Limiting physician salary

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Tipsy McStagger

Tipsy McStagger

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Not sure if this has been posted.

http://www.forbes.com/sites/peterubel/2012/08/21/its-physician-pay-stupid/

I think I could make an argument for both sides on this one. However, not mentioned in the letter is the cost of medical education in the US vs Germany/Australia etc, and the significant amount of liability.

Also, are there pediatricians earning ~80k per year?

Does anybody know how much physician salary contributes to the cost of care relative to procedures, logistics etc?
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Tipsy McStagger said:
Does anybody know how much physician salary contributes to the cost of care relative to procedures, logistics etc?
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The number I've seen thrown around this board a few times is 6-8%. Physician pay isn't driving health care costs, and cutting salaries isn't going to stop (or even slow) costs from rising.
 
Oh look! Another PCP complaining about specialists making too much. Why is it they always say specialists need to make less rather than that they should be making more?

Take away ALL income by physicians and you still have 90% of the cost. Its NOT the pay stupid.

Edit- I may be a bit sensitive since a FM resident told me just the other day the same thing.
 
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Tipsy McStagger said:
Not sure if this has been posted.

http://www.forbes.com/sites/peterubel/2012/08/21/its-physician-pay-stupid/

I think I could make an argument for both sides on this one. However, not mentioned in the letter is the cost of medical education in the US vs Germany/Australia etc, and the significant amount of liability.

Also, are there pediatricians earning ~80k per year?

Does anybody know how much physician salary contributes to the cost of care relative to procedures, logistics etc?
Click to expand...

Physician's salary is not even close to majority of healthcare cost.

healthcare-spending-breakdown-piechart.png


Other issues are why healthcare costs are skyrocketing.
berwick%20graph.jpg


And for being vastly unhealthier any other countries we only outpace other comparable countries by 4%.
cm20120125ar01c2.png


Here are another couple thoughts:

1. Its MUCH SHORTER to get trained in other countries. Many have college/med school all into one free/cheap program.
2. Physician here work longer hours than elsewhere. The more pts you see, the more money you make.
3. There are more treatments, more medicines, more surgical options. The more we invent/discover, the more healthcare is going to cost.
4. More lawsuits = higher malpractice = higher pay.
5. We have so so many useless hospital admins in the US. They drain the system of money and are not seen in the same volume as in other countries.
 
Yeah, the recent explosion in health care costs is definitely driven by physician salaries. That's why physician salaries have skyrocketed recently.

Oh, wait...
 
The people in the comments section are, for quite possibly the first time in the history of healthcare articles on the internet, mostly right on.

I'm baffled by how a he comes to these conclusions as a physician. Reimbursement to doctors hasn't kept pace with inflation over the last decade. Is he willfully misrepresenting things, or has he just become that far removed from the economic realities of medicine working as a researcher at an academic medical center?
 
The guy who wrote the article comes off as a severely misinformed and bitter primary care physician. Maybe he chose primary care because he loves it and can't live with the fact that specialists are making more than he does. Or he wasn't the brightest student in med school and scored 200 on his step I. :p
 
Tipsy McStagger said:
Not sure if this has been posted.

http://www.forbes.com/sites/peterubel/2012/08/21/its-physician-pay-stupid/

I think I could make an argument for both sides on this one. However, not mentioned in the letter is the cost of medical education in the US vs Germany/Australia etc, and the significant amount of liability.

Also, are there pediatricians earning ~80k per year?

Does anybody know how much physician salary contributes to the cost of care relative to procedures, logistics etc?
Click to expand...

<6% of costs last time I looked it up.
 
Love how he immediately back tracked from his original post once people started calling him out.

One thing I learned about prescription drugs in the US (not verified, but sounds believable): Most/All other countries buy their pharmaceutical drugs at cost from whatever company produces them. Only in the US do we pay above and beyond the cost of the drug, so as to influence additional R&D into future drugs.

