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filter07

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http://blogs.wsj.com/health/2010/03/17/putting-a-dollar-figure-on-a-doctors-worth-to-a-hospital/

I made a ratio of salary/revenue. The mean is .227. Multiply that by the revenue, and you might say that General Surgeons should be earning about $481,000 a year, a 50% increase.

Looks like we should be asking for more money!

Specialty Salary/Revenue
Neurosurgery 0.202795092
Cardiology/Invasive 0.212018929
Orthopedic Surgery 0.227126346
General Surgery 0.151953238
Internal Medicine 0.110823724
Family Practice 0.106603764
Hematology/Oncology 0.225494017
Gastroenterology 0.270933583
Urology 0.290011456
OB/GYN 0.194995935
Cardiology/Non-Invasive 0.317506505
Psychiatry 0.155026261
Pulmonology 0.243169873
Neurology 0.284354862
Pediatrics 0.199730422
Ophthalmology 0.334634293
Nephrology 0.344388194

Mean 0.227739206
 

vhawk

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Interesting. Sort of a crude measure, but in the absence of any other factors (absurd premise #1), in a completely free market (absurd premise #2) then yeah, you would expect salaries to settle out at something just below revenues generated. In regards to #1, you'd have to consider all of the other benefits besides salary, though.
 

filter07

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Interesting, I didn't see that thread, as I don't check the FM forum, yet we have pretty similar analyses and discussions going on. As bad as GS is, FM and IM really get hosed.
 

vhawk

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Interesting, I didn't see that thread, as I don't check the FM forum, yet we have pretty similar analyses and discussions going on. As bad as GS is, FM and IM really get hosed.
Very doubtful. Like I said, its interesting data to consider, but when you've done a quick analysis and you come to the conclusion that a massive section of people are consistently and persistently being raked over the coals, you should stop, take a step back, and assume that it is almost a certainty that your analysis is leaving something out.
 

JackADeli

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...As bad as GS is, FM and IM really get hosed.
My general feeling is that physicians are underpaid. I won't go into one worse then the other.... I don't think those numbers take into account hours of labor, amount of call, length of training, hazards, etc....
 

vhawk

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My general feeling is that physicians are underpaid. I won't go into one worse then the other.... I don't think those numbers take into account hours of labor, amount of call, length of training, hazards, etc....
Ok, I'm not saying its IMPOSSIBLE, but how exactly does one become "underpaid?" What exactly does underpaid mean? Is there a "correct" amount that each job should be paid, and how do we determine this correct amount? I am not being sarcastic or anything. I can imagine certain definitions of "underpaid" that actually make sense. Its just usually used in a fairly arbitrary sense, like "teachers are underpaid" when any coherent definition would have teachers as OVERPAID, or at least "correctly paid."
 

thedrjojo

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Doctors are like assembly line workers, or blue collar workers, and hospital administrators, insurance company CEO's/administrators are the managers/supervisors... I wonder what these numbers would be for assembly line workers, who actually make the cars, or for CEO's, middle management, adminstrators? interesting food for thought as I go off to rotation...
 

SocialistMD

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Its just usually used in a fairly arbitrary sense, like "teachers are underpaid" when any coherent definition would have teachers as OVERPAID, or at least "correctly paid."
What is your "coherent definition" for determining this? Are you saying the service they provide to society is not worth what they are paid? Interesting (and unappreciative) to hear from someone who will be graduating from 20th grade in a few months and who wouldn't be there if not for his/her teachers.

I think what everyone is saying is that the service provided by an orthopedic surgon isn't more valuable to society than the service provided by the internist or the general surgeon. One would think that the renumeraton would be the same for all specialties (if not more for those in primary care), as it is dificult to define (especially for the patient needing said services) which specialty provides the "most important" care.

That said, the hospital's interests are not the same as society's, and the urologist and ophthalmologist bring in quick turnover patients who pay a lot up front, making them, in fact, more valuable to the hospital, correlating with their higher salary:revenue generated ratio. Consultants bill more than admitting physicians, which explains GI and nephrology (nephrology bills more for each spin than a regular consult, so that is 3x/week that they can bill more than the other consultants, and GI rarely consults without scoping someone). That leaves the admitting physicians left holding the bag, as they generally can't bill for procedures, yet are left with the chronicly admitted patients who sit in the unit and floor, eating up money, while all the admitting physician can do is write a daily note and bill $36/day's services. The general surgeon is in the same boat in terms of chronicity, but at least s/he gets to bill for the procedure done. When you think about this, you see why private hospitals load the boat with consultants and why surgical specialties admit to other, primary care services, as it allows the hospital as a whole to bill for more money. The admitting physician can, when reviewed, show how much revenue s/he generated by making those consultations, thereby keeping his/her job.

thedojo said:
I wonder what these numbers would be for assembly line workers, who actually make the cars, or for CEO's, middle management, adminstrators?
If you think about the disparity in salaries between administration in industry, the ratio would probably be much less (<0.05 range).
 
