7 ms·

A bit orthogonal to the article, the answer to why someone makes "so much" or "so little" boils down to how badly people need that work done and how many people

A bit orthogonal to the article, the answer to why someone makes "so much" or "so little" boils down to how badly people need that work done and how many people can do it. IE, supply and demand. Consider a doctor or even a plumber. When you have a problem that needs one, that problem is usually important and urgent, and it's not a job you can "afford" to be poorly done by an amateur. So you end up paying a lot to get it done quickly by someone from a small pool of qualified providers. On the flip side of that is something like a barista. My 3 year old has figured out how to operate the Keurig and while obviously a high-end barista can make a way better coffee, the second-best and "nearly free" option is totally acceptable, putting a hard ceiling on how much a barista can make. That option doesn't exist for doctors and plumbers so they make a lot.

NoMoreNicksLeft 3y ago
I've seen more than a few $100,000 bills for surgeries. The fee paid to the surgeon is something like 2-4% on the ones I've seen. So, a few grand to save someone's life. I don't think they're paid so much at all. What they are paid seems more than earned to me. We might instead ask why so little of the money paid for procedures seems to be paid to the doctors, and so much to the medical bureaucracy. Most of what people complain about isn't the plumber charging $500 to fix plumbing, so to speak, but why the Plumbing Center adds another $40,000 to the bill and itemizes things like "$50 Miscellaneous Paper Towels".
- electriclove 3y ago
  Dig deeper and you will find that much of this infrastructure is owned by the physicians as well
gcapu 3y ago
There are insane controls on supply. It’s not a free market. Everyone has to choose a Ferrari treatment or not go to the doctor. There’s no budget option.
- Invictus0 3y ago
  Something like 25% of healthcare visits are now done by nurses and PAs. https://hms.harvard.edu/news/fourth-us-health-visits-now-delivered-non-physicians https://hms.harvard.edu/news/fourth-us-health-visits-now-del...
  - gcapu 3y ago
    That doesn’t mean we have a market. I was billed $1000 for en ECG for example. I wouldn’t have paid for it. It’s a simple procedure that doesn’t require a genius or advanced equipment. I’d rather an immigrant with a foreign degree look at it for $80 than a licensed American doctor for $1000. I’m not allowed to do so. I can’t choose the quality of care I get.
    - evulhotdog 3y ago
      I hate to be the bearer of bad news, but specific to ECG, it does not actually require a trained physician or even a nurse to read, legally within the US. It can be basically anybody that the overseeing physician deems appropriate. Could be basically anybody.
- kulahan 3y ago
  >There's no budget option What do you say to things like shopping around using newly-transparented prices, telehealth, minute/community clinic visits, and nurse help lines?
  - digdugdirk 3y ago
    That isn't actually a thing. Those prices aren't transparent, and there's no guarantee that an up-front price quote will be the price you're actually billed for.
    - ajmurmann 3y ago
      You might enjoy one of my all-time favorite episodes of econtalk: https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c... The guest is the head of the Surgical Center of Oklahoma. You can see prices of procedures very easily on their website. That's what you'll pay, even if something goes wrong. Surgeons earn more when working there than they earn at a regular hospital while patients pay less. However, no insurance wants to work with them. Supposedly because they have a price and won't negotiate with insurance who get part of their money as reward from large customers for negotiating prices down.
derbOac 3y ago
I think the "how many people can do it" part is where things go astray. "Can" can mean "are capable of doing it" or it can mean "allowed to do it" and those are conflated under the current system. Plumbing is maybe a good example, in the sense that if I own a home and feel comfortable with something, I can do whatever repairs I want. I could hire my friend John Smith to do it if I trusted him. The limit is the inherent risk I take, and knowing that if I screw something up, I could cause problems that cause problems to me. There are code issues, but that gets complicated and is orthogonal to the issue of who does the work that meets code. In healthcare though, even if you are entirely capable of doing something yourself, you are not able to legally. If there's a medication that you have been taking your entire life, and has been deemed safe in the primary scientific literature, you are still not able to just go buy it from the pharmacy without a prescription. If you want help or advice with the medication, you also can't just go to a provider that you want. You can't take the drug yourself, under the advice of the pharmacist for example — even though the pharmacist often knows more about drugs than an average physician — and you can't take it from a different type of provider that you trust more, for whatever reason.
- xyzelement 3y ago
  I mean yes... My point is that it's supply and demand, not that the friction to enter the profession is identical across plumbers and doctors. The point still stands... the number of people who are willing to take plumbing matters into their own hands is pretty low. I am one of them sometimes but 99.9% of households are still competing for the handful of "capable and available when I need him" plumbers.
NotSammyHagar 3y ago
Often high pay is related to competition in hiring or demand/need by the employer, but not always. In my town like in many others they have lots of help wanted signs. All they need to do it pay more and they’d have a much better chance of hiring people. They just don’t want to pay that much. Starbucks apparently pays over $20/hr starting, and they have benefits if you work enough (something like >20hrs/week) but they seem to manipulate people’s work hours so they don’t work enough. And they are evil union busters, but that’s another issue. The are significant structural reasons behind pay. Teachers can’t be paid more because they are govt jobs and the govt almost always doesn’t do that. So programmers in govt are underpaid too, and they can’t raise rates. Or they raise them a little but they don’t have anything like market rates. The pay of real estate agents, where each side commonly gets 3% of the sale price (shared usually with your firm) is a rediculuous cartel that needs to be destroyed. In my city avg home price is over a million, so the seller/buyer each pay a 30k commission for a few hours work? That high pay comes from a cartel. Some people are paid high amounts because that’s the expectation. Parity with other jobs might be a support for high pay, but maybe not. I’m skeptical of this argument applied to doctors. I had more years of college than a doctor plus medical school plus a year or two of hospital / internship. I used to be paid less than them by a large margin, probably I make more than most now. It’s market rates. Am I doing more important things for society than teachers in my town? (where they can’t find enough and now they recruit parents to be subs because they don’t pay enough for that either). What I’m doing is useful but probably not more important than public school teachers.
- xyzelement 3y ago
  Hi, I am the person you replied to. I think all of your points go along my point that it all boils down to supply and demand. // In my town like in many others they have lots of help wanted signs. All they need to do it pay more and they’d have a much better chance of hiring people. Right... so apparently they don't "demand" that labor badly enough to pay "whatever it takes" - as you would with a doctor when you're sick or a plumber when your house is flooding. // Teachers can’t be paid more because they are govt jobs and the govt almost always doesn’t do that. So programmers in govt are underpaid too, and they can’t raise rates. But it seems like the "government rate" is sufficient to attract the kinds of people that become public school teachers and government programmers, right? Supply and demand... // The pay of real estate agents... so the seller/buyer each pay a 30k commission for a few hours work Yeah but how many agents are you competing with and how many houses are you moving a year? The top realtor in my town moved over 20M of property a few years ago, so she cleared 600K in commissions that year. The bottom bunch of realtors in my town sold $0 worth of house and got $0 worth of commission. The reason the first woman made that $600K is because there's a demand for her services... and the reason those other guys made $0 is because there isn't. I get the point you're making about fixed fees, but these fees don't guarantee you any profit for just becoming a relator. // Some people are paid high amounts because that’s the expectation What is an example of that? To whom do you pay more than you have to in the market because of "expectations" // I used to be paid less than them by a large margin, probably I make more than most now. It’s market rates. Right, it's supply and demand as I am saying because someone needs you to do the thing you do whatever it is, and they can't find someone to do it for less.

