HealthLeaders Media Finance - September 17, 2007 | Cost inflation: Are doctors the problem? View as a Webpage | Subscribe for Free
Cost inflation: Are doctors the problem?
Philip Betbeze, Senior Editor-Finance

Do American doctors make too much money? The difference in physician compensation between the U.S. and Europe is staggering, outweighing even the most frequently cited villain in healthcare cost inflation, prescription drugs, which cost 30 percent to 50 percent more in the U.S. than in Europe. Average salaries for physicians in the U.S. range between $200,000 and $300,000 a year, while European doctors are paid between $60,000 and $120,000 a year. Meanwhile, the disparity between what primary-care physicians earn and what specialists earn is growing ever larger. Is physician compensation the only reason healthcare cost inflation outgrew the economy for the umpteenth year running? No, but it's a big piece. [Read More]
  Sept. 17, 2007

Editor's Picks
UnitedHealth's merger malaise
Here's an interesting take on UnitedHealthcare's recent integration struggles and the ongoing brain drain from the once-bulletproof insurer. The article begins with a nice anecdote from one of United's clients who was dissatisfied enough to speak to a reporter on the record about their employees' problems with the insurer in the wake of its acquisition of PacifiCare. Given its contentious relationship with doctors and hospitals over its controversial pay-for-performance program, many in healthcare are shedding no tears for this player, that's for sure. United also faces regulatory scrutiny over its planned acquisition of Sierra Health, a major insurer in the west. [Read More]
Illinois to appeal ruling on hospital's tax exemption
Just when you think it's over--it's not over. Provena Covenant Hospital in Urbana, IL, which has become the unwilling poster child for what happens when a hospital loses its tax exemption, is facing an appeal by the Illinois Department of Revenue over a court decision that restored the hospital's property tax exemption. The hospital has paid more than $5 million in property taxes since 2002 in a dispute over how much free care the hospital provided. The hospital has become a flashpoint in the national debate over how much free care a nonprofit hospital must provide in return for its tax exemption. [Read More]
Healthcare premium increase lowest in eight years
But they're still rising faster than wages and inflation. The unsustainable beat goes on in healthcare, but there is reason for optimism. Rate increases are lower than they have been since 1999, but mainly because employers are changing their plans to shift more of the cost burden onto their employees. And since 2001, the cost of premiums has risen 78 percent, blowing away a 19 percent increase in wages and 17 percent jump in inflation over the same period of time, according to a survey by the Kaiser Family Foundation. [Read More]
Construction costs soaring at southern California hospital
Construction costs for the complex at County-University of Southern California Medical Center have spiraled to nearly $900 million. That adds $80 million to the original budget estimates, leading county supervisors to question the ballooning expenses. [Read More]
Finance Forum
Time For a Hill-Burton Approach to Health IT
Bruce McPherson, president and CEO of the Alliance for Advancing Nonprofit Health Care, argues that a Hill-Burton model for financing healthcare IT will provide a prodigious return in efficiency and quality for a very modest outlay. [Read More]
Finance Headlines
HCA to build medical center in Virginia
Washington Business Journal - September 17, 2007
County will spend $55 million on new Missouri hospital
Kansas City Business Journal - September 17, 2007
Mass. health reform means reimbursement cuts, say hospitals
Boston Globe - September 17, 2007
Another year of double-digit premium hikes in Massachusetts
Boston Globe - September 17, 2007
Cash-strapped Atlanta hospital could get $5 million
Atlanta Journal Constitution - September 17, 2007
BJC Healthcare CFO resigns
Boston Globe - September 17, 2007
Upcoming Events
HealthLeaders Media News - September 17, 2007
From HealthLeaders Magazine
EMR Pushback
HealthLeaders September 2007 Electronic medical record systems promise a long list of benefits, but most physician practices remain unconvinced. Can clinical IT proponents entice physicians to retire their paper charts for good? [Read More]
Money Talk

A look at one hospital's struggles to improve

Halifax Hospital Medical Center, Daytona Beach, FL

Rating: BBB+
Outlook: Positive
Affected Debt: $350 million
Agency: Standard & Poor's
Remarks: Outlook revised from stable based on continuing improvement in the system's financial profile, including sustained growth in operations and cash flow.
[Read More]
Audio Feature

The Voice for Healthcare Consumers: Regina Herzlinger, The Nancy R. McPherson professor of business administration chair at Harvard Business School, talks about the need to refocus the control of healthcare away from providers and shift it to consumers, and her admiration for a European health system that closely mirrors the vision she has for the United States.
A Meandering Road to Healthcare: Cheryl J. Harelstad, vice president of supply chain management and technology with Allina Hospitals & Clinics in Minneapolis, believes her experience in a variety of other industries helped prepare her for the sometimes arcane world of the healthcare supply chain.
Sponsor HealthLeaders Media Finance

Contact Lisa Brown, Director of Integrated Sales, at or call 781.639.1872.
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