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vhawk

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What is your "coherent definition" for determining this? Are you saying the service they provide to society is not worth what they are paid? Interesting (and unappreciative) to hear from someone who will be graduating from 20th grade in a few months and who wouldn't be there if not for his/her teachers.
....really? This is the level of discourse on a board catering to highly educated scientists? You basically just said "but what about the children1?!?!?!" I cant think of many coherent definitions of under/overpaid, but one that springs to mind is something like "if it werent for some clearly defined artificial barrier, this person would be making more money." For example, if the government were to pass a law saying that no teacher was allowed to make more than 40k/year, then you could argue that perhaps the best teachers in the country were actually being "underpaid." Since this is not the case, and anyone can choose to pay teachers whatever they want, if there are teachers out there who are actually WORTH 250k/yr, then someone will pay them that. We dont exactly have a purely free market for paying teachers, but its fairly close....and the distortions go to making them OVERPAID, not underpaid.

I guess another "coherent" definition of underpaid is "Man wouldnt it be great if everyone made more money, I mean heck they do interact with THE FUTURE OF AMERICA!" Technically that might be coherent but it sure has a bunch of hilariously devastating consequences, so I think maybe we can reject that. Many things go in to wage competitiveness. Scarcity, desirability, cost of training, etc. I cant imagine how anyone could sit down and rationally consider the situation for teachers, with one of the most powerful unions in America, with relatively little training, with the surplus of capable candidates, and conclude that they are underpaid. It would be almost as preposterous as claiming that physicians are underpaid!
I think what everyone is saying is that the service provided by an orthopedic surgon isn't more valuable to society than the service provided by the internist or the general surgeon.
Well, two choices: either they are wrong, or "the service provided by an orthopedic surgeon isnt more valuable to society than the service provided by the garbage man or the librarian or the widget manufacturer." I dont care which one you choose, but you should be upfront about it. What kind of argument are we going to be making here....impassioned emotional pleas for egalitarianism, or logical economic arguments? Scarcity is a major driver of wages.
One would think that the renumeraton would be the same for all specialties (if not more for those in primary care), as it is dificult to define (especially for the patient needing said services) which specialty provides the "most important" care.
Well, "one" might think that, but I certainly wouldnt. Nor could I imagine a rational person doing so. Providing something "important" is a minor driver of wages. Although I suppose you could argue that, but then we'd have to get into an argument about what "important" means. I might not even disagree with you if we eventually settled on some definition of "important" that was basically synonymous with "high earning." The best way to find out what is "most important" to people is not by asking them, its by observing them.
That said, the hospital's interests are not the same as society's
Well now thats an understatement. Nor are my interests exactly the same as society's. Nor are yours.
 

MattD

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....really? This is the level of discourse on a board catering to highly educated scientists? You basically just said "but what about the children1?!?!?!" I cant think of many coherent definitions of under/overpaid, but one that springs to mind is something like "if it werent for some clearly defined artificial barrier, this person would be making more money." For example, if the government were to pass a law saying that no teacher was allowed to make more than 40k/year, then you could argue that perhaps the best teachers in the country were actually being "underpaid." Since this is not the case, and anyone can choose to pay teachers whatever they want, if there are teachers out there who are actually WORTH 250k/yr, then someone will pay them that. We dont exactly have a purely free market for paying teachers, but its fairly close....and the distortions go to making them OVERPAID, not underpaid.
WTF are you talking about? The vast majority of teachers work in the public school systems. This is not exactly a free market economy we're talking about here. My wife is about to start looking for a new job in the city where I'm starting residency. With 5 years experience and a master's degree she is going to be "overpaid" to the tune of $39,000 per year. There is no negotiation, there is no way to demonstrate superior skills worthy of superior compensation. That's the salary. In addition, teachers are subject to the whims of government funding. If tax revenues are down, guess what, teachers are laid off or the salary schedule is cut. If population increases without an adequate increase in revenues, they just pack more kids into the classrooms. Teachers aren't paid per student you know... the poor teacher with 36 kids in the classroom makes the same as one with 20.

