Ask an Expert: Physician Pay with Edmund Becker

How much do doctors get paid by Medicare? The answer has major consequences for how care is delivered, patient wait times, and whether providers continue to accept Medicare at all. This is especially relevant since Medicare provides care for nearly 20% of America’s population.

When adjusted for inflation in practice costs, physicians in 2025 are being paid 33% less for care to Medicare patients than in 2001. Right now, policymakers and health organizations are calling for reforms to address rising costs and a growing disconnect between the work physicians do and how Medicare reimburses them.
In this interview, Edmund Becker, PhD, sociologist and professor of health policy and management, talks about current physician pay challenges and what it could mean for the future of patient care.

How does physician pay under Medicare affect access to care?

The biggest issue for Medicare is how to balance the volume of physician services with payment. In 2023, Medicare spent about $493 billion on services including outpatient physician services and outpatient hospital visits. This accounted for nearly half of all Medicare benefit spending, and about 25% of all national spending on physician and clinical services. 

Medicare tries to manage the rate of growth in physician total payments, which means that providers may need to see more patients to adjust for decreased revenue. For patients, this may lead to shorter appointments, less available appointments, and physician burnout.

Additionally, other payers like private insurance have different rates of payment. Because of this, some providers shun Medicaid and Medicare patients with lower reimbursement rates if they can get enough patients with "better" insurance. If Medicare payments don’t cover rising costs, providers—especially in rural or resource-limited areas—may reduce the number of Medicare patients they accept or stop accepting Medicare entirely.

What is the “Doc Fix” campaign, and why is it being challenged?

 “Doc Fix” is shorthand for attempted adjustments in legislation to improve how the federal government pays physicians who treat Medicare patients. After years of cuts, physician practices are concerned that the total payments for procedures and services have not kept up with the cost of practice, including the cost of inflation. The “doc fix” proposes to increase the Medicare conversion factor to reflect rising physician costs for all physicians based on Medicare’s measure of inflation. 

The fee-for-service model, which characterizes many Medicare physician payments, incentivizes providers to deliver more services, as their revenue is tied directly to the quantity of care provided. Critiques of this model suggest that it can incentivize unnecessary tests and procedures, and that it doesn’t reward providers for achieving positive patient outcomes or focusing on preventive measures. 

What are some alternative models that focus on quality of care that patients receive?

Our current system ties physician payments to the number of services provided, and this has led to growing concern among physicians, policymakers, and public health leaders about how to make Medicare financially sustainable while supporting high-quality patient care. Initially championed by Michael Porter, value-based care (VBC) and alternative payment models (APMs) are increasingly where the health care industry is headed. There’s a shift from focus on volume to quality and patient outcomes, rewarding providers for delivering efficient, high-quality care that leads to improved health and reduced costs. Some examples of these models include bundled payments, where a single payment covers all services for a specific episode of care; accountable care organizations; and capitation.

Unfortunately, despite efforts by insurance companies and other payers to move toward compensating physicians based on the quality and value of care they provide, most physicians employed in group practices owned by health systems are still paid primarily based on the volume of care they provide. Physicians in groups or health system practices often face internal incentives to maximize volume. 

What are some pros and cons of these newer approaches? 

There are several benefits to value-based care models, including improved patient outcomes, care coordination, cost savings, enhanced patient satisfaction, and reduced health disparities. But, while some evidence points to their effectiveness in these areas, there are also challenges with management, technology adoption, financial risk management, and patient engagement. They have a long way to go until they can be successfully implemented.

What’s the bottom line for patients and the public?

Medicare’s payment system is a complex issue that directly affects access to care. The challenge is effectively managing billions of services in a positive and constructive way for the patient, payer, provider, and society. If payment levels don’t keep pace with real-world costs, patients may face fewer providers who accept Medicare, longer wait times for appointments, and increased pressure on providers to “do more” in less time. Addressing this issue requires considering potential solutions including comprehensive Medicare payment reform, stabilizing physician pay to ensure that physician payments keep pace with inflation and rising practice costs, and incentivizing care in underserved areas.