Medicare data shows need to collect our own

From the President

Brett Coldiron

Dr. Coldiron served as the Academy's president until March 24, 2015.

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Like the rest of you, the first time I saw the data Medicare released in early April was the day it came out. None of us were afforded the opportunity to confirm the accuracy of the data — neither the top-line figures regarding how much Medicare paid under our unique identifiers, nor the underlying data regarding the various services we provided to earn those payments.

We didn’t get to explain the facts behind the data — the most important of which is that up to two-thirds of the payments to dermatologists are for office overhead. Most people, including other doctors, reading these numbers won’t “get it” that we provide our own outpatient treatment centers (at a cost about one-third to one-sixth of that provided by the hospital, by the way), and that the great majority of other specialists do not provide this. For example any surgeon operating in the hospital has all of his procedure overhead paid for, and if his fee is paid at $600 he keeps the $600. A dermatologist, working in the office, would keep about $200 of $600, with the rest going to practice expense.

One specific example is most telling. If you perform a skin biopsy in the office you receive around $102, but $74 of that is for practice expense, and the physician work is only $28. When the reporter asks you why the dermatologists in Germany only get paid $30 for a skin biopsy you can point out that since the Germans do it in the hospital setting, they are actually better paid than you!

This is a source of major misunderstanding of our specialty and gives rise to claims that we are overpaid and underworked. This misconception must be dispelled!

We could look up the Medicare data in one of the many tools news organizations built to help readers navigate it and understand what our own numbers meant. For instance, it’s natural that a dermatologist who sees a lot of skin cancer patients will bill for a lot of related procedures, and a dermatologist who employs non-physician clinicians and bills for them under his or her identifier will have higher billings because more patients are being treated.

But none of that nuance is apparent to anyone else. If you looked at data about any of your colleagues, you may well have had the same thought as some patients who looked up their doctors: “How do they make so much?” There may be a good answer! But without knowing it, the natural tendency is toward suspicion. That’s what makes the decision to release the data in this manner so troubling. It is most important that you not summarily condemn your colleagues who may have unique practice arrangements.[pagebreak]

There are two ways to deal with this data release. In the short term, we’ve been responding to media inquiries. We’ve pointed out that:

  • The release of this data could compromise physician and patient privacy.
  • The data don’t address the existence of various practice arrangements, such as the hiring of non-physician clinicians, that can make some doctors look like outliers when they aren’t.
  • The data release paints an incomplete picture of the care provided because it tells nothing about the conditions being treated. With no diagnosis codes, much less information about disease severity, how can the data be meaningful?

We’ve also emphasized the specialty’s collective efforts to be good stewards of health care resources. This is when our participation in the Choosing Wisely program last year (see and our ongoing development of evidence-based guidelines and appropriate use criteria (see serve us well in the public eye.

Fortunately, discussion of this data seems to have abated for now. I suspect it will be back in the future, over and over again. If you get a media request related to it  — or any media request related to dermatology — you should take these three steps:

  1. Ask about the nature of the interview (What does the reporter want to know? Get their specific questions if possible),
  2. Request to revisit the conversation at a later time (set a time so the reporter knows when he/she can expect a response), and
  3. Contact Melanie Tolley Hall and the AAD communications department for assistance (

That’s the short-term way to deal with this data release. In the long run, there’s nothing that answers data like more and better data. To that end, to address the specialty’s need for data to demonstrate its value to payers and the government and to make it easier for members to participate in quality reporting programs that will help them avoid financial penalties, the Academy’s Board of Directors has committed to developing a data registry.

We are not the first specialty society to go down this road, and we’re getting good advice from our colleagues in other fields about the best way to proceed. We’re also hearing rave reviews from users in other specialties, who enjoy the ease with which their societies’ registries collect their data, help them report to Medicare and others, and provide them with information against which they can benchmark themselves — all while preserving both their privacy and that of their patients. We will strive to achieve the same things as we move this project forward; expect to hear a lot more about it in the months and years to come. For now, know that we are moving forward with this, and that someday, in the not-too-distant future, when Medicare releases data that paints an incomplete picture of our profession, we will have data of our own to paint the rest.