Edwin Leap tries to tackle this controversial question.
Remember, any answer needs to take into account the following factors:
i) American medical school debt
ii) malpractice insurance
iii) higher salaries of other professions in the United States relative to other countries
Related posts:
- Are doctors are hurt financially by single-payer health care?
- School debt influences the career choice of medical students
- Should we pay American doctors less money?
- Medical students avoiding primary care, is it more than money?
- What is responsible for high health care costs?
- NP instead of an MD?
- Why do health policy experts and wonks hate doctors?
KevinMD.com on Facebook
{ 20 comments }
So why are we even asking this question? As long as we wish to have all labor markets be supply and demand driven, then the answer is they should make as much as they can, just like any one else in any other job.
The answer is easy. They should make what the market bears after the existing provider preferential supply side restrictions have been dismantled. This means removal of the hooks of the CME the medical school system, allowing a decoupling between research institutions and medical schools, allowing for profit medical schools, an allowance for the increased scope of practice for mid-level providers,etc. The first two points are not justifications for high after-expense compensation rates. One could be an underwater basket weaving major at a private school and up with $120K in debt. A justification for high after expense compensation rates? No. The second is a part of the cost of doing business. The truck driver doesn’t get a higher salary when the cost of fuel or insurance goes up. I don’t think clinicians want to look to other countries as a model but if they do we can scale provider salaries accordingly… I don’t think too many providers will be going for that.
I don’t think that it should be up to centralized planners to decide what physicians should make. That is a discussion for a soviet state.
We should set our charges. I do not, however, think that the sole consideration should be “what the market will bear” or “as much as they can”. We run businesses but do so as professionals–people who profess an ethic that puts some things above our own self-interest. We are seeing people when they are sick and vulnerable and should not take advantage of that vulnerability by predatory exploitation financial or otherwise.
We should look at what other professionals charge and use that as a starting point, with reasonable consideration of educational time, expenses etc. That is not a science but reasonable approximations can be produced: Hourly rates somewhat above that of non-medical professionals and moderately higher than that of dentists–highly skilled profesionals who don’t have the grueling residency–is about right. To strive for the exorbitant rates of the more predatory high-dollar lawyers in the city would be out of line.
If we charge substantially below the values arrived at, we are undermining the overall availability of care in the long-run by making it unremunerative for our less ascetic colleages to enter our particular specialty as well as creating doctor-patient relationship problems by devaluing ourselves. If we charge substantially over that, we are undermining trust in the profession by demonstating predatory exploitation of the sick, also undermining doctor-patient relatinships and interfering with our mission of healing.
There is a right fee that optimizes the doctor-patient relationship and promotes our mission both with the individual patient and of our profession with patients into the future. Only physicians have the understanding of the doctor-patient relationship needed to set that and he should be in control of that process. He should also, for optimal practice, be able to vary the fee for different patients accordingly.
Criminallopath:
I don’t mind critical analysis, but many of your analogies are false.
A student graduating with 120k debt from college will pick the highest paying job possible to pay off that debt, unless their parents have already decided to gift that education. The debt itself is not a justification for that major choice, but if you take away the ability to pay for that loan, you will also take away the incentive for people to enter the field. It happens all the time with graduating lawyers choosing corporate paychecks over, say, immigration law.
Second, for-profit medical schools do exist. They are exclusively osteopathic (but a minority). Given that osteopaths tend to stay in primary care, you should already have seen the burden on primary care decrease. It has not.
Finally, the truck driver doesn’t get higher wages because of higher gas prices, but you’ve still got it wrong. In most companies, gas is charged to the corporate credit card. You can bet that the trucker’s boss is charging higher costs to the truck recipients: witness the air fuel surcharges of recent years, or talk to any small business owner who uses rigs.
As a patient, I have to have the salary of my doctor high enough that he will return my calls, want to come in after hours, and treat me nicely, instead of a nuisance. I want him to make more for doing more for me, and not have it come out of his pocket, every time I have a complaint. If you pay low wages, the docs of England leave at 5 PM. The waiting time for emergency surgery is 6 days. They have to import terror docs from terror countries to take the low fees. Commie Care is cheap care. Commie Care killed Princess Diana. She would have survived the injury to her aorta in the worst slums of the US.
By my doc’s higher fees, she saved my life. She thereby returned 10,000%/year of her fee to the economy, year after year, guaranteed, with no risk of loss, for the rest of my working life.
