5 ms·

Fascinating. I have some questions I'm hoping you can answer. Can you speak to the narrative of administrative bloat in US hospitals? Are doctors paid relativel

Fascinating. I have some questions I'm hoping you can answer. Can you speak to the narrative of administrative bloat in US hospitals? Are doctors paid relatively less in other countries? And is there any chance that the high pay is needed to counter-act overly stressful working conditions in the US (vs., say, the UK's NHS?) I'm also curious about doctors' personal expenses. If most of their salary is going towards rent or homeownership, short of situating a hospital on something like a kibbutz... maybe there is some sort of rent subsidy -- or tax break for landlords that give a 10% rent discount / for banks that give a medical professionals low interest home loans -- that could be enacted. It could allow doctor's effective salaries to stay the same, but medical prices to drop? I'm afraid you are going to say that doctor's biggest personal expense is student loans for medical school! If medical-school-debt were to be wiped out, do you know how much salaries could drop in terms of objective price without changing doctor's effective income?

tkahnoski 5y ago
Another factor is not all doctor salaries are the same. Anesthesiologist 400k, Family practice or OB/GYN 200k. Anesthesiologist is buying a lamborghini, the family practice person needs a few years before they can entertain buying a house.
- tastyfreeze 5y ago
  Any idea why there aren't more people training to be anesthesiologists? A salary like that is a strong incentive for people to enter the professions. Or is this more of a training lag problem where it takes 12-14 years for a labor shortage signal like high salary to start being satisfied by new anesthesiologists?
  - cyberge99 5y ago
    If I’m not mistaken they pay huge malpractice insurance amounts because a misdiagnosed dosage of a lethal chemical (sedative, anesthesia) can be, well, lethal.
  - conanbatt 5y ago
    Skill markets are not very efficient: not all developers jump to blockchain or ML for example. Also there tends to be limits on how many slots for residences and practices there are for different specialties: the system is purposefully capped to make sure that there aren't too many doctors. The way to skip all of this is massive de-reg.
    - lostphilosopher 5y ago
      What are the government regulations that drive this? (If that’s what you mean?)
      - conanbatt 5y ago
        You can only practice medicine if you studied in the US. No doctor in the world can practice medicine in the US without having to re-certify their knowledge. Also, education is closely tied with government funding, so it's impossible to bootstrap a college or university to cheapen the cost of education. Thus you can only go all-in to medschool. This is not 100% accurate, there are some alternatives like PA's and NP's. So the current system can absorb only so much. There are also specific funding rules for residencies, which mean that the amount that is given is done based on gov funding.
  - huitzitziltzin 5y ago
    Generally residency spots are limited. This creates a scarcity which keeps prices high. I doubt the claim of the commenter below who argues that it is malpractice insurance. There are by now plenty of “tort reform” states where malpractice payouts are capped. I would be very surprised if anesthesiology prices are any lower in those states.
    - tsol 5y ago
      Yep-- you get to choose your specialty in the sense that you get to choose which residency programs you apply to. There are limited spots and in reality people have to choose from what's available
      - tastyfreeze 5y ago
        Is there policy enforcing a limit on residency spots? Or is that just how many people can be trained with available teaching facilities?
stonemetal12 5y ago
The relative difference in pay between US and UK docs is 3x(in favor of US docs). In most cities across the US Drs live in the wealthiest neighborhoods, they don't need housing help. The main problem in the US is headcount, there just aren't enough Drs to go around, as such salaries are driven sky high.
- YossarianFrPrez 5y ago
  Ah, interesting. Is this related to the fact that there was a cap on the number of funded residencies? [0] Or maybe there was some other cap in the graduate medical education system between the '70s and the 90's... I have a vague recollection of reading something about this. [0] https://www.ucop.edu/federal-governmental-relations/_files/fact-sheets/fgr-health-factsheet-gme-f1.pdf https://www.ucop.edu/federal-governmental-relations/_files/f...
huitzitziltzin 5y ago
- Cross-country administrative bloat is not a literature i know, if it even exists. As a complicating factor, I don’t know if we have too many or they have too few. Probably us too many, but relative to what exactly? That’s hard to say. - doctors in the US are paid relatively more, generally by A LOT, but the only data I know about this is old. US doctors are not that enthused about hearing they should be paid less. - as another commenter notes, we have fewer doctors and fewer hospital beds than most other OECD countries. - related: despite what you may hear, our utilization is lower than most other oecd countries. (At least in the following dimensions: hospital visits are less frequent and are shorter.) - I don’t know of good data about doctors’ personal expenses. But there is a paper from a few years ago which looked at labor department data and found that a decent fraction of the top 1% of the income distribution in the US was made up of doctors. I may be able to find that reference and the fact I’m citing may be misremembered. - sure, doctors do have high medical school expenses and debt here relative to other countries but for anyone who is not in primary care, it’s not going to take that long to retire the debt. There are multiple specialties which pay north of $400,000 per year. - I do not think doctors’ salaries are related in a meaningful way to their debt. Which is to say: if you canceled all medical school debt tomorrow, prices for physician services would decline by about 0%. Those costs are sunk. They are not going to have a large effect on prices.
