The news that physician incomes increased after a one-year drop is sure to raise eyebrows on Capitol Hill, where physicians are trying to shore up Medicare revenues.
But it's not likely to have a major impact on policy debates, according to politicos interviewed by MODERN HEALTHCARE last week.
Last year, physicians might have won sympathy by pointing to a nearly 4% decrease in median incomes in 1994 as reflected in a survey by the American Medical Association. The decline-the first in 14 years of reporting-also generated reams of mainstream media coverage last fall following an analysis of the phenomenon in the journal Health Affairs.
But the latest report shows a healthy 6.7% increase in the median income for 1995 (Jan. 6, p. 2).
Hospitals and physicians generally unite against Medicare cuts but clash when it comes to where spending reductions should be made.
Thomas Scully, president of the Federation of American Health Systems, said the physician income figures could have a small impact.
"I think people on the Hill are going to notice it. I think they're also going to look at the hospital (profit) margins this year," Scully said. Hospital figures also are expected to show a rosy bottom line, he said.
Some say overall physician income figures mean little because they don't indicate how Medicare contributes.
"Income figures are essentially irrelevant in the Medicare debate," said Robert Doherty, vice president of governmental affairs and public policy at the American Society of Internal Medicine. "There's always a potential that some members of Congress will draw the incorrect conclusion that there are (physician service) cost escalations going on."
Marie Michnich, senior associate executive vice president at the American College of Cardiology, said the data don't indicate current trends.
"Two years is a long time in the healthcare industry," she said.
HCFA figures supplied by physician groups show that physician service expenditures in Medicare had an annual growth rate of 6.5% from 1991 to 1995, compared with 10.5% for total Medicare spending during that period. Doherty anticipates that data due out in the next two months will show a similar pattern.
According to HCFA, spending on physicians and "other suppliers" is expected to decline as a percentage of total Medicare spending to 59.1% this year from 63.6% in 1995.
"I think we've got the facts on our side. On the income issue, there's no suggestion that there's a trend toward rapid escalation," Doherty said.
Tom Nickels, vice president and deputy director of federal relations for the American Hospital Association, said the issue physicians have used most effectively to argue their cause has been the existence of volume performance standards. Those standards are expected to eventually ratchet down utilization of physician services to unrealistic levels.
Doctors want to relax those standards and increase spending on physician services. The AMA's Medicare reform plan, released last month, calls for a hike on physician services of nearly twice the rate of that under last year's congressional balanced-budget legislation (Dec. 9, 1996, p. 5).
The AMA did not respond to requests for comment last week.