So, to sum up,

"if it werent for some clearly defined artificial barrier, this person would be making more money." For example, if the government were to pass a law saying that no teacher was allowed to make more than 40k/year, then you could argue that perhaps the best teachers in the country were actually being "underpaid."
That is exactly the situation. The local government sets the salary. There is no negotiation.

Since this is not the case, and anyone can choose to pay teachers whatever they want, if there are teachers out there who are actually WORTH 250k/yr, then someone will pay them that.
As above, public school administrators can NOT choose to pay teachers whatever they want. You as an individual, of course, are welcome to pay a teacher whatever you'd like to educate your child, but your statement that 'someone will pay them' turns out in practice to be false. This is demonstrated by the fact that the vast majority of private schools pay far LESS than public schools. Apparently even the people willing to pay for their children's education aren't willing to pay THAT MUCH for it.

We dont exactly have a purely free market for paying teachers, but its fairly close....and the distortions go to making them OVERPAID, not underpaid.
Again, how is the system 'close' to a free market? And you still haven't defined the 'distortions' that make teachers 'overpaid'. What is your idea of the worth of a teacher? Forget about 'value to society', how much value did YOU receive from your teacher? For shiggles, I did a quick bit of math. The U.S. Census Bureau says the average high school graduate earns 1.2 millions dollars over a lifetime. Divide that by 12 years of education and you get 100k per teacher (I'm ignoring the fact that you had multiple teachers per year in high school, as you only had each part of the day so I figure it averages out). If you work from 18-65, that's 47 years of employment. Divide the 100k contribution of each teacher by the 47 years of 'use' you gain from their education, and it comes to 2,127 dollars. Now, I'll admit, I don't know what that number means :) But the average teacher is earning somewhere from 1200-1500 per kid per year. That's the closest to a free-market analysis I can come up with, I ain't no economist.

really? This is the level of discourse on a board catering to highly educated scientists?
And who, pray tell, educated us? And let's look at the numbers for the docs... I'm going to assume a motivated student could finish med school by 25 (I know some younger), finish a surgery residency at 30, and I'm going to go ahead and give that surgeon a 300k salary. I know not all do that well, but I think plenty do. Assume they work 30-65, that's 35 years, making 10.5 million lifetime earnings. Doing the same calcs as above, and using a divider of 12 as above (as I would argue your k-12 education is the most valuable portion), and now you get 25k per teacher per year of value to you. If I divide by 20, giving more credit to your college and med school teachers, you still get 15k. So you, sir, should probably be sending your k-12 teachers a check out of appreciation (as should we all).

I'm done rambling. Appreciate the school teachers in our society or watch society crumble around you.
 

vhawk

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WTF are you talking about? The vast majority of teachers work in the public school systems. This is not exactly a free market economy we're talking about here. My wife is about to start looking for a new job in the city where I'm starting residency. With 5 years experience and a master's degree she is going to be "overpaid" to the tune of $39,000 per year. There is no negotiation, there is no way to demonstrate superior skills worthy of superior compensation. That's the salary. In addition, teachers are subject to the whims of government funding. If tax revenues are down, guess what, teachers are laid off or the salary schedule is cut. If population increases without an adequate increase in revenues, they just pack more kids into the classrooms. Teachers aren't paid per student you know... the poor teacher with 36 kids in the classroom makes the same as one with 20.