NoMoreNicksLeft 3y ago

I've seen more than a few $100,000 bills for surgeries. The fee paid to the surgeon is something like 2-4% on the ones I've seen. So, a few grand to save someone's life. I don't think they're paid so much at all. What they are paid seems more than earned to me. We might instead ask why so little of the money paid for procedures seems to be paid to the doctors, and so much to the medical bureaucracy. Most of what people complain about isn't the plumber charging $500 to fix plumbing, so to speak, but why the Plumbing Center adds another $40,000 to the bill and itemizes things like "$50 Miscellaneous Paper Towels".

electriclove 3y ago
Dig deeper and you will find that much of this infrastructure is owned by the physicians as well

gcapu 3y ago

There are insane controls on supply. It’s not a free market. Everyone has to choose a Ferrari treatment or not go to the doctor. There’s no budget option.

Invictus0 3y ago
Something like 25% of healthcare visits are now done by nurses and PAs. https://hms.harvard.edu/news/fourth-us-health-visits-now-delivered-non-physicians https://hms.harvard.edu/news/fourth-us-health-visits-now-del...
- gcapu 3y ago
  That doesn’t mean we have a market. I was billed $1000 for en ECG for example. I wouldn’t have paid for it. It’s a simple procedure that doesn’t require a genius or advanced equipment. I’d rather an immigrant with a foreign degree look at it for $80 than a licensed American doctor for $1000. I’m not allowed to do so. I can’t choose the quality of care I get.
  - evulhotdog 3y ago
    I hate to be the bearer of bad news, but specific to ECG, it does not actually require a trained physician or even a nurse to read, legally within the US. It can be basically anybody that the overseeing physician deems appropriate. Could be basically anybody.
kulahan 3y ago
>There's no budget option What do you say to things like shopping around using newly-transparented prices, telehealth, minute/community clinic visits, and nurse help lines?
- digdugdirk 3y ago
  That isn't actually a thing. Those prices aren't transparent, and there's no guarantee that an up-front price quote will be the price you're actually billed for.
  - ajmurmann 3y ago
    You might enjoy one of my all-time favorite episodes of econtalk: https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c... The guest is the head of the Surgical Center of Oklahoma. You can see prices of procedures very easily on their website. That's what you'll pay, even if something goes wrong. Surgeons earn more when working there than they earn at a regular hospital while patients pay less. However, no insurance wants to work with them. Supposedly because they have a price and won't negotiate with insurance who get part of their money as reward from large customers for negotiating prices down.