Criminalopath should apply his proposals to the criminal cult enterprise that is the land pirate profession. Tell us how it works out. Those with filthy hands should not point any finger.
“The truck driver doesn’t get a higher salary when the cost of fuel or insurance goes up.”
For a truck company or independent truck driver, the supply curve shifts with rising fuel. Reimbursement will go up, especially if the demand for his services is inelastic.
At some point, physicians are going to realize that nurses make a lot of money for the work they do/training commitment.
Some docs are going to start pushing for an increased scope of practice so they can be hired on to do nurse work. I can hear the nurses hollering to maintain scope of practice.
Regarding #1: The problem of extreme high cost for higher education is an epidemic affecting not only medical students but all students. Tuition is rising much, much faster than inflation and many colleges and universities also have burgeoning endowments that they refuse to tap.
I know a young lawyer with a $100,000 debt from law school and a DMA (Music) with a $70,000 debt despite having a TA and tuition assistance. It is not uncommon for a new BA (from a public institution) to have $30,000 or more of debt!
Regarding #2: I agree that malpractice rates are way too high but until the medical profession starts policing itself, I don’t see that this problem will be corrected. (Remember the recent study that found that almost 50% of physicians would not report a colleague’s error?)
At present, a patient who is wronged has no other choice but to sue.
Perhaps with good policing and physicians forming their own insurance pools, rates would become more reasonable. It is a shame that good doctors are leaving the profession because of the expense of insurance!
Regarding #3: While I do not begrudge a physician a good living, physician compensation is still pretty high. Recent news stories reported that average primary care doctors earned around $150,000 which is higher than the salaries of many people of similar education levels.
Don’t know what the answer is, but I do know that our economy cannot continue to sustain the yearly increases in the cost of medical care.
The wages of many jobs are not determined solely on the basis of the free market.
I don’t think that medicine is not an entrepreneurial activity, but it is moving away from that.
Unlike the truck driver, most docs in my neighborhood have reimbursements capped by CMS or HMO’s (which are worse, fixing theirs to a percentage of Medicare.) While the truckers pass along their increased costs, the docs I know can’t. It’s not an attractive business model.
Certainly physician pay is a critical issue as we move closer to a government-controlled system. The anti-doctors secretly (or not so secretly) hope that such a system can be used to reduce physician salaries which they deem are excessive.
But the fact of the matter is that single-payer governments of Canada and Britain have had to significantly increase salaries, especially to specialists. I personally know a neurosurgeon in Windsor, Ontario, making $450,000 Canadian, which is nearly 500K USD at recent exchange rates. The government doesn’t advertise that!
Junior house officers (equal to residents) in the UK make 60-70K Pound/year. This is equivalent to a 6 figure salary in the US for a resident!
Even single-payer governments have to deal with the reality of supply and demand- especially as the economy becomes more global. When looked at in terms of the dollar value and actual hours worked, docs the US don’t really earn more in purchasing power than their European or Canadian counterparts.
Criminallopath, you need a serious reality check – there is a severe global shortage of docs and an ever increasing demand for services. Your ignorance of economics even surpasses your ignorance of medicine.
How much should United Healthcare’s CEO make for denying care?
The right fee for a service is the fee that will motivate you to want to do it and do a good job, but not be so happy to do it that you will feel a strong bias towards recommending it. It is a good thing for physicians to make enough that they feel priveleged to be in the role and value the position, prestige, and lifestyle enough to work hard at maintaining it and defending it. The interests of patients are served if physicians are secure enough in earning a solidly respectable lifestyle that they can tell all those who wish to compromise their ethics for profit to go to hell. The public interest is served having physicians with the financial flexibility to live below their means so that they aren’t pressured to sell out. It is natural that people who attained their position by extensive education would want to be able to afford to provide the same for their children, and if we want doctors to exercise independent judgement not subject to corporate bosses, they need to be able to earn enough to provide for their own retirements.
I think on balance, the current earnings of most physicians pretty much meet those criteria. Some fields, like peds, are suppressed by the presence of an inordinate number of docs who don’t adequately defend their own economic position, and some others probably abuse a monopoly position in pricing certain procedures–but on balance it is pretty fair.
