Have a cursing thread about Health Care in the US

I dunno, I've seen this argument before and I'm not really convinced it adds up to "doctors don't make that much money." The average starting salary for a college graduate is around 44k. Allowing for raises n' such, they'll make let's say around 250k during the five years that their classmate is in medical school and doing a residency. So the doctor missed out on that much and is 162k in debt, meaning that they're in the neighborhood of 410k in the hole. They make 113k per year more than their starting salary would have been if they hadn't become a doctor, but let's be really generous and assume that the non-doctor has consistently gotten really great raises during those five years and now makes 65k a year. The doctor is still 92k ahead per year, meaning that he or she will recoup his 410k investment in just under four and one half years. Maybe throw six more months on there to cover the interest on their student loan. They're still doing just fine.

It does expose a problem with our system, though: doctors make a shitload of money in part because they have a shitload of debt to repay, so if we fixed our education system too we could actually just pay doctors less.

There probably is ludicrous inequality with GPs vs. specialists, I've seen stuff like this.

Yeah but someone who gets into medical school isn't an "average" college grad; far from it. They're the top of the heap, so comparing them to the "average" salary is just not a very good comparison. I know in the corporate world, you will pass that 157k compensation mark easily by the time you're even just a manager...and in my company at least, you can get there without any kind of additional education.

That's why I was making the distinction between procedure based versus diagnostic based. Procedure based are those specialties like invasive cardiology, surgical specialties, radiology, etc. You get reimbursed by procedure...regardless of how much time you take. The diagnostic specialties, like primary care, neurology, endocrinology, etc., you get reimbursed a very low amount for diagnosis...even though that could take a very long time to do, and is critical to the future medical care for the patient. For example, an endocrinologist gets paid a small amount for a diabetes visit...regardless if it's the 5000 one for a type 1 diabetic (who by that point is basically their own caregiver) that may take 3 minutes, or the first visit with a newly diagnosed type 2 diabetic, where you need to go through changes to living habits, exercise, diet, medications, etc. Can easily take an hour, if not more, but...you get paid the same as the 3 minute visit. Even though setting the stage for that type 2 and convincing them lifestyle changes is just critical to their outcome (regardless of meds), the doc is completely disincentivized to spend that needed time.

Eightball your post is pretty much typical of those defending and/or justifying high doctor salaries. I don't mean to pick on you, but at this point it's a pattern I've seen repeated dozens of times and it's honestly kind of misleading. So let me break it down:

1) Doctors go into lots of debt and have residency requirements: non-sequitur. The price paid for the services of a doctor (or really anyone else) should be set by a market. This doesn't seem to be what's happening; we do not have a functioning market for health care. Furthermore, other countries that do have somewhat better functioning markets for health care display much lower compensation to doctors. This leads me to believe that doctors are pocketing rents that they are not entitled to.

That being said: I think it sucks that medical school is so expensive. I think the entire concept of residency is abhorrent; it's basically a way for established members of the profession to use new entrants as indentured servants and then pocket lots of rents. Nonetheless, these things have nothing to do with how much physicians ought to be compensated. Most PHd programs will take 4-5 years to complete and, unless you're getting some aid of some sort, will probably cost at least 20-30k per year. Someone who earns a PHd in Art History has performed an impressive feat and in the process may have racked up just as much debt as a medical school graduate. Are they entitled to employment at a compensation level higher than 95% of the country? I certainly do not think so!

2) Some lawyers make lots of money: irrelevant and highly misleading. The ones you cited - associates at top law firms - are a tiny minority of law-school grads. These are basically top-5 law school grads and maybe a handful of grads from other schools and that's it. If you look at law-school grads as a whole, they make much much less than doctors. If you're going to compare professions, you need to compare average to average, not creme-de-le-creme to average.

3) Physicians "only" make 157k. You're cherry-picking the lowest-paid doctors. What's more, 157k is a LOT of money. It's more money than like 95% of Americans will ever make. Specialists can make 500k+.

It may be the case that high salaries for doctors are justified. Your post does not make that case. To make that case, one needs to demonstrate that we have a functioning market for medical services (I believe the evidence is almost conclusive that we do not, but reasonable people can differ) and that examples of better-functioning markets in other countries (where doctors are paid much less) are not operative.

