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While this is true, physician pay also accounts for less than 10% of Healthcare spending. It's Amdahls law. You could cut physician pay in half, and it would ba

While this is true, physician pay also accounts for less than 10% of Healthcare spending. It's Amdahls law. You could cut physician pay in half, and it would barely touch total healthcare costs. In fact, we have been cutting physician compensation - the average physician pay has not kept pace with inflation for about a decade now. (US wages overall were outpacing inflation until the COVID inflation boom.)

jjoonathan 3y ago
Each head of the hydra (providers, insurance, drug companies) points at the other two heads and says "don't look at me, they are the real problem!"
- Calavar 3y ago
  Again, healthcare expenditure has been going up versus inflation, and physician compensation has been going down versus inflation. So if you're looking for divers of growing healthcare costs over the past decade, physician compensation isn't it.
  - jeffreyrogers 3y ago
    Do you have data on that? The most recent data I've seen shows physician pay going up.
    - mirthflat83 3y ago
      > versus inflation
      - FireBeyond 3y ago
        Show me one employment category that has steadily been going up "versus inflation" in the last 5-10 years.
        Calavar 3y ago
        Most actually. As a country, we've had about a 10-year run of wage growth beating inflation. This only flipped in 2021. But the compounded wage growth from ~2013 to 2021 still beats the downward trend from 2021 to now. [1] https://www.stlouisfed.org/on-the-economy/2023/feb/nominal-wage-growth-individual-level-2022 https://www.stlouisfed.org/on-the-economy/2023/feb/nominal-w...
    - Calavar 3y ago
      My apologies because I was trying to recall trends from memory, and my timescales were off. Physician wages started to decline against inflation in the 1990s. They have been outpacing inflation for the past 10 years or so, but have still not made up for the previous decline. According to one historical physician earnings survey [1]: > During 1987-1990, median earnings for physicians were $143,963 (interquartile range, 96,718-175,850) compared with $157,751 (IQR, 101,279-203,281) during 2006-2010 ($13,788 increase or growth of 9.6%; P < .001). If we take the most conservative time interval (1990 to 2006) and plug it into the Bureau of Labor Statistics CPI Inflation Calculator [2] we see that the median 1990 physician wage would be equal to 224,080 in 2006 dollars. Median physician wages as of now are $229,300 (2022) according to the BLS [3] or $255,200 (2020) according to the US Center for Economic Studies [4]. Plug that into the CPI Inflation Calculator, and the 1990s median amounts to 291,509 in 2020 dollars. So yes, physicians have seen a sizable decline in real wages over the last 35 years. Americans overall saw a significant uptick in real wages in the same time period. Per capita healthcare expenditure has also gone up significantly in the same time period. Also, when discussing physician compensation, it's important to remember that there is a very heavy rightward skew. Mean wages are not representative of the typical physician. According to the CES report [2], the mean physician wage is $343,600, while the median is $255,200. This is why you will see dramatically different "average" numbers on physician wages in different outlets -- you should always check if it is a mean or a median. [1] https://jamanetwork.com/journals/jama/fullarticle/1456053 https://jamanetwork.com/journals/jama/fullarticle/1456053 [2] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&year1=199001&year2=200601 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&y... [3] https://www.bls.gov/ooh/healthcare/physicians-and-surgeons.htm https://www.bls.gov/ooh/healthcare/physicians-and-surgeons.h... [4] https://www2.census.gov/ces/wp/2020/CES-WP-20-23.pdf https://www2.census.gov/ces/wp/2020/CES-WP-20-23.pdf [5] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&year1=199001&year2=202001 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&y...
nine_k 3y ago
The problem is not that doctors are overpaid. The problem is that they are overworked, and not available enough.
- steveBK123 3y ago
  Because the supply of doctors is artificially constrained, and so there is incentive to chase HCOL areas where they can get paid or higher margin patients/procedures. Fun examples - My dentist has a waiting list of like 3-4 months to schedule a cleaning, so if you don't schedule the next one as you leave, you'll be out of luck later. HOWEVER, if you opt for any of the elective procedures (ortho/veneers/etc) they have vast availability and can take you next week. Funny that. And this is the third or fourth dentist we've used in the city, after dealing with both negligence and worse overselling elsewhere. In my condo there's a dermatologist specialist that makes enough money to own two homes before 40 and operate his own practice in Manhattan & in the rich suburb of his second home. He always seems to be home by 6, and the last time I saw him, he was wheeling one of those coolspa coolsculpting machines around in his newest truck.. My previous GP was great but she only worked 2-3 days/week. My GI is great but while its hard to get in to see him, he'll get you booked for a colonscopy/endoscopy ASAP at the clinic he also owns across town.. and the followup appointment to read you the results. All about that ROI and $/hr maximization.
  - bequanna 3y ago
    > after dealing with both negligence and worse overselling elsewhere. Glad that I’m not the only one who notices this drop off in practitioner quality and focus on upselling. The only thing they even discuss at dentist visits are the optional, expensive cosmetic treatments. When you make it clear you have no interest they end the conversation and leave. It’s like they have all bought the same practice management course. Once you realize what they are doing it feels very sleezy.
  - Calavar 3y ago
    > incentive to chase HCOL areas where they can get paid or higher margin patients/procedures. I can't speak to dentistry, but physician income tends to be lower in HCOL areas because they tend to be oversaturated with physicians and thus fewer patients per physician. It's paradoxical. It's the reverse trend of almost every other profession. As for why for physicians to live and work in HCOL areas, it tends to be more about personal life. For example, if your spouse has a tech job, you may find yourself to the Bay Area even though your income potential as a physician there is much lower than it would be in the Central Valley. Or you might prefer the public schools in the HCOL areas. Or maybe you prefer to live in an HCOL area to be close to family. Or maybe you like to travel and prefer not to be a 5-hour drive from the nearest international airport.
jeffreyrogers 3y ago
> the average physician pay has not kept pace with inflation for about a decade now This might be true for primary care and family practice. I don't think it's true for specialities. And part of why it is true for primary care is because nurse practitioners can do that job now.

