Do U.S. Doctors Make Too Much?

Some food for thought, drawn from an insightful article by Kocher and Sahni:

  • Of the $2.6 trillion spent on health care in the U.S. in 2010, 56% were toward wages for health care workers.
  • Unlikely almost all other sectors of the U.S. economy, health care has experienced no labor productivity gains in the last 20 years.
  • Even while wages fell in other sectors during the recession, health care wages grew at an annual rate of 3.4%.

In other words, doctors (and other health care workers too, but mostly doctors) are making too much (for the value that they provide). A commonly cited comparison looks at the salaries between physicians working in the U.S. and those working in other developed countries. I have reproduced a graph from a NYTimes article below:


But as a prospective future medical student looking down a very financially painful road, my first instinct response is to complain, “But medical education costs so much more here in the U.S.” (Not to mention the higher malpractice costs we face.) This meticulously calculated and highly controversial (judging from the 579-and-counting comments) blog post by Dr. Ben Brown lays out just expensive that education really is, and laments that the adjusted per-hour salary of doctors is really only slightly higher than that of high school teachers.

Which begs the question, why is our medical education system so expensive? Sure, we’re purported to have the ‘best medical education system” in the world (tentative statement, have yet to find supporting evidence). But if our medical education system is so good, why is our health care system so mediocre?

Maybe this isn’t simply a case of doctors’ wages being too high, although if delivery system reforms accelerate and shift payment from volume to value, doctors’ wages are sure to feel the squeeze (especially specialists’ salaries). It’s also a problem of doctors not being deployed effectively with the right mix of non-doctor health care personnel, such as nurse care managers, behavioral health specialists, home health aides, social workers, etc. In other words, it’s a problem of management, something that most doctors are sorely oblivious about, and something that is currently done mostly by people who have no clinical background.

One final point. A fellow student in my Public Economics class today made the claim that the American Medical Association is essentially the U.S.’s largest cartel, stringently controlling the supply of doctors in this country, and that if only they would loosen up then we could have a flood of new doctors that could solve the shortage problem and  drive down medical salaries. The argument is summarized here. My first instinct in class was to make a highly skeptical face (one which I’m sure my professor caught). After all, there’s a reason we have standards for medical schools, right?

But then again, even if abolishing standards for medical school isn’t the answer, then maybe changing them are. Here’s an article that makes the claim, “Those first two years of the basic sciences [in medical school] were grueling and stressful and for the most part pointless. Yes, pointless.”

I think some of the doctors I’ve shadowed and some of my friends currently in med school might just agree.

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