Available at 
Tweet
I do. Not debatable! He's just awesome! 
Here's the real post:
I saw this on my financial economist blog The Baseline Scenario.
http://baselinescenario.com/2009/06/...about-doctors/
The issue at hand is appropriate salary levels for U.S. doctors. Apparently, a published study discussed presents U.S. salary levels as much higher than those in other countries. The discussion is whether this contributes to the high cost of medical care here and if it should be addressed in health care reform. Obviously, this is not a simple issue and I will be interested to see how the economists on Baseline feel about this. Usually, a good discussion results after a post.
I thought it might interest some people here. Please read this comment from the blogsite posted by statsguy. He's always, always, always got a great opinion about economic policy - but I was amazed at how well he grasps the medical economics. (Sorry for the large cut and paste!) I didn't expect a considered opinion from a group of economists! Maybe there is hope.
So.....what do you think of the proposals at the end of his response?
Here's the real post:
I saw this on my financial economist blog The Baseline Scenario.
http://baselinescenario.com/2009/06/...about-doctors/
The issue at hand is appropriate salary levels for U.S. doctors. Apparently, a published study discussed presents U.S. salary levels as much higher than those in other countries. The discussion is whether this contributes to the high cost of medical care here and if it should be addressed in health care reform. Obviously, this is not a simple issue and I will be interested to see how the economists on Baseline feel about this. Usually, a good discussion results after a post.
I thought it might interest some people here. Please read this comment from the blogsite posted by statsguy. He's always, always, always got a great opinion about economic policy - but I was amazed at how well he grasps the medical economics. (Sorry for the large cut and paste!) I didn't expect a considered opinion from a group of economists! Maybe there is hope.
It’s very critical to note that in the US, doctors often pay the full costs of their education. Elsewhere, this is not the case, which has drawn criticism in these other countries:
http://www.independent.co.uk/news/ed...rs-513659.html
If we cut doctor pay to UK levels without subsidizing undergraduate and med school educations, we will be impoverishing our doctors. Doctors also work more hours in the US (and in the UK, they are having challenges keeping doctor hours to the targets)
http://news.bbc.co.uk/2/hi/health/7845282.stm
MORE points:
- You indicate that doctors can make up in 2 years the difference in medical school costs. This is entirely incorrect. It does not take into account residency (pays lousy, last a few more years, during which you are earning LESS and probably incurring debt).
- It does not account for taxes (especially at the higher marginal rate)
So let’s run the numbers again:
199k – 70k = 119k. After taxes, that’s probably 70k. So the payoff time is nearly doubled (after accounting for interest).
MOREOVER, let’s add the fact that for 6 years the physician is deferring compensation. That is, they are NOT earning the 70k a year (which is taxed at a lower rate, and facilitates earlier savings, earlier retirement, etc.).
ALSO, you indicate doctors can make up more lost wages over the course of a 30-40 year career. Doctors often complete residency at 26 to 28 years of age. So if they retire at the same time as someone who starts working at 21 or 22 (with an undergrad degree), they will retire at 61 to 62, with only ~24 to 25 years of work (of which they spent 4+ years paying off debt, and recognizing that they started working without the 6 year head start of savings/housing payments that someone with an undergrad degree would have).
FINALLY – and quite critically – the person earning 70k probably does not work the 80+ hours that a typical resident has to work to earn their wings in residency.
http://en.wikipedia.org/wiki/Medical...ent_work_hours
Working 82 hours a week (yes, that breaks down to 13 hours a day 7 days a week) would give that 70k earner a rather higher wage in most places.
And post-finally, the wages described herein do not fully account for the differences between primary care and specialists.
And post-post finally, doctors are presumably more talented than the average laborer… One might assume that if they were working elsewhere, they might be better paid than average.
So, in terms of policy comments:
1) The US would probably benefit by lowering wages AND covering the cost of education (thus giving physicians the option of taking lower paying jobs that have more social value rather than taking the highest paying job they can find to pay back loans), or by offering forgiveness of loans in exchange for public service.
2) The US would benefit from more doctors, and fewer hours worked per doctor (which, incidentally, has been shown to reduce occurrences of medical error).
3) The pay discrepancy between specialists and GPs, which is largely driven by the insurance and medicare compensation schemes (that richly reward expensive diagnostic procedures by squeeze standard office visits) is greatly responsible for this – the McAllen article helped elucidate that point.
http://www.independent.co.uk/news/ed...rs-513659.html
If we cut doctor pay to UK levels without subsidizing undergraduate and med school educations, we will be impoverishing our doctors. Doctors also work more hours in the US (and in the UK, they are having challenges keeping doctor hours to the targets)
http://news.bbc.co.uk/2/hi/health/7845282.stm
MORE points:
- You indicate that doctors can make up in 2 years the difference in medical school costs. This is entirely incorrect. It does not take into account residency (pays lousy, last a few more years, during which you are earning LESS and probably incurring debt).
- It does not account for taxes (especially at the higher marginal rate)
So let’s run the numbers again:
199k – 70k = 119k. After taxes, that’s probably 70k. So the payoff time is nearly doubled (after accounting for interest).
MOREOVER, let’s add the fact that for 6 years the physician is deferring compensation. That is, they are NOT earning the 70k a year (which is taxed at a lower rate, and facilitates earlier savings, earlier retirement, etc.).
ALSO, you indicate doctors can make up more lost wages over the course of a 30-40 year career. Doctors often complete residency at 26 to 28 years of age. So if they retire at the same time as someone who starts working at 21 or 22 (with an undergrad degree), they will retire at 61 to 62, with only ~24 to 25 years of work (of which they spent 4+ years paying off debt, and recognizing that they started working without the 6 year head start of savings/housing payments that someone with an undergrad degree would have).
FINALLY – and quite critically – the person earning 70k probably does not work the 80+ hours that a typical resident has to work to earn their wings in residency.
http://en.wikipedia.org/wiki/Medical...ent_work_hours
Working 82 hours a week (yes, that breaks down to 13 hours a day 7 days a week) would give that 70k earner a rather higher wage in most places.
And post-finally, the wages described herein do not fully account for the differences between primary care and specialists.
And post-post finally, doctors are presumably more talented than the average laborer… One might assume that if they were working elsewhere, they might be better paid than average.
So, in terms of policy comments:
1) The US would probably benefit by lowering wages AND covering the cost of education (thus giving physicians the option of taking lower paying jobs that have more social value rather than taking the highest paying job they can find to pay back loans), or by offering forgiveness of loans in exchange for public service.
2) The US would benefit from more doctors, and fewer hours worked per doctor (which, incidentally, has been shown to reduce occurrences of medical error).
3) The pay discrepancy between specialists and GPs, which is largely driven by the insurance and medicare compensation schemes (that richly reward expensive diagnostic procedures by squeeze standard office visits) is greatly responsible for this – the McAllen article helped elucidate that point.
Comment