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Notes -
On physician salaries:
This topic comes up from time to time and is more in the news now for obvious reasons.
Here I will point out that cutting physician salaries does little to address the healthcare cost crisis and also argue that the salaries are deserved.
Obviously yes, I am a physician and don’t want my salary to get cut, but nobody wants that to happen to them, how would you feel if people on the internet were saying you were over-compensated and demanding you take a 50% pay cut?
It’s also worth noting that everybody in the U.S. is compensated well (too well?). That includes within healthcare (see: nurses) but also outside of it. We make good money here; it’s one of the reasons so many of the successful elsewhere want to come to America.
-Okay how much of healthcare spending is doctor’s salaries?
About 8%. If you cut physician salaries by half you get 4% savings. That’s not a little but it is also not a lot.
-Can we do this?
Sure, you could, maybe, but you’ll introduce new problems, people will retire or leave the field, shortages will get even worse, and so on. Depending on how you did it, certain critical fields like surgery would vanish overnight. OB care would be financially impossible to provide (due to incredibly high malpractice burden (can be 150k per year). You can’t spend your entire salary on malpractice insurance and other expenses.
-Okay, but how are physician salaries trending, are you making more than you used to?
Doctors have been getting year after year real wage cuts for 20-30 years. Everyone else’s (in healthcare) salaries have been going up. Percentage of healthcare spending on physician salaries is going down. So, if you really want us to get paid less just wait. Our salary shrinks every year and the portion of the pie we are taking shrinks too.
-Alright, again. So, does cutting physician salaries help?
No not really, we aren’t a large enough slice of the pie and you’d cause a shit ton of new problems. We’ve already seen this a bit. More people are working part time, quitting, dropping out of residency, graduating from medical school and not doing medicine, not providing certain types of services or working in certain locations. That’s with a modest decline in salary and things like an increase in administrative burden and a decline in respect. This would shoot up if you dramatically cut salaries.
-Okay but let us just import a ton of foreign doctors.
Again, 8%. It’s not going to help that much. However, it’s worth keeping mind that a lot of what pisses people off about healthcare gets worse with foreign doctors. Yes, I believe that foreign doctors have worse training and experience than American doctors. People here seem to not like that argument, but we don’t need it. Foreign doctors are almost always coming from third world countries, not Western Europe. People hate when their doctor barely speaks English, spends little time with them, and acts like a cultural alien. All of those things are what cheaper foreign labor brings to the table. Patients in the 90s and 00s heavily pushed better customer service in medicine. It’s made things more expensive but has resulted in better customer service. Walk that back and make things cheaper if you are okay with worse customer service we can do that without breaking everything else.
-Okay DW what’s the most histrionic thing you can say on this topic, just for fun.
If you cut MD salaries by half, I think healthcare costs would actually increase. You’d see a decline in certain types of care which is unexpensive, preventative, and annoying for us to do. Example: nearly every single endocrinologist would stop practicing and go back to doing hospital medicine (they already make less than hospitalists, often to the tune of 150k and have already completed the training for that). All those unmanaged conditions would end up costing more in the long run. You’d also see an increase in “well fuck you, I’m going to be shady now in order to make this worth it.” And you’d see a huge increase in low value – high expense defensive medicine since protecting your salary becomes even more important. A more modest boiling the frog approach is already in use, and involves far too little money to solve the problem.
Switching gears.
-Okay give me some numbers.
It’s hard to tell for a variety of reasons but the number going around right now is an average of 350k (it may actually closer to 300k and we are seeing a complicated post-COVID mirage). That’s a big number but this is a situation where the median and average diverge a lot. Pediatricians often make between 180k-200k. Family medicine makes more than that but not a lot more. Those are a huge percentage of the overall jobs. Yeah, neurosurgeons can make 5-10 times that, but there aren’t a lot of them, and they work close to 24/7, they still make the average weird. A lot of “rich” doctors are a small number of people in a complicated specialty working egregious hours and not really enjoying the money. At one point the neurosurgery divorce rate was over 120%. The median physician has much more reasonable compensation. They also used to make a lot more, the mental framing of this for some is anchored around 90s compensation which just isn’t true anyway. Doctors work a lot. People who run entire departments, manage millions of dollars in research grants, or own patents and other companies are sometimes presented in these numbers.
-That’s still too much.
Okay let us talk tradeoffs. Some things to keep in mind. Doctors don’t typically make money until after they turn 30. Up till that point physicians can often live in more or less in poverty (want to live next to your hospital in the nicest part of a major city on 60k? Good luck). Once you start making money you can start paying off your 500+ thousand dollars in loans. Delightful. Up until that point you have no flexibility. You can’t leave your job or your life is over. You can’t choose where you live. If you get fired your life is over. If your boss is abusive, you say nothing. Probably most importantly, you can’t get back time. Money and time are probably most useful in your 20s. Our peers are meeting partners, going on vacation, clubbing. We are working 24-hour shifts. That’s a huge cost.