I have not verified that statement and it was told to me by an attending I had, but if true, that is outrageous and a huge burden on the US Health system.
 
What a great concept.

But why confine it to medicine? What if nearly everyone worked for half what they currently did and then dropped the price of goods / services appropriately? Then everyone could afford more stuff. Imagine how cheap a cup of coffee would cost at Starbucks? If a cup of coffee costs them ~15-30c so why are we all paying 2-4 dollars? They're ripping us off. In fact, I heard there are kids somewhere on the continent of Africa that are trained baristas working for much cheaper than baristas in the US. Why am I paying more per cup to line their pockets?

/ sarcasm.

This is the sort of entitled logic that blows my mind. Who cares if wages are the driver for increased costs in health care? Payroll is a substantial portion of cost for most industries. Why is it no one is publishing and pushing for political action to lower the salary of execs or engineers at Apple so more people can enjoy their IP and products? By extension, I think an interesting question is, why are physician wages often considered too generous or excessive while other professionals are never even considered? There are many more "essential services" other than health care.
 
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yappy said:
What a great concept.

But why confine it to medicine? What if nearly everyone worked for half what they currently did and then dropped the price of goods / services appropriately? Then everyone could afford more stuff. Imagine how cheap a cup of coffee would cost at Starbucks? If a cup of coffee costs them ~15-30c so why are we all paying 2-4 dollars? They're ripping us off. In fact, I heard there are kids somewhere on the continent of Africa that are trained baristas working for much cheaper than baristas in the US. Why am I paying more per cup to line their pockets?

/ sarcasm.

This is the sort of entitled logic that blows my mind. Who cares if wages are the driver for increased costs in health care? Payroll is a substantial portion of cost for most industries. Why is it no one is publishing and pushing for political action to lower the salary of execs or engineers at Apple so more people can enjoy their IP and products? By extension, I think an interesting question is, why are physician wages often considered too generous or excessive while other professionals are never even considered? There are many more "essential services" other than health care.
Click to expand...

Because people die without medical care dummy!

(sent from my phone)
 
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Druggernaut said:
The people in the comments section are, for quite possibly the first time in the history of healthcare articles on the internet, mostly right on.
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+1, the comments were enjoyable to read for once!

I wonder if this perhaps sheds light on the contrasting demographic trends of forbes' readers vs. NYT's readers.
 
NickNaylor said:
Not going to look to minimize risk of hypertension.

(sent from my phone)
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No they are good. Mostly docs or people who know what's up who are calling out the author. He posted a damn near retraction while fumbling to hold on to his original point. It was a thing of beauty.
 
interesting quote from the comments:
So while UK docs may get paid less than US docs, they are still in the top 1% of UK wage earners.
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Didn't know that.
 
SpecterGT260 said:
No they are good. Mostly docs or people who know what's up who are calling out the author. He posted a damn near retraction while fumbling to hold on to his original point. It was a thing of beauty.
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You mean to tell me that public comments on a news article about physician pay are actually... decent?

:wow:
 
bkprodigy said:
The guy who wrote the article comes off as a severely misinformed and bitter primary care physician. Maybe he chose primary care because he loves it and can't live with the fact that specialists are making more than he does. Or he wasn't the brightest student in med school and scored 200 on his step I. :p
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Don't be a dick, Mr. Class of 2016. I know plenty of people who are interested in entering hospitalist work through IM residencies, which basically amounts to primary care.
 
Blais said:
+1, the comments were enjoyable to read for once!

I wonder if this perhaps sheds light on the contrasting demographic trends of forbes' readers vs. NYT's readers.
Click to expand...

Almost definitely does. Most of those comments almost certainly came from other physicians and it shows the level of understanding of how the healthcare system works. The fact that we have a president who thinks we prefer amputating legs because it pays doctors 50,000 (which is a pure lie) shows how even the best educated graduate from Harvard Law can have such a craptastic misperception of how doctors make money. If the public knew the details they might be more inclined towards sympathy.

