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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 t
by 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.