Doctors feeling pinched

Responding to flat or falling salaries, doctors are raising fees, seeing more patients, and offering more profitable services, while trimming traditional services that patients may need, according to a new study.

Researchers at the Center for Studying Health System Change, a nonprofit organization based in Washington, D.C., gather data from 12 US healthcare markets, including Boston. Doctors' salaries fell 5 percent between 1995 and 1999, increasing slightly in 2000, the last year of the study, according to the center, which tracks physician income over time. The study accounted for inflation.

The situation is exacerbated in Massachusetts, where managed care insurance is more prevalent and can depress doctor salaries. Boston-area specialists, such as cardiologists and orthopedists, for example, earned on average about $166,000 in 1999, compared to $219,000 for US specialists, according to the center's most recent statistics.

As a result, doctors are aggressively searching for ways to make more money, according to the study, which was released yesterday and published in the March/April issue of the journal Health Affairs.

"There's just a real increase in entrepreneurial activity on the part of physicians," said Paul Ginsburg, center president. "Their feelings about their earnings may be a large part of it."

Physicians are using a variety of strategies to increase income. Some are buying diagnostic equipment and offering patients tests, such as bone densitometry and positron emission tomography or PET scans, in their offices instead of referring the patients to hospitals. While the study isn't claiming that doctors are ordering more tests than needed, it suggests that doctors are making more money by conducting tests themselves.

Other doctors are opening ambulatory surgery centers and enrolling patients in clinical trials for pharmaceutical companies to collect more fees. Still others are resorting to charging extra for services like filling out school forms and 24-hour telephone access.

Dr. Thomas Sullivan, president of the Massachusetts Medical Society, a physician professional organization, said the state's doctors have lagged behind their colleagues nationally in adopting new money-making strategies. But, he said, that's starting to change.

"The financial pressures have been enormous," he said. "And they're getting worse, because malpractice costs and office labor costs are going up. It's only reasonable that physicians try to make up lost income, as long as it's legal, has some benefit to patients, and is safe."

On the South Shore, Sullivan said, physicians have merged into groups of 40 to 70 doctors, allowing them to reduce overhead and offer ancillary services such as stress tests, nuclear cardiology, and magnetic resonance imaging, or MRIs. "These things do make a little money, and when doctors set them up in their offices, they're far more convenient for patients than having to go to the hospital," he added.

Researchers, however, cautioned that a downside exists -- both for the healthcare system and for patients. Physicians' business practices are contributing to the public's rising use of medical services and to growing costs. And doctors' focus on lucrative services means they're cutting back on poor-paying ones such as being on call for the emergency room, making it harder for patients to get care. Specifically, the study's authors noted that some doctors have stopped taking new patients on Medicare and Medicaid, the federal and state insurance programs for the elderly, disabled, and poor.

Policy makers may need to strengthen regulations that limit doctors in how they refer patients to facilities and services in which they have a financial interest, the authors suggested. "There's an inherent conflict of interest in them prescribing their own services," Ginsburg said. "There's some potential for over use."

Liz Kowalczyk can be reached at kowalczyk@globe.com.