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Readable book on medical economics?

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  • Avatar Strider_91 
    Participant
    Status: Student
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    Joined: 05/05/2017

    Does anybody have a book they can recommend on medical economics that is written in such a way where it doesn’t feel like I am reading a text book?

    I am specifically curious about why some specialties tend to make more money than others. For example, why does ortho (in general) make more money than urology or ent?

    Why does pediatrics everything pay less than it’s non pediatric counterpart?

    I would also be interested in the economics of hospitals, surgery centers, how insurance companies set their prices etc.

    #220551 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3567
    Joined: 01/14/2017

    Understanding salary is a simple function of Porter’s 5 Forces as well as the payments determined by the FFS model.  Every specialty has an average steady state – see X patients at level Y visits, do A surgeries as an average of B RVUs.  That is what I mean by the payments determined by the FFS model.

    Regarding the economics of hospitals, surgery centers, pricing, etc. that’s a gigantic can of worms you’re opening up.  There are some hospital finance books you can find on Amazon – you might find it worthwhile to look at the curriculum and suggested reading for some prominent MHA degrees.  They’ll almost assuredly touch on some of this.  Next, you will have to read the different final rules that CMS puts out to really understand the payment systems.  They’re only about 1000 pages each.  And regarding the insurance world you’ll have to learn about various ratios, underwriting, and state and federal regulations that affect their bottom line.  Reading over United’s 10k might also be a good start.

    And if that all wasn’t enough you might have time to focus on your studies.  😉

    #220558 Reply
    Avatar pulmdoc 
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    Status: Physician
    Posts: 434
    Joined: 09/19/2016

    Pediatric subspecialties have 2 sources of downward financial pressure; one is that the job market tends to cluster at academic centers where pay is less, and the second is that chronically ill children who need peds pulm, GI etc are disproportionately on Medicaid.

    There is far more intra-speciality pay variation than one might expect; even throwing out ultra-low paying academic/VA jobs you may see 3-5x difference in pay for the same specialty depending on location, volume, payor mix, practice efficiency, etc. This matters far more than specialty.

    #220575 Reply
    Avatar Tim 
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    Status: Accountant
    Posts: 3275
    Joined: 09/18/2018

    Both of the above gave some factors.
    Supply (physicians) and demand (patients) different in some aspects. 1) pediatric tend to be healthier than adults 2) the illnesses are rarely elective 3) The patient stream for many specialties tend to require association with a pediatric hospital . 4) Less opportunity for specialists have a sufficient volume without working for a healthcare system or hospital. 5) Can you think of a specialist that would work in PP? Take ortho, would it be with a pediatric group or an ortho group? 6) Few opportunities for ASC’s and ancillary opportunities.

    Quite honestly, the economics conceptually are supply and demand.

    5.1 Price Elasticity of Demand and Price Elasticity of Supply

    Quite a few moving pieces, good luck with med school.

    #220631 Reply
    Avatar jlwindor 
    Participant
    Status: Physician
    Posts: 1
    Joined: 06/10/2019

    You might check out “An American Sickness” by Elisabeth Rosenthal. It is a pretty good book that goes over medical economics. I found it to be an easy read.

    #220745 Reply

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