jjoonathan 3y ago

Each head of the hydra (providers, insurance, drug companies) points at the other two heads and says "don't look at me, they are the real problem!"

Calavar 3y ago
Again, healthcare expenditure has been going up versus inflation, and physician compensation has been going down versus inflation. So if you're looking for divers of growing healthcare costs over the past decade, physician compensation isn't it.
- jeffreyrogers 3y ago
  Do you have data on that? The most recent data I've seen shows physician pay going up.
  - mirthflat83 3y ago
    > versus inflation
    - FireBeyond 3y ago
      Show me one employment category that has steadily been going up "versus inflation" in the last 5-10 years.
      - Calavar 3y ago
        Most actually. As a country, we've had about a 10-year run of wage growth beating inflation. This only flipped in 2021. But the compounded wage growth from ~2013 to 2021 still beats the downward trend from 2021 to now. [1] https://www.stlouisfed.org/on-the-economy/2023/feb/nominal-wage-growth-individual-level-2022 https://www.stlouisfed.org/on-the-economy/2023/feb/nominal-w...
  - Calavar 3y ago
    My apologies because I was trying to recall trends from memory, and my timescales were off. Physician wages started to decline against inflation in the 1990s. They have been outpacing inflation for the past 10 years or so, but have still not made up for the previous decline. According to one historical physician earnings survey [1]: > During 1987-1990, median earnings for physicians were $143,963 (interquartile range, 96,718-175,850) compared with $157,751 (IQR, 101,279-203,281) during 2006-2010 ($13,788 increase or growth of 9.6%; P < .001). If we take the most conservative time interval (1990 to 2006) and plug it into the Bureau of Labor Statistics CPI Inflation Calculator [2] we see that the median 1990 physician wage would be equal to 224,080 in 2006 dollars. Median physician wages as of now are $229,300 (2022) according to the BLS [3] or $255,200 (2020) according to the US Center for Economic Studies [4]. Plug that into the CPI Inflation Calculator, and the 1990s median amounts to 291,509 in 2020 dollars. So yes, physicians have seen a sizable decline in real wages over the last 35 years. Americans overall saw a significant uptick in real wages in the same time period. Per capita healthcare expenditure has also gone up significantly in the same time period. Also, when discussing physician compensation, it's important to remember that there is a very heavy rightward skew. Mean wages are not representative of the typical physician. According to the CES report [2], the mean physician wage is $343,600, while the median is $255,200. This is why you will see dramatically different "average" numbers on physician wages in different outlets -- you should always check if it is a mean or a median. [1] https://jamanetwork.com/journals/jama/fullarticle/1456053 https://jamanetwork.com/journals/jama/fullarticle/1456053 [2] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&year1=199001&year2=200601 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&y... [3] https://www.bls.gov/ooh/healthcare/physicians-and-surgeons.htm https://www.bls.gov/ooh/healthcare/physicians-and-surgeons.h... [4] https://www2.census.gov/ces/wp/2020/CES-WP-20-23.pdf https://www2.census.gov/ces/wp/2020/CES-WP-20-23.pdf [5] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&year1=199001&year2=202001 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=143%2C963.00&y...