derbOac 3y ago

I think the "how many people can do it" part is where things go astray. "Can" can mean "are capable of doing it" or it can mean "allowed to do it" and those are conflated under the current system. Plumbing is maybe a good example, in the sense that if I own a home and feel comfortable with something, I can do whatever repairs I want. I could hire my friend John Smith to do it if I trusted him. The limit is the inherent risk I take, and knowing that if I screw something up, I could cause problems that cause problems to me. There are code issues, but that gets complicated and is orthogonal to the issue of who does the work that meets code. In healthcare though, even if you are entirely capable of doing something yourself, you are not able to legally. If there's a medication that you have been taking your entire life, and has been deemed safe in the primary scientific literature, you are still not able to just go buy it from the pharmacy without a prescription. If you want help or advice with the medication, you also can't just go to a provider that you want. You can't take the drug yourself, under the advice of the pharmacist for example — even though the pharmacist often knows more about drugs than an average physician — and you can't take it from a different type of provider that you trust more, for whatever reason.

xyzelement 3y ago
I mean yes... My point is that it's supply and demand, not that the friction to enter the profession is identical across plumbers and doctors. The point still stands... the number of people who are willing to take plumbing matters into their own hands is pretty low. I am one of them sometimes but 99.9% of households are still competing for the handful of "capable and available when I need him" plumbers.

NotSammyHagar 3y ago

Often high pay is related to competition in hiring or demand/need by the employer, but not always. In my town like in many others they have lots of help wanted signs. All they need to do it pay more and they’d have a much better chance of hiring people. They just don’t want to pay that much. Starbucks apparently pays over $20/hr starting, and they have benefits if you work enough (something like >20hrs/week) but they seem to manipulate people’s work hours so they don’t work enough. And they are evil union busters, but that’s another issue. The are significant structural reasons behind pay. Teachers can’t be paid more because they are govt jobs and the govt almost always doesn’t do that. So programmers in govt are underpaid too, and they can’t raise rates. Or they raise them a little but they don’t have anything like market rates. The pay of real estate agents, where each side commonly gets 3% of the sale price (shared usually with your firm) is a rediculuous cartel that needs to be destroyed. In my city avg home price is over a million, so the seller/buyer each pay a 30k commission for a few hours work? That high pay comes from a cartel. Some people are paid high amounts because that’s the expectation. Parity with other jobs might be a support for high pay, but maybe not. I’m skeptical of this argument applied to doctors. I had more years of college than a doctor plus medical school plus a year or two of hospital / internship. I used to be paid less than them by a large margin, probably I make more than most now. It’s market rates. Am I doing more important things for society than teachers in my town? (where they can’t find enough and now they recruit parents to be subs because they don’t pay enough for that either). What I’m doing is useful but probably not more important than public school teachers.

xyzelement 3y ago
Hi, I am the person you replied to. I think all of your points go along my point that it all boils down to supply and demand. // In my town like in many others they have lots of help wanted signs. All they need to do it pay more and they’d have a much better chance of hiring people. Right... so apparently they don't "demand" that labor badly enough to pay "whatever it takes" - as you would with a doctor when you're sick or a plumber when your house is flooding. // Teachers can’t be paid more because they are govt jobs and the govt almost always doesn’t do that. So programmers in govt are underpaid too, and they can’t raise rates. But it seems like the "government rate" is sufficient to attract the kinds of people that become public school teachers and government programmers, right? Supply and demand... // The pay of real estate agents... so the seller/buyer each pay a 30k commission for a few hours work Yeah but how many agents are you competing with and how many houses are you moving a year? The top realtor in my town moved over 20M of property a few years ago, so she cleared 600K in commissions that year. The bottom bunch of realtors in my town sold $0 worth of house and got $0 worth of commission. The reason the first woman made that $600K is because there's a demand for her services... and the reason those other guys made $0 is because there isn't. I get the point you're making about fixed fees, but these fees don't guarantee you any profit for just becoming a relator. // Some people are paid high amounts because that’s the expectation What is an example of that? To whom do you pay more than you have to in the market because of "expectations" // I used to be paid less than them by a large margin, probably I make more than most now. It’s market rates. Right, it's supply and demand as I am saying because someone needs you to do the thing you do whatever it is, and they can't find someone to do it for less.