How much doctors are paid by Medicare?

For the first time in its almost 50-year history, the government has released detailed data about how much doctors are paid by Medicare and what procedures doctors performed. The data only cover Medicare Part B for the year 2012. It includes payment for doctor’s office visits, lab and procedures (such as x-rays and chemotherapy treatments) and does not include payments for hospital visits, prescription drugs, or private insurance. You may find details in The New York Times and Washington Post.

Here are the major points:

  • Data include $77 billions in Medicare payments to over 880,000 doctors.
  • Medicare paid doctors $64 billion in 2012. The rest of the money ($13 billion) was paid to commercial entities, such as clinical laboratories and ambulance services.
  • Only a quarter of doctors are responsible for the three-quarters of spending
  • About 2% of doctors are responsible for $15 billions in Medicare payments (about one quarter of the total)
  • Medicare paid $12 billion for 214 million office and outpatient visits, most of them between 15 and 25 minutes long. The practitioners (doctors and nurse practitioners) were paid an average $57 a visit,

Nearly 4,000 physicians were paid over $ 1 million from Medicare in 2012.But it is actually not the salary information. Medicare reimbursements do not go straight to the doctors. They must be split among other physicians, nurses and specialized support, and, in addition, cover actual drugs and medical devices. Then it is not surprising that, according to The Washington Post analysis, only 23 of 4,000 Medicare millionaires are likely to actually keep at least $1 million.

Here is how $64 billions paid by Medicare to doctors were actually used:

  • Office Overhead: 43%
  • Doctor Compensation: 41%
  • Drugs and Other Costs: 13%
  • Malpractice Premiums: 3%

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