I loved the comments and the verbal tongue-lashing that was dished out at this author.
 
I dismiss anything automatically that argues about physician pay which does not address the costs of medical education.

The two are intrinsically coupled (in Europe, in US, and every place that has a medical system), and arguing about changing one while completely ignoring the other means one has failed to do even basic research. This unfortunately is a large problem of 95% of news articles I've read.
 
pkwraith said:
I dismiss anything automatically that argues about physician pay which does not address the costs of medical education.

The two are intrinsically coupled (in Europe, in US, and every place that has a medical system), and arguing about changing one while completely ignoring the other means one has failed to do even basic research. This unfortunately is a large problem of 95% of news articles I've read.
Click to expand...

:thumbup:

Can't change reimbursement if the cost is >300k just to go. And people wonder why there is a PCP shortage with pediatricians making supposedly 80k LMAO. Don't know where he got that number, but I highly doubt numbers are truly that low...
 
evilbooyaa said:
:thumbup:

Can't change reimbursement if the cost is >300k just to go. And people wonder why there is a PCP shortage with pediatricians making supposedly 80k LMAO. Don't know where he got that number, but I highly doubt numbers are truly that low...
Click to expand...

I think 80k may be reasonable if it's part-time Peds with little or no call.
 
If people are truly concerned with physician salaries, perhaps -while we're at it- we can also address the litigious nature of the country today? I think where lawsuits are concerned, the English model of 'Loser Pays' might be appropriate. Simplistically stated it means that the party who loses the lawsuit is thereby responsible for the other party's court and attorney fees. Maybe this would drive down the cost of insurance and save time in the process.

Whatever our problems I don't see an easy or quick solution, but then again I'm just being born into this culture so I've got a lot to learn...

Thanks for the comments.
 
pkwraith said:
I dismiss anything automatically that argues about physician pay which does not address the costs of medical education.

The two are intrinsically coupled (in Europe, in US, and every place that has a medical system), and arguing about changing one while completely ignoring the other means one has failed to do even basic research. This unfortunately is a large problem of 95% of news articles I've read.
Click to expand...

The cost of your salery is isn't coupled to the cost of your education. If it was then the guys getting doctorates in poetry, or low end Law Degrees, (many of them also paying 300K) would also be making physician salaries. They are, instead, unemployable at any price.
 
Nice straw man, dummy!

Take a thinking break sometime between memorizing your power point lectures.

NickNaylor said:
Because people die without medical care dummy!

(sent from my phone)
Click to expand...
 
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Perrotfish said:
The cost of your salery is isn't coupled to the cost of your education. If it was then the guys getting doctorates in poetry, or low end Law Degrees, (many of them also paying 300K) would also be making physician salaries. They are, instead, unemployable at any price.
Click to expand...

People pay 300K to get a doctorate in poetry?...that is dedication.

Tipsy McStagger said:
If people are truly concerned with physician salaries, perhaps -while we're at it- we can also address the litigious nature of the country today? I think where lawsuits are concerned, the English model of 'Loser Pays' might be appropriate. Simplistically stated it means that the party who loses the lawsuit is thereby responsible for the other party's court and attorney fees. Maybe this would drive down the cost of insurance and save time in the process.

Whatever our problems I don't see an easy or quick solution, but then again I'm just being born into this culture so I've got a lot to learn...

Thanks for the comments.
Click to expand...

Or just go to Texas's model. Cap all non-economic damages at 250K and wrongful death at 500K. Most malpractice settle before it gets to court (to prevent multi-million dollar verdicts). So regardless of the doctor's fault, the plaintiff often "wins."

The plaintiff can never settle for 50K or less because it cost tens of thousands of dollars for med expert review and the attorney needs his cut. In other words the case "costs" 30-50K to just review, produce, and file suit. Therefore, in Texas a much high percent of cases will go to trial. I think this a generally good thing.