This is a fair point. However, we do still have doctors, and presumably most of them become doctors because it's lucrative and also because that's what they want to do, not because they're smart enough to excel at any career path they choose but too dumb to run the numbers on what's the most lucrative. However, we're getting pretty far afield here; as this discussion is about health care, we're not really interested in what the very best career options for some of the people who become doctors are, just in actual doctor pay. I apologize if this isn't how you meant your post, but when I hear this business about doctor pay not being as high as it seems because of loans and stuff, the point is not generally that they could have made even more money doing something else (which is true), it's that they aren't making that much relative to their financial obligations (which is, as far as I can tell, false).

What corporate world are you talking about where its easy to make nearly quadruple the median household income?

Bear in mind whatever a doctor is making, part of his/her financial obligation is

1. Student loan repayment which is on average $1000/month.
2. Malpractice insurance which is anywhere from $10,ooo to $200,000 a year depending on specialty and area.

You have to account for the lost opportunity cost that med school and residency entails. It's part of the standard ROI when looking at an educational investment in your future. See your comment about an art history PhD; if you walk into that PhD thinking you're going to make big bucks...well...reality hurts, doesn't it?

Also, regarding your comment about equivalence, look at how much physicians are paid in Canada. Interesting.

In the UK, GPs in private practice make 103k pounds per year, which puts them around $156k US. Those working for the NHS get paid $123k US on average. And the average debt for a UK grad is $36k US.

Actually, when you look at it, the numbers are pretty similar. There were roughly 17,000 graduates of medical school in 2010. There are roughly 40,000 graduates of law school every year, with an estimated 25% of those (or 16,000) working at the top 250 law firms.

And it's not only the grads from the top 5 law schools who get the big firm jobs. It's roughly held to be the top 13 law schools, but all within the top tier (top 50) have a lot of play in that world as well (I worked at a bigfirm, and I didn't go to one of the top 13 law schools).

I picked the largest group of physicians; some 1/3 of physicians are PCPs. And 500k+? Very few specialists, and only the surgical specialists, make over that. Looking at this distribution it's CT surgeons and spinal specialists (small subset of orthopedic docs). Specialists like orthos are the exception, not the rule, and ortho is the largest surgical specialty. Even being the largest, there are some 25k orthos in the US; that represents a solid 4% of the physician population.

When people scream about how much physicians make, they don't really understand that most physicians don't make those very large salaries...it's the smaller subsets that do. It's like saying lawyers all make insane salaries based only upon what a bigfirm partner makes.

I said compensation, not income. That includes things like health care, rent, insurance, etc.,all of which a private practice doc will pay out of pocket for.

Ok, but you did post the average starting salary for a doctor and some other number for lawyers. For reference, the 160k you quoted for a first-year associate at a major law firm is several times higher than the actual average starting salary for lawyers, which is 63k.

What I think you're not getting is that 153k is an enormous salary. When you say "you know people think doctors make so much money but only a very few make 500k, the average starting salary is actually only 153k," most peoples' reaction is going to be "no shit, 153k is so much money."

It bugs me to see this described this way because viewing debt in terms of monthly payments is for suckers, and talking about this as though this is a fixed cost that doctors just have to deal with every month greatly exaggerates the degree of the problem. A doctor making a starting salary of 153k/year who starts with medical school debt of 160k can have that debt paid off in just a couple of years without any major hardship. They don't usually, because like most people they don't consider debt repayment a priority, but they have the means, and it really saps whatever sympathy I'm inclined to have for them on that front.

This is dead on. I took out ~$180k in loans to attend law school, and am on pace to finish repaying it within 3-4 years of starting work. Loan repayments are by far my largest expenditure every month. But even with that, and with my obscenely high rent (fuck you very much, NYC), I am not exactly dumpster-diving to make ends meet. The only people I know who are taking significantly longer to repay their loans are doing so because they're spending much more money than I am on luxuries like large apartments, going out drinking constantly, overspending on clothing, etc.

