The underlying cause of our health care spending problems is the unit cost of services and products, not utilization, although there are areas in which utilization could be reduced without impacting quality. We pay our physicians a lot of money, and I have less of a problem with that than with high hospital spending and excessive executive compensation at nominally non-profit hospital systems. But there are specialist physicians who are so highly compensated that it could probably be scaled back. A new National Bureau of Economic Research paper looks at international comparisons of physician compensation, using Sweden, the Netherlands and Canada. (NBER Paper)
The authors’ method is to compare where physicians rank among all occupations in compensation. In the US, 84% of doctors are in the top ten percent of income, compared to about 60% in the other three countries. And 26% of US physicians are in the top one percent, with much smaller percents in the other countries. US doctors in that top 1% earn an average of one million dollars a year, compared to about $500,000 in Canada and under $400,000 in Sweden and the Netherlands. Lower down in the top decile of income, US doctors are earning about twice as much as their counterparts.
The authors make some truly bizarre point about relative position in the overall income distribution across professions being important and then we don’t look like our physicians are “overpaid”. But this is irrelevant to the question of why US health spending is so high. It is high in some part because we pay our doctors, particularly specialists, a very, very high salary. They might deserve it and be worth it, but it is a lot of money. The authors further suggest that while we might save some money by reducing physician pay, fewer people might then choose to become doctors. That indicates that money is what motivates doctors, and I am not sure that is either true or good.
Many specialist train (residency training) for several years beyond what a family practice, internist or pediatrician will train. Also, doctors in general do not start to earn any significant income until after residency and fellowship training. Many have significant debt from school tuition, housing costs and living costs during their education and training. So, this report you are referencing does not compare “apples to apples.” Doctors work incredibly hard, most are truly compassionate and caring. Physician burn out is a real thing and is becoming more common. We have a doctor shortage in the United States which is only getting worse with an aging population. I disagree with your assumptions and your unrealistic take on doctor compensation based on a single report and without appropriate research into the medical profession and physician compensation.
Every year I read multiple reports on physician compensation, actual pay to doctors, so I think I am pretty well informed. If you read the posts over the years, you know that I constantly talk about how hard it is to be a physician in the US and in terms of reforms I put revitalizing the physician/patient at the top of the list. That doesn’t change the fact that doctors are extremely highly paid in the US, specialists in particular, and that that high compensation is one reason our health spending is so high. If people think doctors are appropriately paid, then they are taking away one lever to reduce health care and health insurance costs, and really can’t complain much about it.
I am not one to dictate how much money ones makes. Having said that medical costs are a big part of government budgets and that is where incomes can be questioned. I put a question in google search asking what the price of gas would be if gas prices increased at the same rate medical costs have in the last 30 years. The answer came back between 15 to 16 dollars a gallon. The answer was AI generated and it showed numerical factors on how the results were attained. My gut tells me the number may be inflated but also suspect the real number is an eye opener.