Here is the problem in your idea...in Texas the insurance rate have dropped but most of the "savings" are actually retained by insurance companies as profit. Therefore, while it does reduce cost a tiny bit, most of those savings are actually never benefiting the system as a whole.
 
lol

You may be right. Judging from our post-count-# I may have underestimated his devotion to winning on-line arguments. But the truth remains - he ignored the last sentence in my original post and went on to make an inappropriate statement. Many other essential services don't face the same criticisms that physician salaries do in media.


Blais said:
Stepping up on NickNaylor?

You're gonna have a bad time.
Click to expand...

I think that any savings made in medical costs should be gained via making the system more efficient. The worst waste IMO occurs inside inpatient settings where administrative positions have ballooned in response to the amount of rules hospitals must follow to receive reimbursement from 3rd party payers. Aside from the high overhead costs at hospitals due to regulation there are also overhead costs built into 3rd party payers' business model. None of these costs go to patient care. I think it would be interesting to see what percentage of every dollar actually makes it to paying for direct patient care. Why not look for savings in efficiency before deciding to arbitrarily cut the earnings of the value adding labor?
 
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Perrotfish said:
The cost of your salery is isn't coupled to the cost of your education. If it was then the guys getting doctorates in poetry, or low end Law Degrees, (many of them also paying 300K) would also be making physician salaries. They are, instead, unemployable at any price.
Click to expand...

Pretty sure most PhD programs pay you to get your PhD and not the other way around
 
notbobtrustme said:
For science PhDs, sure, but not for most other doctorate programs.
Click to expand...

Yes for most other PhD programs. Most non-science PhDs will be funded through a teaching associateship, assuming no research funding.

And "coupled" may be a poor word choice, but of course the board of directors for med schools are sitting back thinking "they will be able to afford it with their salaries" - so of course physician salary and tuition are related.
 
financial 101, bro.

MD brown analysis is full of holes. Keep it real.

I did my own financial analysis in excel.

If you assume 200k-300k salary, current tax structure, and <180k debt, and sensible living till your student loans are taken care of you'll be just fine. If these parameters goes too far outside of previously mentioned figures things get more hairy.

ClemsonFirst said:
http://acutecareinc.files.wordpress.com/2008/09/doctor_salary1.gif

A doctor who talked to my class once showed us this. It's pretty wild to see how UPS driver and physician compare.
Click to expand...

EDIT: +1 to phd programs providing a stipend.
 
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yappy said:
financial 101, bro.

MD brown analysis is full of holes.

I did my own financial analysis in excel.

If you assume 200k-300k salary, current tax structure, and <180k debt, and sensible living till your student loans are taken care of you'll be just fine. If these parameters goes too far outside of previously mentioned figures things get more hairy.



EDIT: +1 to phd programs providing a stipend.
Click to expand...

Of course. The MD UPS study is only one set of parameters. But It just goes to show that it can happen. I'm not saying you will be broke, just there are other ways to make money if that is what you are looking for. Also, never took finance 101.
 
You're right. There are lots of ways to make a buck. My experience with UPS was a lot of hard labor for low (minimum) pay for the hope that if I worked there for 5+ years I might get one of the lucrative driving jobs and never be laid off / injured / or have the company go under.

What I was getting at about finance 101 (silly expression in retrospect) was that using current MGMA information for internal medicine, and state school for educational costs, it works out better than Brown MD suggested.

ClemsonFirst said:
Of course. The MD UPS study is only one set of parameters. But It just goes to show that it can happen. I'm not saying you will be broke, just there are other ways to make money if that is what you are looking for. Also, never took finance 101.
Click to expand...
 
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SpecterGT260 said:
Your ability to graph untrue relationships doesn't make this untrue
Click to expand...

This is true...but this whole UPS driver vs physician thing is b.s. Whomever is spewing this crap shouldn't ever try to publish any research, they stretch facts while minimizing inconvenient truths.

