How much money do journal publishers make A lot

Many, including me, have written about who is making money in healthcare. Sure doctors do very well, but not as well as hospitals, hospital administrators, insurance companies and their corporate officers, drug companies, device manufacturers, and others.

Another lucrative area is medical journal publication, especially if you are the publisher. A researcher gets an idea, plans and carries out a study, writes a manuscript, and submits it to a journal. The research may have been funded by the government, i.e., you and me.

An associate editor or a member of the journals editorial board looks at the manuscript, and if it is deemed worthy, it is sent out to two or more people in the same field for peer review. This process may be repeated for papers that require revision.

All of the players in the above scenario—the researchers, most of the editorial board members except maybe the editor, and the peer reviewers—are paid nothing for their work. Factor in that the cost of producing a journal has plummeted in the computer era.

How much money do journal publishers make? Here are some impressive numbers from an article that appeared on a French website called "Rue89." The figures are for the year 2011 and are in euros. They include revenue from all science publishing, not just medicine.



As you can see profit margins range from 32% to nearly 42%. Elseviers profit of over €878 million converts to just over $1 billion.

To put that into perspective, the most recent figures for Apple Inc., arguably the most successful company in the world currently, show a profit margin of 20%.

The Rue89 piece was written as an exposé about the French governments having to pay Elsevier $172 million in subscription fees to access information generated by scientists who were funded by that same government.

But the French have nothing on us.

In his presidential address to the American Surgical Association, Dr. Layton F. Rikkers, editor emeritus of the Annals of Surgery said:

Nearly $10 billion is spent annually by [US] universities and governmental agencies for access to research findings that their scientists and clinicians give to publishers for free, that their faculty peer review for the alleged honor of doing so, and that are funded by taxpayer dollars and charitable trusts. It is unclear why library budgets continue to increase above the rate of inflation when nearly all the journals they now receive are delivered electronically in large packages from the few remaining consolidated publishing houses. Examples are Wolters Kluwers Ovid and Elsevier’s Science Direct each of which contain hundreds of journal titles. Some individual journals not available within these large collections, such as Brain Research, can cost libraries more than $20,000 annually.

There are more than 9000 open access journals, and 3.5 new ones per day are setting up shop. Instead of charging for subscriptions, open access journals are free to the reader, but the authors must pay "processing costs." Many of these publications have exorbitant fees with little or no true peer review.

Before submitting any paper to an open access journal, authors should be sure they understand the fee structure and check Bealls list of predatory publishers, which has recently been updated and expanded.

Dr. Rikkers feels as I do that print journals will gradually disappear. Post-publication peer review is already gaining momentum through blogs and sites such as PubMed Commons and PubPeer. Even major journals like the BMJ have established rapid response systems for immediate feedback to authors.

The heady days of 40% profit margins may soon be over, but for now big bucks are being made.

More about journals:

How are journal articles peer-reviewed?
How journal articles are peer-reviewed: Part 2
Journals, Open Access Journals and More Journals
What you need to know about some open access journals

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Medicare is changing the way it pays surgeons

Starting in 2017, Medicare will end global payments for operations. The current payment scheme combines preoperative, operative, and postoperative care into one fee. When the change occurs, each of those events will have to be billed separately—otherwise known as “unbundling.”

I missed this news when it first appeared late last year and thank one of my blog followers who calls himself Artiger for bringing it to my attention. An Advisory Board piece summarized the situation.

After analyzing a number of claims, Medicare came to the conclusion that it was paying for duplicate services. What a revelation! I could have told them that without a claims analysis.

For many years, certain surgical specialists have been delegating preoperative evaluations for “medical clearance” and postoperative management of everything but the incision to internists and hospitalists. Since the global fee was meant to include pre-and postop care, Medicare was indeed paying twice for the same service.

Representatives of the American College of Surgeons expressed concern that sicker patients would need more in-hospital postoperative visits thereby incurring more bills. [If they receive more care, maybe they should pay more.] They also worried that since postoperative care was covered under the global fee, patients might forgo office visits after surgery because of increased costs.

The unbundling of the global fee may have other unintended consequences. Since preoperative and postoperative care reimbursement will be separated from the fee for the operation itself, surgeons will be paid less for performing surgery.

Most surgeons would rather operate than make rounds and may look to perform more surgery to make up for the loss of income. This could end up costing Medicare more money.

With global payments, there is no incentive for a surgeon to keep a patient in the hospital longer than absolutely necessary. When the payment method changes, the exact opposite will exist. And surgeons who aren’t very busy might schedule more postoperative office visits to make up the difference caused by the reduction in the surgical fee.

This might all become moot anyway because Health and Human Services Secretary Sylvia Matthews Burwell has proposed that 30% of Medicare payments be converted to a non-fee-for-service model by the end of next year rising to 50% by the end of 2018.

According to a news@JAMA article, doctors may be given incentives to join Accountable Care Organizations. Quality indicators such as readmissions and infections currently applied to hospital fees might be imposed on doctors too. More bundled payments for acute care illnesses may be created. [This of course is the exact opposite of the plan to unbundle global surgery fees. Im getting confused].

One thing Im sure of is that none of this is making me regret that I retired.

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