Physician Business Ideas - One More Time: Doctors and Money

My July 30 Sermo post “Do Doctors Make Too Much Money?” evoked a brisk response and put the matter in context. If you’re recall, I was commenting on a July 29 NYT piece “Sending Back the Doctor’s Bill.” It said in essence American doctors make 2-3 times what European counterparts make, and that’s a big reason why our health costs are so much higher than Europe.

Sermo readers, some of whom had practiced in Europe, commented,

•Americans must pay off educational debts of up to $200,000 while European college and medical training is subsidized.

•Europeans may work half the hours of Americans.

•Europeans enjoy miniscule malpractice costs.

•American practice costs are higher.

To sum up, comparative incomes of American and European doctors must be put in cultural context.

In the August 6 NYT, readers responded in a series of letters to the editors. Here are a few excerpts what all of them had to say.

•Uwe Reinhardt, Princeton medical economist .

Any college graduate right enough to get into medical school surely would be able to get a high-paying job on Wall Street. The obverse is not necessarily true. Against that benchmark, every American can be said to be sorely underpaid…The total amount Americans pay their physicians represents only 20 percent of total national spending. Of this total, close to half is absorbed by the physicians practice expenses, including malpractice expenses, but excluding the amortization of college and medical-school debt, this makes the physicians’ take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often to look to save lives. It strikes me as a poor strategy.

•Amelia Hershberger, of Albany.

If we are to restructure the system by which we pay doctors to match Europeans, we must also finance education as Europeans do, but using state dollars to finance the full or majority costs of higher education, including professional school.

•Robert Brinham, Morristown, New Jersey

The concept of prepaid group practice remains sound today. Although attractive to participating physicians and patients alike, this model has not gained wide acceptance beyond the West Coast and certain progressive markets like Minneapolis-St. Paul and Boston. As you suggest, the forces resisting change to the status quo remain formidable.

•Ray Groves, New Canaan, Connecticut

You seem to advocate further reducing the incomes of doctors to the levels reported in a survey five years ago in Europe of $60,000 to $120,000. How many of our brightest sons and daughters will seek these positions?

•William Baker, Fairview Park, Ohio

The cure is obvious. End the AMA monopoly. Since the American public has accepted relocation of much of our manufacturing to China and India, why not accept opening our medical schools to everyone qualified and accept an unlimited number of doctors from foreign countries?

•Trevor Burnham, Missoula, Montana

Doctors will be able to charge high prices for their services as long as demand for theirservices outstrips supply. Health care conservatives favor the free-market approach of denying services to those who cannot afford them. If liberals want to remove this restraint, they will have to bolster supply. The fact that so few people become doctors despite the job’s salary, stability and prestige tells us that some somewhere in the pipeline of medical training and accreditation lurks a bottleneck. Conservatives has put forward one possible solution: tort reform. Liberals should give it careful consideration.

That’s all folks. I will now put the whole matter to rest.