Feature Article

Overworked or Underpaid?

By John Toton, MD

As an orthopaedic intern at Oakland’s Highland Hospital in the 1960s, I met Dr. Jim Johnston, who had established himself at Kaiser Oakland as an orthopaedic pathologist with national credentials. He taught UC San Francisco residents pathology, and his teaching slides were exceptional; I brought his collection with me to residency in Philadelphia.

After residency, I spent two years fulfilling my military duties in Okinawa, Japan. The setting was so remote that I lost most of my contacts with California orthopaedic groups, and going it alone seemed impossible. But then I remembered Jim, who became the local contact for my post-military job search. I figured if Kaiser employed doctors of such caliber, I should check it out.

An interview followed at Kaiser San Francisco, where there was an “opening.” It wasn’t exactly an interview; the physician-in-chief talked at me about Kaiser’s history and practice opportunities for more than an hour. I left with an application form and the experience of saying no more than 10 words. I doubt he even knew who I was.

The next contact, four months later, was a phone call letting me know I had a full load of patients scheduled for next Monday! I didn’t even know I had been hired; that was how Kaiser took you on board 30 years ago.

In those days, Kaiser was a gold mine of opportunity, but not of the financial kind. My general-practitioner father was appalled at the starting salary for a surgeon. Raises, and partnership, did come with time; but my income never kept up with private practice in that “golden age” of medicine.

Professionally, Kaiser offered extraordinary opportunities to develop special interests and to fill medical and administrative needs at both local and regional levels. My residency in spinal surgery led to a collaborative Spine Reconstruction practice for Kaiser’s entire Northern California region. An active teaching role challenged me as well. I still can’t figure out why I got tapped to be the medical-legal liaison between doctors and lawyers—possibly because I helped organize a hospital basketball league? But then again, there were (and still are) few or no barriers between doctors and employees at Kaiser, nor between specialists and primary care physicians.

Serving on regional committees and boards followed. But then a move to San Rafael, just as the Santa Rosa operation was about to “bud off,” returned me to full-time orthopaedic surgery.

The practice of medicine at Kaiser has always been associative. Not too long ago, before Kaiser grew, before budgets were strictly enforced, every doctor knew every other doctor in his or her specialty in the other facilities and knew many other members of the larger Permanente group as well. It is a shame that today, very few doctors seem to have that regional perspective, except in their specific referral areas.

By a wide margin, Kaiser met most, if not all, of my professional and personal goals. When you are off, at Kaiser, you are OFF. When you are at work, you are “fully busy at work,” with no shortage of challenging and stimulating patients to see. You may be tired, but you are never bored.

And then, quite unexpectedly, probably because the stock market was hot and medical dues were flat, Kaiser offered me an early-retirement package that was too good to turn down. I suspect they wanted the top salaries to move on and to hire younger and cheaper doctors. I was not insulted: although I always felt I was a valued member of the group, I recognized early on that Kaiser is a business and I was an employee.

I was not compelled to take advantage of the retirement package, but I wanted to see what was on the “other side,” so I went into private practice. It has been and continues to be a learning experience!

With savings and cash from unused sick leave and vacation pay, I opened a “second opinion” office in a Santa Rosa business park. The idea was, “Bring yourself, your X-rays, your records. Pay me for the time we spend together, with the premise that I will not do the surgery, only offer advice.” My charges were based on exactly what Triple-A charged for an auto diagnostic ($65 per half-hour). A few people came from ads I placed in local and throw-away newspapers, but I got no referrals from local doctors. Most people wanted insurance to pay for their visit; they had no concept of paying out-of-pocket for a service. The practice covered the rent but nothing more.

Then an old Kaiser associate, Tom Miles, invited me to join his private
orthopaedic practice in Healdsburg. He asked only one question: “Are you bored with retirement yet?”

Tom was leaving town (he’s since returned), so I could fill a need, with a promise that I would jump into a world of good people, good loyal referral doctors, a stable insurer (HPR), secure physician groups (SPA and HMG), and a thriving hospital and medical community. In June 1999, it was all true, but SPA, HMG, and HPR soon bit the dust. Healdsburg Hospital lost its ICU, OB, second operating room, and after-hours surgery. Some physicians left, and practice referral patterns changed. Yet, quite a few patients and doctors stuck out the turmoil, including me.

How is private practice different from Kaiser? First a disclaimer: my Kaiser experience is now six years old and my private-practice experience is six years new. Before 1999, the Kaiser slogan was “good people, good medicine,” and our mind-set was to offer “good medicine” at an affordable cost. Kaiser dues were usually near the bottom of medical insurance premiums. We were part of a culture born in the pre- and post-World War II unions; we were the working man’s health plan, fulfilling a 1960s dream of a “better world.” Our doctors were accused of being socialists, and acceptance in medical societies was hard to obtain.

As time passed, with medical costs and private-practice earnings growing, recruiting physicians was next to impossible. Kaiser could no longer live with a doctor shortfall, nor with telling its members, “We are not for everybody, and you don’t have to choose us.” The situation is much different now. Kaiser has a sense of leadership on the national scene. It takes pride in setting and meeting high standards of care. It is no longer the cheapest, but it still provides the most comprehensive care for each premium dollar.

Kaiser doctors say they’re overworked; private-practice doctors say they’re underpaid. To some degree, both statements are true. Kaiser doctors have a full schedule, and their computerized appointment system will, predictably, fill that “cancelled” appointment with the most needy and time-demanding patient possible. Meanwhile, private-practice doctors have seen their office costs grow out of control, while HMOs and PPOs continually grind down their reimbursement. One Kaiser doctor I know says he was both overworked and underpaid in private practice, so joining Kaiser eliminated one of those problems, and he can live with that.

Control of one’s office, schedule, employee mix, and practice style can be quite important. Private practice has the edge here: at Kaiser, you are an employee, not the owner. Although many physicians in private practice find office supervision a burden, I appreciate the authority to make schedule changes; to decide how much time to spend with a patient, without three or more getting backed up; and to have a supportive staff that thinks it’s important to make my day workable.

For the surgeon, Kaiser has the best operating-room equipment. I suspect this is true in every other area as well. Lab results, X-rays, and patient information have been computer-accessible in each exam room for years, and Kaiser is going digital faster than any other medical entity in the state.

The quality and skill of physicians and nurses in both worlds seem to be equal, and support staff seem equally satisfied or frustrated. One significant difference is that Kaiser physicians are salaried and have limited ability to influence that salary. In private practice, doctors can still determine their worth by work effort, special experience, and business acumen. That being said, Kaiser’s starting salaries are now so competitive with private practice that they are attracting many of the best-trained young doctors away from the private world.

For patients, I can offer more personalized service in private practice, but I know the quality is no different; it’s just that I am not as rushed as I was before. I find the more leisurely pace a real value … mostly to me.

Patients get tests, X-rays, and MRIs more easily at Kaiser than in my practice. My staff needs to spend hours securing authorizations before anything nonemergent can be done. On the other hand, I will likely see patients and schedule surgeries sooner (when authorized). Also my staff will be (in my opinion), more attentive to patients’ questions and needs; their messages do not go through a message center.

Both practice styles have their merits, and the playing field continues to change. Kaiser is becoming more “private-like,” and certainly the world of private practice is being overrun with what is euphemistically called the “alphabet soup” of HMOs and PPOs. Can the Hillary Plan be far behind?

Dr. Toton, a Healdsburg orthopaedic surgeon, used to work for Kaiser Permanente.

Sonoma Medicine, Volume 56, Number 2 (Spring 2005).