nine_k 3y ago

The problem is not that doctors are overpaid. The problem is that they are overworked, and not available enough.

steveBK123 3y ago
Because the supply of doctors is artificially constrained, and so there is incentive to chase HCOL areas where they can get paid or higher margin patients/procedures. Fun examples - My dentist has a waiting list of like 3-4 months to schedule a cleaning, so if you don't schedule the next one as you leave, you'll be out of luck later. HOWEVER, if you opt for any of the elective procedures (ortho/veneers/etc) they have vast availability and can take you next week. Funny that. And this is the third or fourth dentist we've used in the city, after dealing with both negligence and worse overselling elsewhere. In my condo there's a dermatologist specialist that makes enough money to own two homes before 40 and operate his own practice in Manhattan & in the rich suburb of his second home. He always seems to be home by 6, and the last time I saw him, he was wheeling one of those coolspa coolsculpting machines around in his newest truck.. My previous GP was great but she only worked 2-3 days/week. My GI is great but while its hard to get in to see him, he'll get you booked for a colonscopy/endoscopy ASAP at the clinic he also owns across town.. and the followup appointment to read you the results. All about that ROI and $/hr maximization.
- bequanna 3y ago
  > after dealing with both negligence and worse overselling elsewhere. Glad that I’m not the only one who notices this drop off in practitioner quality and focus on upselling. The only thing they even discuss at dentist visits are the optional, expensive cosmetic treatments. When you make it clear you have no interest they end the conversation and leave. It’s like they have all bought the same practice management course. Once you realize what they are doing it feels very sleezy.
- Calavar 3y ago
  > incentive to chase HCOL areas where they can get paid or higher margin patients/procedures. I can't speak to dentistry, but physician income tends to be lower in HCOL areas because they tend to be oversaturated with physicians and thus fewer patients per physician. It's paradoxical. It's the reverse trend of almost every other profession. As for why for physicians to live and work in HCOL areas, it tends to be more about personal life. For example, if your spouse has a tech job, you may find yourself to the Bay Area even though your income potential as a physician there is much lower than it would be in the Central Valley. Or you might prefer the public schools in the HCOL areas. Or maybe you prefer to live in an HCOL area to be close to family. Or maybe you like to travel and prefer not to be a 5-hour drive from the nearest international airport.

jeffreyrogers 3y ago

> the average physician pay has not kept pace with inflation for about a decade now This might be true for primary care and family practice. I don't think it's true for specialities. And part of why it is true for primary care is because nurse practitioners can do that job now.