- YossarianFrPrez 5y ago
  Great, thanks for the detailed response. Makes me wonder about if the supply of doctors in the US been artificially constrained to inflate salaries.
  - huitzitziltzin 5y ago
    Ooh I love easy questions! The answer to this one is yes! You can thank the American Medical Association.
    - YossarianFrPrez 5y ago
      So much for the hippocratic oath :( It also makes me think that quantifying the secondary health effects of medical debt induced bankruptcy and other harms might not be a bad idea for a paper. Specifically comparing that against the benefits from said healthcare in the first-place. I imagine someone has already done this?
conanbatt 5y ago
> Can you speak to the narrative of administrative bloat in US hospitals? Admin bloat is a consequence of having too few doctors, and also legal requirements on how visits have to be handled in the US. For each medical visit you get at least 10~15m of recording the visit. A doctor without any help would spend around half the time talking to a patient, and half the time filling out charts for insurance and legal requirements. Thus to make money you need to delegate all those tasks as much as possible, and you get to a point where some hospitals even offer a full medical assistant per provider. To solve this you need to have way more doctors, and a lot less medical liability from a legal standpoint. For example, you cant have paper charts in the US, which is standard in many other first world countries. Billing is also a very expensive source of admin work. You have to have a perfect pipeline for billing to have high collections, then you have issues collecting the money months after that is settled, etc etc. Many ways to solve this one, but partially solved by moving a lot of expenditures to cash-based payment. You can save all of this in a cash-based system. Alternatively you could have competition in the insurance market, but although that could improve things, in the end, you still need to write medical and administrative work to get paid. This problem also exists in many other countries. > Are doctors paid relatively less in other countries? The Gross income of physicians in the US is surely the highest in the world. But gross is gross. At those levels taxation approaches 50%, and medical education can cost half a million dollars. Its a perverse system where you pay a lot to a ticket to earn a lot, but you get collected all the way to the bank. And if you dont make it, you fail really hard. Primary care physicians are the lowest paid in the us and have an abnormally high suicide rate. > And is there any chance that the high pay is needed to counter-act overly stressful working conditions in the US (vs., say, the UK's NHS?) High pay is a simple result of too few physicians. But what goes to physicians directly is a smaller part of spending: only about 10% of spending goes directly to physicians. You can make it better, but I think its likely they want better working conditions over money, its just not an option in this market structure. You cant operate part time, or with 30min appointments, without charging patients above insurance levels. (example, OneMedical, Concierge medicine, parsley, etc). > I'm also curious about doctors' personal expenses. If most of their salary is going towards rent or homeownership, short of situating a hospital on something like a kibbutz... maybe there is some sort of rent subsidy -- or tax break for landlords that give a 10% rent discount / for banks that give a medical professionals low interest home loans -- that could be enacted. It could allow doctor's effective salaries to stay the same, but medical prices to drop? This market structure needs less rules, not more rules. I have NEVER seen a market so captured as this one, and its captured by everyone in some way. Every single actor in this market is using government to get something from someone else, including patients, insurance takers, physicians, admin, pharma, gov. Literally everyone. > I'm afraid you are going to say that doctor's biggest personal expense is student loans for medical school! If medical-school-debt were to be wiped out, do you know how much salaries could drop in terms of objective price without changing doctor's effective income? Causal relationship is backwards here. Salaries are not high because medical debt is high. Salaries are high because there are too few doctors, because it is too expensive to get an education for it. If you wipe out medical debt, you are assisting the ones that made it over, but not all the ones that could not make it in the first place. To reduce the cost of education you need to do a few things: 1- eliminate federal funding for education, that makes it only "approved" universities be able to provide limited slots. 2- Eliminate or reduce the cost of licensing. In the us you need a license per state to practice medicine, and it is very stringent. If it were handled like a legal bar exam instead, you would put significant pressure in the college system while also allowing for independent education to ocurr. 3- Allow medical degrees from other countries to practice in the US. This would leave the option for doctors to study abroad for nearly free and come back and practice.
pmyteh 5y ago
FWIW working conditions in the NHS are (also) very stressful, largely because the system is cash-constrained and runs heavily on staff goodwill. And, while the shenanigans of brutal corporate management are largely absent, the shenanigans of continuous politically-motivated reorganisation and contracting out are not. Don't get me wrong, I'm a big fan of the NHS. It's humane, generally provides very good care, and (in comparative terms) is cheap. It'd be a happier place if it wasn't permanently having to handle demand increasing faster than budget.
- huitzitziltzin 5y ago
  It’s very very very hard to get single payer right. That’s a fact.

