Legally Mandated MD-Supervision of Non-physician Practitioners: a costly, unethical & unfair medical monopoly

by faithgibson on November 18, 2012

in Contemporary Childbirth Politics, Economic Issue$

Mandatory supervision of midwives and other ‘physician-extender’ categories as a strategy for supervising physicians to ‘pump up’ their ‘bottom line’

This is the first in a series of articles documenting the historical background and current economic impact of a legalized monopoly by physicians over the professional services of non-physician primary care practitioners (nurse practitioners, nurse anesthetists, and professional midwives of all backgrounds) and how a legal situation created unilaterally by organized medicine has been turned into a profit-center for doctors at the expense of patients and professional healthcare providers


On Oct 25, 2012 Medscape posted five articles for physicians on how to increase revenue from their medical practice. Medscape is a website for physicians that provides professional information and continuing medical education (CMEs) on-line for MDs, nurse-practitioners, professional midwives and physician assistants.

These articles emphasized that a doctor’s office is first and foremost a business and has to be run as a business in order to be profitable for its physician-owner. Each author had specific suggestions for increasing economic efficiency and getting a better return on the physician’s time and talents. To further save time for doctors, most authors suggested hiring the professional services of a business manager.

We all want doctors to earn an income commiserate with their lengthy (and costly) education and the extraordinary demands of the job. After all, access to their life and limb-saving services requires the ability to pay their bills and be satisfied with their working conditions.

But the healthcare in America also must meet the needs of patients by providing access to an effective and affordable system. Above all, it must not be a systemically rigged game that fails to provide needed care or unnecessarily burdens society with debt.

The advice of these Medscape authors highlighted a stark difference between the medical profession’s perspective and that of the public. A very trivial example was emphasizing the importance of keeping one’s patients/customers happy as a way to increase repeat business and referrals. It was a bit disconcerting to read this, but I understand that a sufficient number of paying ‘customers’ is required to keep the doors to the doctor’s office open. However, these Medscape articles also discussed how long (90 days) to let a customer/patient receive medical care before being discharged for non-payment of the physician’s professional fees.

But the issues of style mentioned above are insignificant compared to remarks in an article titled: “Ways to pump up your bottom-line”. This article provided information about physician-supervision laws in combination with third-party reimbursement policies that has disturbing ethical and legal implications.

One of the identified strategies to “pump up” a medical practice’s profitability was to take advantage of a legal situation engineered by organized medicine that benefits medical doctors at the expense of patients and of a category that organized medicine calls “physician-extenders” and physicians more generally refer to as ‘mid-levels’ — nurse practitioners, midwives and physician assistants. The article states:

“When they [mid-levels] are under direct supervision by a physician, midlevels command the same Medicare reimbursement as physicians.”

Decades ago organized medicine used its overwhelming political influence to get laws passed in state legislatures that would prohibit non-physician primary care practitioners, such as nurse practitioners and professional midwives, from providing direct patient care. Under these laws, the category of mid-levels/physician extenders cannot provide care as independent professionals (be self-employed or independently contract their services) but instead must practice under physician supervision, which is to say, as employees being paid an hour wage or salary by a doctor, hospital or clinic.

After creating this legal monopoly, organized medicine went back to state and federal legislators to get reimbursement laws passed that permit doctors to bill at MD rates for primary care provided by non-physicians under their supervision.

This increased reimbursement is not passed on in the hourly wage or salary to the professional who actually provides the care, but instead is treated by law as a rightful source of profit for the physician-employer. In other words, this is a legalized system that directly and personally reimburses the physician for professional services that the doctor did not directly or personally provide.

An official report by the Medical Board of California’s “Health Policy and Resources Task Force” put it this way:

… the hiring of additional allied health care professionals has not really done anything to benefit patients. … the concept in principle is that allied health professionals can provide additional access to health care…

However, the manner in which they are being hired and used ….. they are really only serving to increase the income of physicians.

Although physicians are hiring more Physician Assistants and Nurse Practitioners, and often patients never see the physician, the patients are charged the same amount for an office visit. This is income for the physician but there is no cost-savings to the patient.

(MBC, Status Report, Dr. del Junco, October 5, 1993)

Here are additional excerpts from the Medscape article “Ways to Pump Up Your Bottom-line” that promote this billing practice as an additional source of physician income under the Affordable Care Act:

“With more covered patients seeking doctors and the threat of declining reimbursements in the long term, doctors are under pressure to see more patients.

