B (physician payments) for 2012. They concluded, "After adjustment for how hard a physician works, his/her years of experience and his/her productivity, female healthcare providers are still reimbursed less than male providers."

This may get attention from journalists and those with confirmation bias, but it fails the critical thinking test among anyone who has dealt with CMS. The system may have flaws but it is impossible to be anything but gender-blind in making payments. Those are instead based on Relative Value Units (RVUs); a system designed to quantify the amount of effort a physician makes in providing a specific service.

RVUs are a controversial method, but now they are a healthcare standard. In simple terms, the greater the effort or medical complexity, the higher the RVU value. That value is multiplied by a conversion factor, itself modified by the regions cost of labor, malpractice and other physician costs, to arrive at a Medicare payment.

There is no way to adjust for experience, productivity or gender.

So how did the Desai paper reach its conclusion? Rather than use RVUs as a measure of work they used a surrogate, number of patients seen. The volume of patients cared for makes superficial common sense but it does not take into account the varying intensity of services provided. Their surrogate value actually eliminates CMS's adjustment for complexity- the RVU. Similarly, their surrogate measure of productivity, number of services provided, eliminates complexity. Oddly, they equate productivity with volume, making no effort to consider the amount of varying work involved - exactly the opposite of medical reality and the RVU system.

In short, they created a straw man and got a prominent national magazine to claim it is real.

When you recognize the flaw in their surrogate measures, you can see that female healthcare providers instead were more likely to provide services of lower complexity (smaller RVUs) but even that is really irrelevant when it comes to males or females. It is the providers or their electronic medical records (tuned to code services at the highest RVU level possible) that tell CMS the service they provided, there is no gender factor.

Of course, we can ask why female doctors provide more lower complexity service; we can try and determine whether women routinely under-value their services or if they are more inclined to go into healthcare with smaller RVUs that nonetheless have a great deal of benefit to the public.

What can't be done, and shouldn't have been done, is concluding that CMS is discriminating in payments to women.