tkahnoski 5y ago

Another factor is not all doctor salaries are the same. Anesthesiologist 400k, Family practice or OB/GYN 200k. Anesthesiologist is buying a lamborghini, the family practice person needs a few years before they can entertain buying a house.

tastyfreeze 5y ago
Any idea why there aren't more people training to be anesthesiologists? A salary like that is a strong incentive for people to enter the professions. Or is this more of a training lag problem where it takes 12-14 years for a labor shortage signal like high salary to start being satisfied by new anesthesiologists?
- cyberge99 5y ago
  If I’m not mistaken they pay huge malpractice insurance amounts because a misdiagnosed dosage of a lethal chemical (sedative, anesthesia) can be, well, lethal.
- conanbatt 5y ago
  Skill markets are not very efficient: not all developers jump to blockchain or ML for example. Also there tends to be limits on how many slots for residences and practices there are for different specialties: the system is purposefully capped to make sure that there aren't too many doctors. The way to skip all of this is massive de-reg.
  - lostphilosopher 5y ago
    What are the government regulations that drive this? (If that’s what you mean?)
    - conanbatt 5y ago
      You can only practice medicine if you studied in the US. No doctor in the world can practice medicine in the US without having to re-certify their knowledge. Also, education is closely tied with government funding, so it's impossible to bootstrap a college or university to cheapen the cost of education. Thus you can only go all-in to medschool. This is not 100% accurate, there are some alternatives like PA's and NP's. So the current system can absorb only so much. There are also specific funding rules for residencies, which mean that the amount that is given is done based on gov funding.
- huitzitziltzin 5y ago
  Generally residency spots are limited. This creates a scarcity which keeps prices high. I doubt the claim of the commenter below who argues that it is malpractice insurance. There are by now plenty of “tort reform” states where malpractice payouts are capped. I would be very surprised if anesthesiology prices are any lower in those states.
  - tsol 5y ago
    Yep-- you get to choose your specialty in the sense that you get to choose which residency programs you apply to. There are limited spots and in reality people have to choose from what's available
    - tastyfreeze 5y ago
      Is there policy enforcing a limit on residency spots? Or is that just how many people can be trained with available teaching facilities?

stonemetal12 5y ago

The relative difference in pay between US and UK docs is 3x(in favor of US docs). In most cities across the US Drs live in the wealthiest neighborhoods, they don't need housing help. The main problem in the US is headcount, there just aren't enough Drs to go around, as such salaries are driven sky high.

YossarianFrPrez 5y ago
Ah, interesting. Is this related to the fact that there was a cap on the number of funded residencies? [0] Or maybe there was some other cap in the graduate medical education system between the '70s and the 90's... I have a vague recollection of reading something about this. [0] https://www.ucop.edu/federal-governmental-relations/_files/fact-sheets/fgr-health-factsheet-gme-f1.pdf https://www.ucop.edu/federal-governmental-relations/_files/f...

huitzitziltzin 5y ago

- Cross-country administrative bloat is not a literature i know, if it even exists. As a complicating factor, I don’t know if we have too many or they have too few. Probably us too many, but relative to what exactly? That’s hard to say. - doctors in the US are paid relatively more, generally by A LOT, but the only data I know about this is old. US doctors are not that enthused about hearing they should be paid less. - as another commenter notes, we have fewer doctors and fewer hospital beds than most other OECD countries. - related: despite what you may hear, our utilization is lower than most other oecd countries. (At least in the following dimensions: hospital visits are less frequent and are shorter.) - I don’t know of good data about doctors’ personal expenses. But there is a paper from a few years ago which looked at labor department data and found that a decent fraction of the top 1% of the income distribution in the US was made up of doctors. I may be able to find that reference and the fact I’m citing may be misremembered. - sure, doctors do have high medical school expenses and debt here relative to other countries but for anyone who is not in primary care, it’s not going to take that long to retire the debt. There are multiple specialties which pay north of $400,000 per year. - I do not think doctors’ salaries are related in a meaningful way to their debt. Which is to say: if you canceled all medical school debt tomorrow, prices for physician services would decline by about 0%. Those costs are sunk. They are not going to have a large effect on prices.