I don't have time to debunk it step by step but I'd like to point out his graph has the 18-19yo making 100K....sounds right to me :rolleyes:.
 
link2swim06 said:
This is true...but this whole UPS driver vs physician thing is b.s. Whomever is spewing this crap shouldn't ever try to publish any research, they stretch facts while minimizing inconvenient truths.

I don't have time to debunk it step by step but I'd like to point out his graph has the 18-19yo making 100K....sounds right to me :rolleyes:.
Click to expand...

same as the 100k debt post med school ;)

Sure, the actual numbers may not fall that way. UPS drivers DO make a very nice living given their level of training and education. However it isnt like everyone who wants it can do it. UPS has waiting lists and whatnot. The point is, it takes many years before physicians can break even of their debt. It looks like UPS drivers make about 50k/year. With medical debt being closer to 250k and, after interest, total payoff being around 400k or more... the "years till even" may be much closer to that graph than you make it out to be.
 
IDBasco said:
Oh look! Another PCP complaining about specialists making too much. Why is it they always say specialists need to make less rather than that they should be making more?

Take away ALL income by physicians and you still have 90% of the cost. Its NOT the pay stupid.

Edit- I may be a bit sensitive since a FM resident told me just the other day the same thing.
Click to expand...

100% agree. you can force doctors to work for free, and you are still looking at billions and billions of dollars in healthcare. Let's see-if we stop being PC and stop treating 95 year olds in the ICU for months, or giving transplants/surgeries for 99 year olds, and other crazy care, maybe we'll get spending under control.

But no, God forbid we actually were ALLOWED to act like doctors and DETERMINE care vs. what the family wants. Right, because if we actually are doctors and determine care, we can piss off the families and be held liable and get sued. Awsome!!! But sure, let's cut doctor pay, that will surely fix the problem.

Our salaries are shrinking so much that i's becoming less and less financially sensible to go into medicine. I was looking at yahoo today and it was talking about marketing managers making 200k, biomedical engineers 160k, etc. Why go through all this training and be exposed to such liability when you can get a 4 year degree and make the same?! It's crazy.

And it's annoying to see PCP people complain. Sure they are not the most well paid people in the world, but a lot of their job can be done with FAR less training.

And it's ridiculous to look at our salaries and compare them to other countries without looking at the whole picture. I would think that a doctor would realize that. Most professions in other countries make far less than here, but doctors are always at the top. Sure German doctors may not make 186k like here, but their engineers also don't make 100k like they do here, and so forth. Comparatively, physician salaries are some of the highest salaries among professionals. Let's not even talk about the fact that in a country like France, doctors work about 35 hours, have 6 weeks vacation, and most of Europe has minimal liability and free medical education. But let's not talk about that of course!

It's very frustrating when people who should be smart like physicians don't even look at the whole picture.
 
When I hear people calling for reduced physician salaries/re-election of Obama, it worries me as a future patient and as a family member of patients, not just as a future doctor. Talented and intelligent people will not go into medicine if salaries get much lower than they are now. People who are at the top intellectually will know that they can be better compensated in other fields, and possibly with less effort and work. I worry that some people do not understand how critical it is that doctors be intelligent. I know that right now it is not PC to mention that people have different levels of intelligence, but it is true and is very important. It will be scary if the liberals/socialists in this country drive the best people out of medicine.
 
SpecterGT260 said:
same as the 100k debt post med school ;)

Sure, the actual numbers may not fall that way. UPS drivers DO make a very nice living given their level of training and education. However it isnt like everyone who wants it can do it. UPS has waiting lists and whatnot. The point is, it takes many years before physicians can break even of their debt. It looks like UPS drivers make about 50k/year. With medical debt being closer to 250k and, after interest, total payoff being around 400k or more... the "years till even" may be much closer to that graph than you make it out to be.
Click to expand...

I hear ya, I am not trying to say being a physician is the most financially rewarding job out there.