So, to sum up,



That is exactly the situation. The local government sets the salary. There is no negotiation.
I dont really know what to tell you other than "sorry you are wrong." There are private schools that are free from these government contracts you talk about. And yet they pay LESS than the public schools...and for good reason. The government contracts are bid UP from whatever natural resting point they might have found, due to the EXTREMELY powerful teachers union. Like most unions, this probably does hurt the very best, who would obviously do better to negotiate on their own. But it is almost an absolute certainty that the average teacher would make less money in a freer market.
As above, public school administrators can NOT choose to pay teachers whatever they want. You as an individual, of course, are welcome to pay a teacher whatever you'd like to educate your child, but your statement that 'someone will pay them' turns out in practice to be false.
Yes, it does turn out to be false, but not for the reasons you suspect. It turns out to be false because the assumption "teachers are worth more than they are paid" is false. Teachers are either "worth whatever they get paid" (definitionally) or are almost certainly worth less than they are paid. I mean worth in an economic sense, not in any (useless, arbitrary imo) moral sense.
This is demonstrated by the fact that the vast majority of private schools pay far LESS than public schools. Apparently even the people willing to pay for their children's education aren't willing to pay THAT MUCH for it.
Sad that you realize this and dont understand what it means for your argument. It destroys it.
Again, how is the system 'close' to a free market? And you still haven't defined the 'distortions' that make teachers 'overpaid'. What is your idea of the worth of a teacher? Forget about 'value to society', how much value did YOU receive from your teacher? For shiggles, I did a quick bit of math. The U.S. Census Bureau says the average high school graduate earns 1.2 millions dollars over a lifetime. Divide that by 12 years of education and you get 100k per teacher (I'm ignoring the fact that you had multiple teachers per year in high school, as you only had each part of the day so I figure it averages out).
This is just stunning math, but I have absolutely no idea what it has to do with the discussion. Do you think that the HS grad himself, who earned that 1.2 million, does nothing to earn it? Its all attributable to his education? Pretty silly.
If you work from 18-65, that's 47 years of employment. Divide the 100k contribution of each teacher by the 47 years of 'use' you gain from their education, and it comes to 2,127 dollars. Now, I'll admit, I don't know what that number means :)
It means absolutely nothing. It means about the same as those chain emails where "JFK assassination" has as many letters as "osama bin laden is" or something. Its gobbledygook.
But the average teacher is earning somewhere from 1200-1500 per kid per year. That's the closest to a free-market analysis I can come up with, I ain't no economist.
I understand that, so perhaps you should refrain from using terms like "underpaid" or coming to bizarre conclusions. Or at least, you should be careful to state EXACTLY what you mean by underpaid, or the other terms you use.
And who, pray tell, educated us? And let's look at the numbers for the docs... I'm going to assume a motivated student could finish med school by 25 (I know some younger), finish a surgery residency at 30, and I'm going to go ahead and give that surgeon a 300k salary. I know not all do that well, but I think plenty do. Assume they work 30-65, that's 35 years, making 10.5 million lifetime earnings. Doing the same calcs as above, and using a divider of 12 as above (as I would argue your k-12 education is the most valuable portion), and now you get 25k per teacher per year of value to you. If I divide by 20, giving more credit to your college and med school teachers, you still get 15k.
Again, this is pure nonsense, which I hope you realize.
So you, sir, should probably be sending your k-12 teachers a check out of appreciation (as should we all).
I sent them letters of appreciation, and phone calls. They've been paid for their services already, but the ones who went above and beyond surely deserve extra thanks.
I'm done rambling. Appreciate the school teachers in our society or watch society crumble around you.
lol, well, I'll assume you are no futurist in the same sense that you are no economist.

Its depressing the amount of histrionics I'm getting for trying to bring some rational perspective. THE WORLD WILL END IF YOU DONT PAY TEACHERS MORE [email protected]!!!!111 This is a real argument? I love teachers. I think education is fundamentally important. The program I'm starting is probably the best example of surgical education in the entire country, and that was certainly important to me. My girlfriend of 6 years is a first grade teacher.

None of this turns me into a blabbering fool who cant observe that when you've got twice as many guys capable of the job as you've got jobs available, its going to be pretty hard to drive up wages. I also hope that surgeons continue to make good wages in the future, for obvious self-interest reasons. But nonetheless I'm capable of rationally recognizing that artificial barriers to entry in the form of limited number of residency spots, limited number of med school spots, etc., all play a major role in driving up wages. Plenty of other factors that also impact wages, in positive and negative direction. "If you dont pay surgeons, your arm will fall off!" is not a rational response to the topic.

You seem to be suffering quite badly from a condition where you think the world acts how you wish it did. Thus, since you LIKE teachers, "teachers are underpaid!" and presumably would continue to be underpaid regardless of what they actually made. As if there were some correct value that they "should" be paid. You presumably also think "gas is too expensive!" and "they really ought to do something about that lead paint!" and other inanities. There is an actual way that the world works, and it is independent of how you wish things were. Teachers are not underpaid. It is untenable to argue that they are.
 
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SocialistMD

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I dont really know what to tell you other than "sorry you are wrong."
And it should all just end there, shouldn't it? As I know going into this that no matter what I say or what data I choose to present, you are just right and those who disagree are just wrong. May God bless Reed, Dr. Dunnington and the rest of the staff at SIU in their endeavours to teach you that you are not all knowing and showing you the slightest bit of humility.
That said...