Hiring midlevel providers, mainly nurse practitioners and physician assistants, is a good way to increase efficiency. And because midlevels are paid less than physicians, they can spend more time with patients. They can deal with less complex cases and give patients unhurried, personal attention …

When they are under direct supervision by a physician, midlevels command the same Medicare reimbursement as physicians.

Bringing a new midlevel into the practice should be coordinated with a marketing campaign”

Think about that for a moment: NPs, PAs, and midwives are by virtue of their professional education and scope of practice trained to independently provide primary care in clinics, healthcare facilities, medical offices and patient homes. These professional disciplines prepare their graduates to practice independently within their scope of practice in non-acute settings.

Their educational training prepares them to recognize seriously or acutely-ill patients and their standards of care require them to refer these patients to the care of physicians or to emergency hospital services. The independent care of these professionals is a part of a public health strategy in the US (a country that does not provide universal access to medical services) to provide health and certain types of medical services to the poor and in “underserved” or rural areas.

As noted in the Medscape article, non-physician providers/mid-levels are specifically prepared to give “unhurried, personal attention”, which is both rare and a uniquely therapeutic commodity in today’s healthcare system. For MDs, providing health education and other services that help prevent debilitating diseases and reduce the harm from chronic conditions is both time-consuming for the healthcare professional and does not pay well. The reimbursement rate for preventative healthcare is only $75 to $150 for an hour of the physician’s time spent talking, teaching and listening to a patient.

This is in stark contrast to performing medical, surgical and diagnostic procedures, which pay very well indeed. Many procedures take only a few minutes of the physician’s time to perform and yet have a reimbursement rate of $1,500 or more. Such procedures are frequently scheduled at five or ten minutes intervals, which makes prodecure-based care orders-of-magnitude more profitable than mere ‘talking’.

For example, eight procedures performed per hour (7 minutes per patient) would generate an hourly revenue stream of $12,000. After 10 or 15 years in medical school to become an expert in drugs, medical treatments, diagnostic technology and surgical procedures, why would any MD choose instead to provide “unhurried personal attention” to help preserve the health of the already healthy, or spend time teaching patients with chronic conditions to better manage their lifestyle — all for a lousy 75 bucks for that same expenditure of his or her time?

True HEALTH care — one-on-one therapeutic relationships with a professional that helps people preserve and improve their health status, prevent disease and/or stabilize chronic conditions — is the most effective way to reduce suffering and lower healthcare costs for preventable but expensive conditions such as obesity, type II diabetes and hypertension. It is also the best and most cost-effective way to provide maternity care to healthy women with normal pregnancies.

The ability to provide unhurried time and individual attention is the difference between ‘sickness care’ (our current, super expensive system) and health care that is truly devoted to health and is genuinely caring. Did I mention that true health care is also a crucial aspect of an affordable healthcare system, both long and short-term?

However, organized medicine groups — the AMA in particular — long ago pushed through laws in the majority of states (28) making it illegal for non-physician practitioners to do what they were trained for. This slight-of-hand puts ‘mid-level’ professionals in a special category of ‘diminished capacity’ that organized medicine conveniently dismisses as “physician-extenders”. This forces non-physician providers into a parasitic relationship, in which medical doctors hire other professional practitioners to to provide primary patient care, then the physician’s office bills at MD rates for services the MD did not provide.

This also means that thousands of educated and capable healthcare providers cannot lawfully provide any direct healthcare service whenever and wherever MDs are not interested or willing to provide the mandatory supervision. Its useful to note again that this legal situation that was created unilaterally by organized medicine over the objections of non-physician practitioners. As a result of these indentured servitude laws, non-physician practitioners are either shut out of their own professions (or forced to work for hourly wages), while people who need their ‘unhurried and personal’ care are often left out in the cold.

The other aspect of this slight-of-hand is that patients (or their insurance companies, Medicare, Medicaid, etc.) are paying the same rates they would to be seen by the physician. This additional revenue is then pocketed by the doctor as profit to himself, instead of being passed on to the practitioner who actually provided the service.


Organized medicine baked an unfair advantage into the economic cake by inventing a legally-defined reimbursement structure that obliged state and federal government programs and insurance companies to pay MD prices for non-MD care. This lets doctors be paid for care provided by professionals other than themselves, a unilaterally-mandated situation based on the non-consensual employment of non-MD primary care practitioners. This situation amounts to indentured servitude, as these same non-physician providers are not permitted by law to simply provide exactly these same services as self-employed professionals — independent agents who are fairly and honestly compensated for their profession time and talents .

Next in this series:

Link to: The Indisputable MATH –> the four letter word that explains the money-end of this exploitive situation, and what these dubious billing practices mean for patients and taxpayers

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