I know (though 150k isn't the starting salary...it's the average salary for PCPs). But you do have to factor in the things talked about earlier: the 1,500-2,100 per month in servicing the average med school debt; the time it takes to get to actually earning a salary; the med mal insurance; etc.

Other things we have to consider is that these are people who often times have other people's lives in their hands. That comes with a huge amount of responsibility, and attendant personal liability.

Aside from settlements from med mal, docs can go to jail for gross negligence (which if warranted, they should), but they can also go to jail for Medicare coding errors made by their billing people. None of us will face that kind of personal liability...but for a doc, that's part of their life. They also have a billion ridiculous laws they're beholden to; like the Stark anti-kickback law. Originally conceived with good intentions (stopping self-referrals for expensive and unnecessary diagnostic procedures), it's gotten so crazy that a physician cannot accept a "gift" or other item of value from another prescriber (or health care company) over $25 because it could be considered a felony kickback...

I'm a lawyer and I'm under a hell of a lot less scrutiny than physicians are.

Ah dammit, I read your original post wrong this whole time. Although it's surprisingly not that far off; looks like the average starting salary for a PCP is 125k. So even taking malpractice insurance into account that debt is repayable in a just a few years if they prioritize it.

Also, I don't begrudge doctors the money they make. I just don't think it's accurate to talk about the debt they take on, etc. as though it undercuts most or all of their additional earnings. Medical school still looks to be a supergood investment on balance.

The massive over supply of people who want to be doctors as compared to the number of med school slots suggests a simple solution.

In terms of doctor compensation, in my view, most of the excessive compensation is not in the area of primary care/general medicine/family practice (most of which doctors would be classified as "internal medicine" doctors). It's in the area of specialty medicine. I do understand that medical specialization does require additional training over and above general medince but when you compare the compensation premium specialists receive (in the range of $120K to $250K per year over and above average primary care doctors, which equates to an 80% to 150% premium over and above primary care salaries) to the extra training involved (typically 1 to 4 years, depending on specialty, which when you compare that to the 8 to 12 years of combined higher education, medical school and residency that primary care doctors need is only 10% to 50%) you can see that specialization in medicine offers disproportionate benefits.

Part of this has to do with the pricing schemes. For reasons I do not understand, fees based on diagnosis (which is the majority of primary care) are far less than fees based on procedures (which is the bulk of specialty billing). I am not sure why procedure billing is so far out of whack but from my understanding, it is. It may be that specialty procedures are even further down the rathole of market imperfection, requiring even more knowledge to rationally evaluate, and occurring more frequently in connection with crisis treatment as opposed to diagnosis treatment which tends to be more of the mundane/chronic type of treatment, which may be a bit less subject to the inherent structural flaws of the medical industry.

But if you want to put it simplistically, I do think it is correct to say that specialty medicine is one of the areas of excess spending in US health care and that if the health care system is to be reformed, then future growth in specialty doctor compensation will have to fall below it's historical growth pattern (which has been very very high). I doubt very much the US will ever see the kind of truly major reform that would actually reduce specialist pay but I think "bending the curve" of future growth is possible, and that the growth rate of specialist pay is one of the curves that needs to be bent.

Agreed. But doing so, you're going to be living under some pretty serious constraints...after having been eating Ramen and so forth for the past 11 years or so (4 years undergrad, 4 years med school, 3 years residency), I'm sure people want to cut loose a bit. And many people want to start families by then. That's a heck of a lot of discipline...and I'm not sure I could live by those requirements.

We can also get into the fun stuff like how physician compensation has actually been decreasing the past few years. Even back in 2008, compensation was trailing inflation.

Oh, ok. I was all uhhhh

Who is the you in this sentence? Is it me the potential physician? In that case I agree. Is it me the guy who's interested in health care policy? Then I don't give a crap. Compensation should be determined by a well-functioning market; the only considerations should be supply and demand for the services being offered. You are declaring that - in the case of physicians - high debt necessitates high salaries. Yet you're agreeing with me that the same doesn't apply with people with an art history PHd. It seems to me that you're special casing physicians. Am I wrong about this?

