One of the nation’s leading recruiters for physicians, nurse practitioners and physician assistants, Merritt Hawkins, has issued a regular report on what the market for these clinicians is like. During the epidemic, hiring for these groups slowed, but it has since begun to rebound. Among clinician types, nurse practitioner searches were the highest, likely due to attempts to find lower cost providers as salaries have soared. The lowest demand by specialty type was for pediatricians, somewhat shocking for a country that supposedly loves its children. Mental health clinicians saw some of the highest demand, which is not at all surprising, given what we continue to put our country and society through.
Nurse practitioner salaries in recruited positions rose 12% in 2021, to an average $140,000. Physician assistant salaries rose 14% to an average $128,000. Among doctors, pay for interventional cardiologists was highest, at $611,000 on average while orthopedists were offered $546,000. At the other end of the scale, pediatricians had an average salary offer of only $236,000. We continue to have warped priorities reflected in physician compensation, as primary care doctors are paid far less than specialists. But if you wonder why health care is so expensive in the US, these salaries explain a lot. That is far, far more than the same physician would earn in another country. (Merritt Hawkins Report)
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Amazing, but not as crazy as it seems. One of the reasons for the high salaries especially in specialized practices is the insane cost of getting through college and medical school and into practice. It is not unusual for a new MD to start work $300 — $500,000 in debt. This drives a lot of mds to specialize because the pay is better and helps support the loans. There are a lot of programs that help reduce the burden, but they require more md time and sacrifice, like agreeing to practice in an underserved rural area for a number of years and in return the state will pay part of the debt. Our priority should be to make medical school more affordable for normal people, PA and BS in nursing also, and not create more loan and aid programs that just add to the burden.
Nobel laureate economist Milton Friedman wrote his Ph.D. dissertation on how licensing and other barriers to competition increased medical costs. Since then, the barriers have grown.
“The other came from my next job – at the National Bureau of Economic Research, where I went in the fall of 1937 to assist Simon Kuznets in his studies of professional income. The end result was our jointly published Incomes from Independent Professional Practice, which also served as my doctoral dissertation at Columbia. That book was finished by 1940, but its publication was delayed until after the war because of controversy among some Bureau directors about our conclusion that the medical profession’s monopoly powers had raised substantially the incomes of physicians relative to that of dentists.”
One million physicians making $300K each comes to $300 billion. Half a million PAs and NPs making half as much ups that by 25%. Still less than 10% of the $4 trillion annual spending. So it seems to me that physician compensation is a factor in high costs here but can not be the major factor.
it is more of a factor than that analyses suggests, and what is important is the trend or rate of change in compensation, but you are correct, hospitals are far more responsible than clinicians for the rise in health spending and its absolute amount.