Next time someone complains about doctors making too much.....

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Link them this article:

http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?_r=0



One sentence summary: a drug used to treat malaria and toxoplasmosis has, after being acquired by a new manufacturer, gone from a price of $~13 per pill to $~750.
People who complain that doctors' wages are a cause of healthcare disaster are ignorant of basic healthcare economics. Heck, even reading the news will dismiss that as a myth.

What is important to realize is that the fundamental structure of the US healthcare system is severely flawed. Right now, it seems like the most effective remedy is in fact single-payer, universal healthcare according to various reports in the New York Times (as you linked), WHO, Medscape, Economist/Wall Street Journal/Financial Times etc. I doubt that insurance fragmentation and Medicare deregulation will repair the current crisis (instead, it will be far far worse than pre-ACA/Obamacare era).

As I mentioned elsewhere, I will create a whole new thread about this once I get everything sorted out. But it is very clear that doctors' wages are not contributing to the ills of US healthcare.
 

Lannister

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It's sad that big guys like Martin Shkreli play their games and make their millions of dollars with complete disregard for the little guy. No one thinks about anyone but themselves.

Thanks for sharing the article. It was educational.
 
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Justtheworst

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The thing is that the people tend to believe that doctors are directly benefiting from pharmaceutical companies (I suppose some doctors are). It's a battle that really can't be won unless there is a very big change in the way people look at medicine in General.
 

Azete

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Pharmaceuticals are obviously a much bigger component of healthcare costs, but that doesn't mean salaries aren't inflated. In my former career I spent over a year as a consultant with a large network of hospitals in Pennsylvania, and I understand very well how their profit models work.

A kid that breaks his leg playing sports will easily incur a bill over $30,000 after surgery. A visit with a cardiologist (or any specialist) and a stress test or echo will cost over $3500. A 15 minute ER visit that doesn't even result in seeing a physcian or any testing will still cost over $500. So, while outrageous pharmaceutical prices obviously contribute to high insurance bills, healthcare is still unaffordable when all those variables are removed.

Why are the costs so high? When hospitals formulate their models, they have to do so with extraordinarily high fixed costs (read: salaries). The need to accrue a certain amount of revenue every month just to cover non-variable costs -- most of the time this doesn't even include doctors. They also need to do this under the assumption that a certain number of patients will never pay their bill (yes, part of your bill is to cover for the guy that won't pay his). They also need to make a certain amount of money per year to cover ammortization and depreciation of the hundreds of millions of dollars of equipment they buy. After all this, physician bills are added on TOP of those prices, which are also inflated because even when a patient doesn't pay, the doctor still receives his share and that needs to be accounted for. Finally, they add a percentage to all this so they can make a profit.

I am a big believer in a free market economy, but in healthcare it doesn't make much sense. When you have medical schools, medical equipment companies, pharmaceutical companies, hospitals, lenders, and insurance companies all needing to make a profit, it has a snowball effect that makes the end-consumer cost unaffordable. The U.S. spends more, as a total dollar amount, per capita, and as a percentage of GDP on healthcare than any other developed country on earth. Yet, almost all objective rankings for efficiency do not rank us in the top 10.

Salaries in healthcare (including doctors) are absolutely too high, but this can't change unless there's a complete overhaul to the system. You can't ask someone to incur 10 years and $500k worth of training costs to only make $80k. Most (I hope) doctors join medicine to help people, but they're also not stupid and won't subject themselves to a lifetime of poverty to do it. Allow any healthcare provider to exit their training with zero debt and I think they'll be more amicable toward a significant reduction in pay.
 

cantankerous

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"next time someone complains about doctors making too much"
for some reason, I don't ever see anybody on this site with this complaint
 

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Pharmaceuticals are obviously a much bigger component of healthcare costs, but that doesn't mean salaries aren't inflated. In my former career I spent over a year as a consultant with a large network of hospitals in Pennsylvania, and I understand very well how their profit models work.