YossarianFrPrez 5y ago
Great, thanks for the detailed response. Makes me wonder about if the supply of doctors in the US been artificially constrained to inflate salaries.
- huitzitziltzin 5y ago
  Ooh I love easy questions! The answer to this one is yes! You can thank the American Medical Association.
  - YossarianFrPrez 5y ago
    So much for the hippocratic oath :( It also makes me think that quantifying the secondary health effects of medical debt induced bankruptcy and other harms might not be a bad idea for a paper. Specifically comparing that against the benefits from said healthcare in the first-place. I imagine someone has already done this?

conanbatt 5y ago

> Can you speak to the narrative of administrative bloat in US hospitals? Admin bloat is a consequence of having too few doctors, and also legal requirements on how visits have to be handled in the US. For each medical visit you get at least 10~15m of recording the visit. A doctor without any help would spend around half the time talking to a patient, and half the time filling out charts for insurance and legal requirements. Thus to make money you need to delegate all those tasks as much as possible, and you get to a point where some hospitals even offer a full medical assistant per provider. To solve this you need to have way more doctors, and a lot less medical liability from a legal standpoint. For example, you cant have paper charts in the US, which is standard in many other first world countries. Billing is also a very expensive source of admin work. You have to have a perfect pipeline for billing to have high collections, then you have issues collecting the money months after that is settled, etc etc. Many ways to solve this one, but partially solved by moving a lot of expenditures to cash-based payment. You can save all of this in a cash-based system. Alternatively you could have competition in the insurance market, but although that could improve things, in the end, you still need to write medical and administrative work to get paid. This problem also exists in many other countries. > Are doctors paid relatively less in other countries? The Gross income of physicians in the US is surely the highest in the world. But gross is gross. At those levels taxation approaches 50%, and medical education can cost half a million dollars. Its a perverse system where you pay a lot to a ticket to earn a lot, but you get collected all the way to the bank. And if you dont make it, you fail really hard. Primary care physicians are the lowest paid in the us and have an abnormally high suicide rate. > And is there any chance that the high pay is needed to counter-act overly stressful working conditions in the US (vs., say, the UK's NHS?) High pay is a simple result of too few physicians. But what goes to physicians directly is a smaller part of spending: only about 10% of spending goes directly to physicians. You can make it better, but I think its likely they want better working conditions over money, its just not an option in this market structure. You cant operate part time, or with 30min appointments, without charging patients above insurance levels. (example, OneMedical, Concierge medicine, parsley, etc). > I'm also curious about doctors' personal expenses. If most of their salary is going towards rent or homeownership, short of situating a hospital on something like a kibbutz... maybe there is some sort of rent subsidy -- or tax break for landlords that give a 10% rent discount / for banks that give a medical professionals low interest home loans -- that could be enacted. It could allow doctor's effective salaries to stay the same, but medical prices to drop? This market structure needs less rules, not more rules. I have NEVER seen a market so captured as this one, and its captured by everyone in some way. Every single actor in this market is using government to get something from someone else, including patients, insurance takers, physicians, admin, pharma, gov. Literally everyone. > I'm afraid you are going to say that doctor's biggest personal expense is student loans for medical school! If medical-school-debt were to be wiped out, do you know how much salaries could drop in terms of objective price without changing doctor's effective income? Causal relationship is backwards here. Salaries are not high because medical debt is high. Salaries are high because there are too few doctors, because it is too expensive to get an education for it. If you wipe out medical debt, you are assisting the ones that made it over, but not all the ones that could not make it in the first place. To reduce the cost of education you need to do a few things: 1- eliminate federal funding for education, that makes it only "approved" universities be able to provide limited slots. 2- Eliminate or reduce the cost of licensing. In the us you need a license per state to practice medicine, and it is very stringent. If it were handled like a legal bar exam instead, you would put significant pressure in the college system while also allowing for independent education to ocurr. 3- Allow medical degrees from other countries to practice in the US. This would leave the option for doctors to study abroad for nearly free and come back and practice.

pmyteh 5y ago

FWIW working conditions in the NHS are (also) very stressful, largely because the system is cash-constrained and runs heavily on staff goodwill. And, while the shenanigans of brutal corporate management are largely absent, the shenanigans of continuous politically-motivated reorganisation and contracting out are not. Don't get me wrong, I'm a big fan of the NHS. It's humane, generally provides very good care, and (in comparative terms) is cheap. It'd be a happier place if it wasn't permanently having to handle demand increasing faster than budget.

huitzitziltzin 5y ago
It’s very very very hard to get single payer right. That’s a fact.