Certainly these are point in favor of physicians deserving high salaries! Honestly it's strange to me that the discussion always goes toward physicians, I suspect that it's because they're by far the most sympathetic of the cohort in question (doctors). Everyone likes their family doctor! And they're the lowest in terms of compensation. In terms of compensation, 150k annually for a physician is about the most defensible outcome in health care system. I suspect that's why this conversation has veered specifically into PCP compensation, it's the most easily defended proxy for overall doctor compensation.

Compare apples to apples, as extarbags points out. You can't compare the best compensated lawyers to the worst compensated physicians. That's apples to like I dunno bears or something.

First off, nobody is "screaming about how much physicians make," that's an unfair characterization of this discussion. Second, physicians make a lot of money. The least well-compensated make more than about 93% of the rest of the population. And it goes up from there! Even accounting for the (ridiculous) debt load, their lifetime earnings will far eclipse those of most Americans. What's more, these compensation rates are set in a market that isn't functioning. Thus, almost by definition, we cannot say that this is the "correct" level of compensation, because the only way to determine that level is to have a well functioning market.

Eightball, I call straight up bad faith argument. You are using quotes for compensation gains for *2008* the year of the worst recession in 80 years. That's flat out bullshit. *Every profession* had poor compensation gains or in some cases losses for 2008. Using 2008 ias a benchmark without comparision to overall economy or other professions is just full on crap. You just lost me.

Dunno. If compensation was the goal, I'd go get an MBA, honestly. Two years after undergrad only, and a lot less debt. If you have the grades to get into med school, I'm guessing you will have the grades to get into a top MBA program as MBA programs admit a lot more than the med schools do. For example, Harvard's B school admission rate is 12%; their med school is 4%.

And some of those starting salaries are pretty close to a PCP's starting salary.

That's why I also quoted a 2012 study before then. Here.

But since it's graphical, it's tough to block quote that one.

Not really. The median personal income in the US is only 26k/year. If you just lived on double that, you'd still have over seventy thousand dollars a year left over to put toward your debt. You don't need to get into the really extreme side of personal finance or live a very ascetic lifestyle to get rid of that debt in a hurry, you just have to decide to do it an be willing to not live unbelievably extravagantly while you do it.

Of course they do, and I'm not judging! But that's their decision, and if they choose not to pay down their debt than their debt can't be said to offset their income. Put another way: if a doctor goes out after finishing school and buys a mansion and a sports car, he isn't saddled with $2,000/month in student loan payments because that's just the price of going to medical school, he's saddled with $2,000/month in student loan payments because that's the price of having a mansion and a sports car.

No it's not just the debt alone. It's what they are responsible for (part of my secondary though posted a little bit above this). Docs have a lot riding on their shoulders. Art historians? Not so much.

Agreed. I won't defend surgical specialist salaries, as I'm not sure I can. Internal medicine is extremely important...and extremely undervalued by our band-aid medicine society. But the majority of physicians are internists, and they're not paid ridiculous salaries. Lumping them with the smaller subset of surgical specialists to say that all doctors are paid too much based on the salary of the surgical specialists is disingenuous.

I agree they have far more responsibilities, and frankly I suspect a functional market would compensate them much more highly than art historians. We do not have a functional market, which is sort of my entire point.

The reason the costs are so high is that the schools are in on it. The entire system has one linking concept: any time something touches the US medical system, it jacks it's prices up to get in on the cash cow.

Yes, med schools are expensive. Because doctors are well paid, so they know they can get away with it.

A loan repayment system would need to be part of the deal with lowering costs overall, because we can't just hand wave away crazy high salaries with "but, their school loans!" and then leave the crazy high salaries intact. This is already kind of done, where loan repayment is part of a resident's job offer if they go to under serviced areas or go into needed specializations. It's hard to get doctors to work in Bumblefuck, Maine, so we pay off a giant chunk of their debt if they agree to work there for a few years.

Take the AMA out back and shoot it? There is absolutely an artificial cap on supply here trying to keep the equation out of balance.

There's also apparently an odd medicare funding limit hurting our supply of doctors, in that it directly funds 100,000 residency slots and it doesn't seem like hospitals are willing to take one for the team there and are mostly using that medicare money to train new doctors. I wasn't aware medicare was paying for that shit.