A kid that breaks his leg playing sports will easily incur a bill over $30,000 after surgery. A visit with a cardiologist (or any specialist) and a stress test or echo will cost over $3500. A 15 minute ER visit that doesn't even result in seeing a physcian or any testing will still cost over $500. So, while outrageous pharmaceutical prices obviously contribute to high insurance bills, healthcare is still unaffordable when all those variables are removed.

Why are the costs so high? When hospitals formulate their models, they have to do so with extraordinarily high fixed costs (read: salaries). The need to accrue a certain amount of revenue every month just to cover non-variable costs -- most of the time this doesn't even include doctors. They also need to do this under the assumption that a certain number of patients will never pay their bill (yes, part of your bill is to cover for the guy that won't pay his). They also need to make a certain amount of money per year to cover ammortization and depreciation of the hundreds of millions of dollars of equipment they buy. After all this, physician bills are added on TOP of those prices, which are also inflated because even when a patient doesn't pay, the doctor still receives his share and that needs to be accounted for. Finally, they add a percentage to all this so they can make a profit.

I am a big believer in a free market economy, but in healthcare it doesn't make much sense. When you have medical schools, medical equipment companies, pharmaceutical companies, hospitals, lenders, and insurance companies all needing to make a profit, it has a snowball effect that makes the end-consumer cost unaffordable. The U.S. spends more, as a total dollar amount, per capita, and as a percentage of GDP on healthcare than any other developed country on earth. Yet, almost all objective rankings for efficiency do not rank us in the top 10.

Salaries in healthcare (including doctors) are absolutely too high, but this can't change unless there's a complete overhaul to the system. You can't ask someone to incur 10 years and $500k worth of training costs to only make $80k. Most (I hope) doctors join medicine to help people, but they're also not stupid and won't subject themselves to a lifetime of poverty to do it. Allow any healthcare provider to exit their training with zero debt and I think they'll be more amicable toward a significant reduction in pay.
Debt and salaries have nothing in common. Why should i have a pay cut if I'm not even in school anymore? Salaries depend on value added and the job market. Also we are physicians, not "healthcare providers"
 

Azete

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Debt and salaries have nothing in common. Why should i have a pay cut if I'm not even in school anymore? Salaries depend on value added and the job market. Also we are physicians, not "healthcare providers"
The point was physician receptivity to reduced salaries in a theoretically altered healthcare system. By "healthcare providers" I'm including everyone that works in a hospital, including administrators -- all of which are overpaid by any value added metric. If I was talking about doctors specifically, I would have said so.
 

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The point was physician receptivity to reduced salaries in a theoretically altered healthcare system. By "healthcare providers" I'm including everyone that works in a hospital, including administrators -- all of which are overpaid by any value added metric. If I was talking about doctors specifically, I would have said so.
Administrators are not healthcare providers. Which value added metric are you using? Can you share your data? Why should physicians be receptive to reduced salaries?
 

Azete

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Administrators are not healthcare providers. Which value added metric are you using? Can you share your data? Why should physicians be receptive to reduced salaries?
If you want to have a numbers discussion PM me.
 

StudyLater

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But yeah. Doctors need to take a pay cut because they make too much. :rolleyes:
It could be helpful.

That's hilarious. We already have the non-profit malaria vaccine. http://magazine.good.is/articles/malaria-vaccine-no-profit
Now instead of exorbitant dividends top officers can have exorbitant salaries. I like it.

You know, if doctors start making less, that means that the people that complain about them will start making more money. Oh wait...
Both should make less. So the money can go to the patient, who knows how to use it more wisely.

It's sad that big guys like Martin Shkreli play their games and make their millions of dollars with complete disregard for the little guy.
Sad? Or financially sound?

No one thinks about anyone but themselves.
Oh come on, this view is so one-sided. Plenty of people think about others when they stand to profit from thinking of others.