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Before making a judgement on whether doctors are overpaid or not, I’d kinda like to see an analysis on the value doctors provide. For instance, how much does an

Before making a judgement on whether doctors are overpaid or not, I’d kinda like to see an analysis on the value doctors provide. For instance, how much does an average doctor’s treatment affect the economic productivity of all her patients in aggregate? If patients would produce substantially less without treatment, and she sees many patients, a high salary is much more justifiable. If you’re not keen on analyzing things strictly in terms of GDP, how much does an individual doctor influence quality of life, happiness, lifespan, etc? Again, an outsized effect warrants an outsized compensation. Of course, value is quite difficult to assess - especially added value versus alternatives (I.e. online self-diagnosis) - but it’d be interesting to see.

hn_throwaway_99 9y ago
But the main argument is that US health outcomes, with their much higher costs, are not better than the outcomes in other developed countries with much cheaper costs, and there are lots of studies to back that up. Seems like you can skip all the analysis you are asking for, at least as long as salaries in the US are much higher than elsewhere without commensurate improvement in health outcomes.
- beisner 9y ago
  I think comparing salaries across the world isn't really a good way to measure whether a provider is "overpaid" or not. If you're just looking at contribution to well-being and human happiness, that way of looking at things might be valid, but even if well-being/happiness outcomes in different healthcare markets are equal, productivity outcomes might be quite different. Americans work longer hours than in the countries outlined in the article, resulting in significantly higher annual productivity per capita compared to other countries. From a labor economics perspective, doctors in the US therefore might (again, depending on real metrics that I'd like to see) contribute more in absolute terms to GDP than doctors in other countries. Additionally, it might be the case that, relative to their productivity, doctors in other countries might be significantly underpaid. This sort of distortion happens in many other industries. Software, for instance, is notorious for this. Internationally, people might look at US software engineering salaries and balk at how high they are compared to the rest of the world, and might make the judgment that US software engineers are underpaid. But if you look at the profit per employee at leading tech companies, that figure dwarfs engineer salaries (e.g. Facebook's profit per employee is north of $400,000/year, Google's is similar). So, relative to value delivered, many software engineers in the US are actually underpaid. This implies that software engineers abroad are significantly underpaid, as they often work for the same multinationals doing the same sort of work. At the end of the day, salaries are determined by all kinds of factors, including competition, regulation, value generated, etc. I think that real value added is the only way to determine if a position is overpaid, and comparing to other systems doesn't really help us evaluate that.
- bluetwo 9y ago
  I see what you are saying but there are two different issues at hand and two different solutions.

hn_throwaway_99 9y ago

But the main argument is that US health outcomes, with their much higher costs, are not better than the outcomes in other developed countries with much cheaper costs, and there are lots of studies to back that up. Seems like you can skip all the analysis you are asking for, at least as long as salaries in the US are much higher than elsewhere without commensurate improvement in health outcomes.

beisner 9y ago
I think comparing salaries across the world isn't really a good way to measure whether a provider is "overpaid" or not. If you're just looking at contribution to well-being and human happiness, that way of looking at things might be valid, but even if well-being/happiness outcomes in different healthcare markets are equal, productivity outcomes might be quite different. Americans work longer hours than in the countries outlined in the article, resulting in significantly higher annual productivity per capita compared to other countries. From a labor economics perspective, doctors in the US therefore might (again, depending on real metrics that I'd like to see) contribute more in absolute terms to GDP than doctors in other countries. Additionally, it might be the case that, relative to their productivity, doctors in other countries might be significantly underpaid. This sort of distortion happens in many other industries. Software, for instance, is notorious for this. Internationally, people might look at US software engineering salaries and balk at how high they are compared to the rest of the world, and might make the judgment that US software engineers are underpaid. But if you look at the profit per employee at leading tech companies, that figure dwarfs engineer salaries (e.g. Facebook's profit per employee is north of $400,000/year, Google's is similar). So, relative to value delivered, many software engineers in the US are actually underpaid. This implies that software engineers abroad are significantly underpaid, as they often work for the same multinationals doing the same sort of work. At the end of the day, salaries are determined by all kinds of factors, including competition, regulation, value generated, etc. I think that real value added is the only way to determine if a position is overpaid, and comparing to other systems doesn't really help us evaluate that.
bluetwo 9y ago
I see what you are saying but there are two different issues at hand and two different solutions.