There are private schools that are free from these government contracts you talk about. And yet they pay LESS than the public schools...and for good reason. The government contracts are bid UP from whatever natural resting point they might have found, due to the EXTREMELY powerful teachers union.
Actually, this isn't true. First, the teachers at private schools can (and most do) belong to the NEA, so to say teachers at public schools get some sort of "union" or "lobby" help that private school teachers don't is just incorrect. Yes, there are some local teachers unions, but they aren't universal, so again, one can't paint broad strokes saying the benefits apply to all. The real reason teachers at private schools are paid less is because they (the private schools) do a great job marketing their jobs. Buzz words such as "class sizes < 19," "few behavioral problems" and "educational budget (as in, money given to the teacher to buy classroom supplies)" are worth the $2,000-$3,000/year less they will be earning. Having an emotionally neutral class of 18 students is much less stressful and much easier to teach than a class of 27 students, half of whom are (rightly) on medication. I don't know where your girlfriend teaches, but if it is in the latter school, I'm sure she'd love to hear you claim she is overpaid because of her teacher's union.

Yes, it does turn out to be false, but not for the reasons you suspect. It turns out to be false because the assumption "teachers are worth more than they are paid" is false. Teachers are either "worth whatever they get paid" (definitionally)...
Well, your first definition assumes a free market that doesn't exist outside of your Econ 101 class, so...
...or are almost certainly worth less than they are paid.
...perhaps you should refrain from ...coming to bizarre conclusions. Or at least, you should be careful to state EXACTLY what you mean by underpaid, or the other terms you use.
With no explanation as to why they are worth less than they are paid? I expected more from a man of reason and science, especially one who demands EXACT definitions of "underpaid"...:rolleyes:

Do you think that the HS grad himself, who earned that 1.2 million, does nothing to earn it? Its all attributable to his education? Pretty silly.
Perhaps not, but I do think that you and I owe a considerable amount to our teachers. To discount that is arrogant and naive.

None of this turns me into a blabbering fool who cant observe that when you've got twice as many guys capable of the job as you've got jobs available...
Are there? Is there some national teacher surplus of which I'm unaware? Even though teachers are being fired, I don't think there are as many teachers looking for jobs as there are those who have them.

You seem to be suffering quite badly from a condition where you think the world acts how you wish it did.
Wow. If that isn't the pot calling the kettle black...
 

plauto

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....really? This is the level of discourse on a board catering to highly educated scientists? You basically just said "but what about the children1?!?!?!" I cant think of many coherent definitions of under/overpaid, but one that springs to mind is something like "if it werent for some clearly defined artificial barrier, this person would be making more money." For example, if the government were to pass a law saying that no teacher was allowed to make more than 40k/year, then you could argue that perhaps the best teachers in the country were actually being "underpaid." Since this is not the case, and anyone can choose to pay teachers whatever they want, if there are teachers out there who are actually WORTH 250k/yr, then someone will pay them that. We dont exactly have a purely free market for paying teachers, but its fairly close....and the distortions go to making them OVERPAID, not underpaid.

I guess another "coherent" definition of underpaid is "Man wouldnt it be great if everyone made more money, I mean heck they do interact with THE FUTURE OF AMERICA!" Technically that might be coherent but it sure has a bunch of hilariously devastating consequences, so I think maybe we can reject that. Many things go in to wage competitiveness. Scarcity, desirability, cost of training, etc. I cant imagine how anyone could sit down and rationally consider the situation for teachers, with one of the most powerful unions in America, with relatively little training, with the surplus of capable candidates, and conclude that they are underpaid. It would be almost as preposterous as claiming that physicians are underpaid!

Well, two choices: either they are wrong, or "the service provided by an orthopedic surgeon isnt more valuable to society than the service provided by the garbage man or the librarian or the widget manufacturer." I dont care which one you choose, but you should be upfront about it. What kind of argument are we going to be making here....impassioned emotional pleas for egalitarianism, or logical economic arguments? Scarcity is a major driver of wages.

Well, "one" might think that, but I certainly wouldnt. Nor could I imagine a rational person doing so. Providing something "important" is a minor driver of wages. Although I suppose you could argue that, but then we'd have to get into an argument about what "important" means. I might not even disagree with you if we eventually settled on some definition of "important" that was basically synonymous with "high earning." The best way to find out what is "most important" to people is not by asking them, its by observing them.

Well now thats an understatement. Nor are my interests exactly the same as society's. Nor are yours.
boy do I hope you're going for surgery....one less competitor I need to worry about......:laugh:
 
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