In a recent post, I documented the wide disparity between the incomes of primary care physicians and procedure oriented specialists.  On average, the net incomes of primary care physicians are 69% of specialists’ net incomes.  How did our nation’s customs regarding such a skewed reimbursement policy come about?  I don’t know, but I know how the gap is perpetuated.

The Relative Value Scale Update Committee (RUC), created by Congress in 1986, is a body whose members are supposed to be representative of the various specialties of medicine. Although Medicare makes the final reimbursement decisions for physicians, the committee’s recommendations carry great weight with CMS (Centers for Medicare and Medicaid Services).* 

 Here are the areas of medicine represented on the committee:

  • Anesthesiology
  • Cardiology
  • Interventional Cardiology
  • Dermatology
  • Emergency Medicine
  • Family Medicine
  • Gastroenterology
  • General Surgery
  • Geriatric Medicine
  • Internal Medicine
  • Nephrology
  • Neurology
  • Neurosurgery
  • Obstetrics/Gynecology
  • Ophthalmology
  • Orthopedic Surgery
  • Otolaryngology
  • Pathology
  • Pediatrics
  • Physical Medicine & Rehabilitation
  • Plastic Surgery
  • Primary Care
  • Psychiatry
  • Radiology
  • Thoracic Surgery
  • Urology

Thus, although Primary Care doctors constitute a little over 40% of the practicing physician population, they represent only 16% of the voting members of the RUC.  “Rigged” would be an appropriate term for the composition of this committee that is supposedly representative of the medical community.

Training Choices That American Medical Graduate Make

Graduating medical students seem to be aware of all this.  Their choices for residency training programs correlate with the high incomes associated with the specialties.  A good measure of these preferences is reflected in the percentage of American medical graduates who fill positions in residencies.  Graduating senior medical students are the preferred candidates for residency positions, the balance of unfilled positions going to international medical graduates.  By far, the residency training programs that promise the highest incomes are the most popular, and they fill almost all of their positions with Americans.  Primary care residencies, on the other hand, struggle to reach a 40% fill rate with this group.

Implications for the Quality of Healthcare in the United States

So the pipeline for training primary care doctors is in jeopardy. Does this matter?  A raft of research illustrates the problem with the de facto deemphasis on primary care.  Doctors in primary care specialties do patient centered work, not organ centered work.  They provide integrated healthcare for a large majority of healthcare needs and foster a sustained partnership with patients, all while managing multiple medical conditions. They consult specialists as necessary, coordinating care in what is often a labyrinth of care options.  Studies show this results in a decreased annual number of visits to specialty providers, with less frequent hospitalizations, fewer diagnostic tests, and overall reduced total medical charges. A strong primary care presence helps prevent illness and death, and that it is associated with a more equitable distribution of healthcare in populations. 

The current payment system favors high cost procedures over time spent on evaluation or management of care.  The U.S. has a high ratio of specialists to primary care physicians. 


First, let me acknowledge that specialists do good and important work.  My brief is that the imbalance in reimbursement is unfair and bad for healthcare in general.  But fixes to the scandalously imbalanced system are unlikely.  I have shown that the influential body that basically determines parameters for physician reimbursement is heavily stacked against primary care.  And the amount spent on federal lobbying for subspecialty care outnumbers primary care by an almost three to one ratio.  Relying on a feckless Congress for significant reform is quixotic.

Nevertheless, the issue that finds primary doctors to be compensated at a rate that produces incomes that are on average 69% of that of specialists has an easy theoretical fix…close the gap.  There are other issues besides money: the practice of primary care is more challenging–more paperwork and administrative burden, more off hour responsibilities, less perceived prestige.  But a policy that closes the gap in net incomes is surely the first step.

Raising primary care reimbursement is conceptually easy.  However, no one in this economy is looking to increase the nation’s healthcare bill.  And how much to increase primary care physician services?  Increase reimbursement to the point that primary doctors earn 80% of specialists’ incomes?  90%?  Equal?  Given the importance of primary care, maybe even more.

I don’t know what level of increased relative reimbursement for primary doctors would get the job done.  I propose an organic process:  freeze reimbursement for procedures that will close the gap until medical students start choosing primary care training in numbers that will populate primary care training programs to the point of what healthcare experts believe is an optimal ratio of primary care doctors to specialists.  This could take awhile, but the beginning of the fix could start tomorrow.


I suspect that a large part of the reason for the imbalance between compensation for primary care services as opposed to specialty services is the American tendency to value concrete data.  It is easy to quantify the value of, say, the removal of a diseased appendix, but much more difficult to reward an internist for a deft diagnosi of depression in a patient with multiple somatic complaints. The current payment system favors high cost procedures over time spent on evaluation or management of care.  A wise person once said that the most important things are the hardest to measure. 

*Private insurers generally pay more for healthcare services, but Medicare payments have a great influence on non-governmental insurance plan reimbursement, especially the relative reimbursement for different types of physicians.


  1. Doug S. says:

    Thanks Jim, for yet another carefully considered, thoroughly researched, compelling, and yet disturbing post. Like so many inequalities we face today, this primary care discrepancy looks mighty hard to solve.

  2. peter beatty says:

    An alternative reimbursement model might be that of the modern Hospitalist who is mostly salaried with some production incentives. Ideally there should be dollar incentives for committee memberships, lectures given, and publications.

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