I don't think that's crazy at all. I'm in workers' comp, and we're currently limited to $25 gifts as well (I have no idea if this is a legal restriction or not. I was under the impression it was self-imposed, but I didn't care enough to inquire further). This is a Very Good Thing. The stories my older co-workers tell about the bribes--I'm sorry, vendor gifts--that used to be paid earlier in their careers are insane, and include things like trips to ski resorts for examiners, nevermind managers and executives.

Hell, every company I've ever worked for has had rules against business partners giving any employee gifts. We're so big on the idea of avoiding potential kickbacks that we don't even take bulk discounts from sales folks (my current employer, and this is not a normal thing: our vendors are stunned every time this comes up)

It seems like a shit rule because you totally want to give your friend/business partner a nice present, but the rule exists for a really fucking good reason.

These aren't traditional conflict of interest rules. It'd be one thing if it was self-imposed (see the PhRMA Code as a good example of voluntary behavior of how docs can't get even minimal value gifts like pens or staplers from pharma companies anymore). But to criminalize it? It carries a max penalty of five years in jail...which can be more time than a conviction for some violent crimes like some varieties of voluntary manslaughter. In many cases, its not a gift even that triggers this. A doc can't refer patients to a diagnostic facility she has a "financial interest" in without running afoul of the kickback rules...which can include a facility owned by distant family, for example. Fine if it was limited...but they can't do this at all unless one of the arcane exemptions applies.

And in addition to the jail time, you'll lose your license and pay a fine (either a max of 250k or twice what you received in kickbacks), you're also blocked from ever working for any company that touches federally funded healthcare (I.e., Medicare). Which means you can't work in the health care industry ever again. This means starting over...

It's extremely punitive.

I can't say I really see this as a bad thing. If we're talking about ways to reduce health care costs and improve the system overall, I don't think "remove the rules that stop doctors from referring patients for unnecessary diagnostics tests at a facility they have a stake in" is a good suggestion.

Yeah, pretty much. Is there anything stopping, say, the CalState or UC system from quadrupling the number of med school slots offered?

As to the issue of increasing doctor supply, I do agree that the AMA and the med-schools function similiarly to a cartel or medieval guild and we should consider options to open up entry to the practice of medicine with more efficient med schools and other reforms. However, I don't think this will have as much impact as most people who advocate this type of reform would expect. That is due to the fact that since the health care market itself is broken, increasing doctor supply will not automatically have the expected market effect of reducing doctor price.

An example of how the health care industry does *not* respond in a predictable market fashion is the issue of areas with a high density of medical providers vs areas with a low density. In a normal market, areas with more supplier access will have lower prices and thus lower average expenditures but this is not born out by the real world statistics for health care. In the US, the more health providers in the location, the more services are provided per patient and average health expenditures go up, not down as you would expect.

The health care industry does not respond to market inputs very well as the health care market is too imperfect. Thus, reducing the cost of med school or allowing alternative ways to enter the practice of medicine are not likely to have the expected effects. I still support these ideas in principal, but continue to feel that this type of reform, like malpractice reform, or several of the other more "market oriented" suggested reforms are simply nibbling around the edges of a system that is fundamentally broken on the inside.

re AMA: strictly speaking we have a cartelized model of health care provision. From that, I see no reason not to infer that they're practicing cartel style pricing and collecting a shit ton of rents.

I'd be okay if it stopped unnecessary referrals, but it stops all referrals. It's a sledgehammer, not a scalpel. Interestingly, theres a level playing field argument as other highly regulated and important industries are not similarly regulated. The restrictions on physicians are more than those on the banking industry, and oh right, politicians (or lawyers*). And more importantly, DOJ/OIG actively enforces these laws. Somewhat similar (but less punitive) conflict laws exist in the arms industry, but aren't actively enforced...

* referral gifts ahoy!

Yep, the banking industry is notoriously poorly regulated, and several aspects of political money and lobbyists are shameful. I don't think it follows that we should be "fair" by extending that horrific regulatory state to doctors as well.

I don't advocate that at all, but its a bit too (pun intended) stark. Nuance is completely missed here in this law. I edited my post a bit to reflect this.