About what I expected. A set of responses from the well reasoned to those that one would expect from those seeking to defend and expand their entitlements. My analogies, as usual are apt. $X in debt during the course and scope of training is not an entitlement to $Y in compensation (regardless of how important you think you or your profession is in comparison to another). My economics knowledge is sound as is my medical knowledge regarding the issues that I have expressed it within. The world provider shortage has occurred secondary to our (and other first world) supply side restrictions. The resulting imbalance between supply and demand for services, the substantially higher compensation rates in the first world and the freedom for migration are the basis for the problem. Solving this problem is not within the scope of giving even more benefits to providers that practice domestically and thus making domestic practice that much more preferable. There is one for profit osteopathic school… the world did not end… we need more. The independent trucker finds him/herself in the same boat as the independent provider. Rising costs and an inability to pass the costs on to the consumer. Think about it for a moment and it will come to you.
Criminallopath sure writes a lot of words that don’t say much.
[Criminallopath:]“There is one for profit osteopathic school… the world did not end… we need more. The independent trucker finds him/herself in the same boat as the independent provider. Rising costs and an inability to pass the costs on to the consumer.”
How exactly is it that we need more for-profit schools making more providers if your analogy to the independent trucker holds? Seems if the paying market won’t pay more to cover relentlessly rising costs of business to the doctor, that would suppress the demand for more doctors, schooled wherever.
If you had to add a profit margin to an educational enterprise that costs more than enough as a non-profit, what economies to you expect in a for profit venture, unless ou mean to significantly downgrade quality (night school, perhaps? Maybe distance learning? Capella, Phoenix . . . Bueller?)
The for profit medical schools and the independent trucker analogy deal with two separate issues. The former, specifically, deals with finding a mechanism to increase domestic supply without further draining the world supply. The latter deals with issues of increasing cost pressures without the ability to pass on the cost to consumers (an example that has greater application than just medicine). Demand in this case, regardless of cost, will continue to increase as the population increases and as the segment of the population that is most demanding of services (the elderly) increases. Provider compensation rates are not so low (as some would have one think) as to place any realistic bottleneck in the potential supply of those wishing to become providers. We may see the death of the independent provider business model (although I doubt it) but even within the managed care model, provider compensation rates are substantive.
The educational model here is simple. Pass the boards and complete a residency. Schools worldwide are able to produce students that are judged according to more stringent standards in regards to the former than those produced here. This is done without the CME red tape and interference of domestic schools and could be readily replicated here if not but for the intransigence of the special interest group of existing providers.
C≈Path:
Your concept of a “market” and of demand seems flawed. You speak of an increased demand and an enlarging pool of elderly Medicare beneficiaries as if they were the same thing. If the payments of those burgeoning rolls of Medicare enrollees don’t cover costs, you cannot speak of their wish to purchase services as “demand.” All they are is people who want to consume, no different than throngs of the sick and underprivileged somewhere else where there is no medical care. What you speak of is a market failure, wrought by government price controls. In the harsh real world, that invites black markets and hardship. “Demand” does not necessarily increase as the population increases, only the numbers wanting what they or their government cannot or will not let them buy. Welcome to the East Bloc, before the fall of the Iron Curtain. I hope you get to become one of the Party elite with special access to the good polyclinics.
Want cheaply produced graduates? We already have a supply of those. The USA pays nothing for IMGs’ educations, yet they have not fixed the problem of supply as you see it. When those immigrants meet the market, they aren’t bottom-fishing or seeking volume at the expense of price. They need to pay the same costs (except loans, I suppose) as everyone else. Setting aside the immorality of plundering the graduates of nations far more strapped than our own–no inconsequential thing IMO–we still can’t fix the problem. Flooding the physician labor market with “graduates” of low-quality proprietary schools and making doctors of people who cannot find their way into the large supply of seats already available is not the answer you seek. You can’t have loads of care at every age, serve a population indifferent to personal responsibility, grant nearly carte blanche to spend silly in the last months of life, give the population an entitlement to use emergency departments at their reckless discretion and not have health care cost a bundle.
The answer to this problem is not just pumping out more doctors.
I lived near a medical school as an Engineer. The students I spoke to were there for the money period. KP’s vast country house is very nice. Your salary is not high, our salary is too low. Our Unions have been destroyed. Your AMA is next.
All I know is that Hollywood and professional sports players make way more than doctors and it turns my stomach! Ask what they should make. Only in America!
Comments on this entry are closed.