Are Physicians Paid Too Much?
That’s the provocative question posed in and article in today’s NYTimes Week In Review section — click here.
How to fix the health care system? Easy, liberals say. If Washington would just force cuts in prescription drug prices and insurance company profits, plenty of money would be left over to cover the uninsured. Conservatives prefer to argue that the answer lies in forcing people to pay more of their own medical costs.
But many health care economists say both sides are wrong. These economists, some of whom are also doctors, say the partisan fight over insurers and drug makers is a distraction from a bigger problem: the relatively high salaries paid to American doctors, and even more importantly, the way they are compensated.
“I always find it ironic that when I go to doctor groups and such, they always talk about the cost of prescription drugs,” said Dana Goldman, director of health economics at the RAND Corporation, a nonprofit research institute in Santa Monica, Calif. Prescription drugs cost, on average, 30 percent to 50 percent more in the United States than in Europe. But the difference in doctors’ salaries is far larger, Dr. Goldman said.
Doctors in the United States earn two to three times as much as they do in other industrialized countries. Surveys by medical-practice management groups show that American doctors make an average of $200,000 to $300,000 a year. Primary care doctors and pediatricians make less, between $125,000 and $200,000, but in specialties like radiology, physicians can take home $400,000 or more. In Europe, however, doctors made $60,000 to $120,000 in 2002, according to a survey sponsored by the British government in 2004.
We’ve previously highlighted research showing that we pay much more for just about everything in the US health care system — click here for 2/21/07 posting. So why should physician pay be different? Question is: what can we do to change the underlying dynamics that keep costs increasing so relentlessly?
Pay physicians by salary? Ain’t gonna happen.
Decapitate physician payment rates? Don’t hold your breath.
Change the financial incentives underlying physician reimbursement? Now we’re talking. For some of our ideas, see HCFA’s cost control agenda.