But lets agree this whole UPS vs MD lifetime pay thing is ridiculous. I applied to UPS early in undergrad. They had a waiting list for months to even get a $8 / HR ****TY ASS JOB. I was told on the interview that you had to work there for YEARS for a CHANCE to become a driver. Not to mention your body would break if you tried to deliver packages for 12-14 hours a day (MD hours).

This whole UPS thing must have been made by some bitter guy who wished he went into investment banking. There are careers with less training which outpace medicine financially, UPS is not one of them.
 
The UPS-MD analysis is full of errors.

1. It assumes that one can become a truck driver right after graduating high school. This is not true. I have a couple of friends who work at UPS. They told me that one needs to work in the warehouse, loading and unloading trucks and making $9/hr, for 6-8 years before becoming a candidate for the position.

2. It assumes that truck drivers do this job for 25+ years. Have you ever seen a truck driver who's over 50 years old? I haven't.

3. It assumes that truck drivers are paid 100K/year. Most make around 70K/year.
 
link2swim06 said:
I hear ya, I am not trying to say being a physician is the most financially rewarding job out there.

But lets agree this whole UPS vs MD lifetime pay thing is ridiculous. I applied to UPS early in undergrad. They had a waiting list for months to even get a $8 / HR ****TY ASS JOB. I was told on the interview that you had to work there for YEARS for a CHANCE to become a driver. Not to mention your body would break if you tried to deliver packages for 12-14 hours a day (MD hours).

This whole UPS thing must have been made by some bitter guy who wished he went into investment banking. There are careers with less training which outpace medicine financially, UPS is not one of them.
Click to expand...

you beat me to it
 
Part One

How low will physician wages go, exactly. I mean... looking through Meritt Hawkings I see a position, for example, where a GI doc starts out @ 500k with the potential to make 700k in the SW. Is this normal for physicians or is this considered to be a low wage?

http://www.merritthawkins.com/job-search/job-details.aspx?job=11172&contract=164110

EDIT:

Okay... here is one a little on the low side. Internal medicine in the midwest for 225k starting salary.

http://www.merritthawkins.com/job-search/job-details.aspx?job=11203&contract=162323

If you run taxes on that income, married w/ 2 dependents, you get $13,825.37/month. Assuming 6.8 interest with 180k in debt one could pay off the student loans in 24 months @ 8042.75/month and still have 5782.62 of post tax income to live off of. Not bad... nothing like the GI though.

After running that calculation it seems that a great position to be in is to graduate with less than 180k of debt and make 300k+ after residency. If one can do that the student loans could be paid back in a little over a year while still enjoying a 5k/month post tax income. Realistic?

________________________

Part Two

Last night I read an interesting blog on this subject. The physician blogger suggested that the reason there is such a focus on physician income is because a physician has close interaction with people from an array of different socioeconomic groups. The positioning of an ER physician next to a poor family shows a stark contrast in life styles; however, most other professions are insulated from interacting with people who are lower on the economic ladder. The blogger then concluded that this results in an "out of sight out of mind" phenomenon where CEO's, high profile layers, contractors, accountants etc. all fly under the radar. Do you think there is much merit to that?
 
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link2swim06 said:
I hear ya, I am not trying to say being a physician is the most financially rewarding job out there.

But lets agree this whole UPS vs MD lifetime pay thing is ridiculous. I applied to UPS early in undergrad. They had a waiting list for months to even get a $8 / HR ****TY ASS JOB. I was told on the interview that you had to work there for YEARS for a CHANCE to become a driver. Not to mention your body would break if you tried to deliver packages for 12-14 hours a day (MD hours).

This whole UPS thing must have been made by some bitter guy who wished he went into investment banking. There are careers with less training which outpace medicine financially, UPS is not one of them.
Click to expand...

how did what I say not demonstrate that I already knew this? Waiting lists.... I didnt put it in all caps or anything... but acknowledged outright that it wasn't as if all you had to do was put on some brown shorts to get the driving job.
 
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