-Boring. You chose this.
Fair. But if you want American to keep choosing this you have to be aware, otherwise it ends up like the other jobs that nobody in this country wants to do.
-Okay fine, like is it even that bad of a job though?
Yes. Consider that many doctors are functionally working 2-3 full time jobs worth of work.
-Okay hold up, yeah you work 80 hours in residency but not as an attending and certainly not 120 hours.
Okay, okay lemme explain. Yes, some people are working 80 hours a week (or a lot more) as an adult. However, you are more often doing things like working 60 hours a week, but that is including things like nights, weekends, and Holidays. How many jobs involve regularly working Christmas, or three weeks in a row without a day off, or 24+ hours in a row? Any job with hourly wage and overtime is going to add up to 2 times the base salary really quick under those conditions.
Also, unlike most blue-collar labor (which is laden with mandatory and very real breaks) or white-collar labor (which involves a lot of downtime), most doctors are working nearly 100% of the time while working.
That may sound unfathomable to you, and to some extent varies specialty by specialty but can be very close to literally true. On days when I’m in the hospital for three or meals I’m lucky if I sit down and eat for one of them. Usually if I’m lucky I’m just cramming a protein bar in my face. Trainees always go “what the fuck when do you eat. Or drink. Or pee.” We usually don’t. Surgeons are notorious for regularly giving themselves mild kidney injuries because of dehydration.
Almost nobody I know who isn’t a physician has worked a 24-hour shift. Most people I know have never worked 8 hours in a row for real with no breaks, certainly not for weeks and weeks in a row. Your year-end scramble or Go-Live or tax season is our baseline, and often we are doing it for 24+ hours at age 55.
Once you break this down to hourly wage the numbers get much more reasonable.
-Hold up you work 24 hours in a row with no breaks? Is that real? Isn’t that unsafe?
Yes, at around hour 18 you become disoriented to the point where it’s not safe to drive anymore. Yes, this schedule ends up actually making a lot of sense somehow. Yes we sometimes work more than that, at any given time in a hospital there’s probably someone working a single shift longer than some of the nurses whole work-week.
-Okay but like, outside of the sheer hours it is not that bad right?
Well lack of breaks is part of that. Plenty of other stuff though. Perks are non-existent these days. Most places got rid of the physician lounge and parking lots, which mostly exist to make us faster and more efficient so not the best move in the world. Keep in mind that the chair in my office is maybe older than I am, and most places I work my personal laptop screen is bigger than the screen I’m doing my work on. Most corporate jobs are comfortable. Medicine is not. Little things like that add up and are part of why a lot of us get lured into the general workforce. For some reason I pay for parking.
Also, the job is intrinsically hard. Treat us like kings and pay us millions of dollars a year…and you are still dealing with death and entitled and demanding people all day. You can get sued and lose all your money, your job, or more likely just be miserable for five to ten years while the case gets sorted out in your favor. Most jobs if you make an inattentive mistake, you say oh shit and fix it, or somebody loses some money. Doctor fucks up and somebody dies, and you make thousands of decisions each day where if you lose that focus…
Alcoholism, drug abuse, and depression rates are high. As are suicide rates.
Sidebar: most white-collar work does not involve dealing with the dregs of society. This occasionally makes useful for for instance talking about the practicalities of the criminal underclass but is absolutely stressful.
-Okay but like, not everything is clinical work, right?
Well yes, to some extent that is part of the problem. An increase in charting and administrative work has made healthcare more expensive and restricted supply and quality since I spend less time with and working on patients. Writing bullshit notes does not increase my job satisfaction.
However, there are good other parts – leadership roles, research, teaching. Most doctors are clinical care providers, mentors and educators, and team leaders and managers all at the same time. With the demands of all of those things.
-That’s a lot of shit, anything else you want to unload?
Yeah, there’s other stuff that makes being a doctor be expensive. Board examinations and licensing can cost tens of thousands of dollars. If you get caught smoking weed you could end up losing your job and have to pay hundreds of thousands to get it back for some god forsaken reason. Everyone wants to siphon off of us because they know where the money is. This is also why NPs don’t get sued despite having less training and more bad outcomes. Less money involved.
You constantly get expensive retraining, tests and learning for the rest of your career also. Medicine changes all the time and we are required to stay up to date.
-Okay but like if I’m in the hospital I don’t see you at all what the fuck are you doing?
Operating. Teaching. Calling the lab. Writing notes. Seeing other patients. In committee meetings. I swear we are working you just aren’t seeing it, and a lot of what we do isn’t direct clinical medicine.
-Thank you for coming to my TED talk.
Great post, although I think the word "salary" might be doing too much work.
I would argue that 250k-300k for a internal medicine doctor is very reasonable, as is the 1 million dollar a year that the top neurosurgeon gets.
But payments to doctors can be more than salaries. As we all know, seeing patients pays very poorly. But procedures and tests pay very well. The orthopedist who owns an MRI machine has a license to print money. He many only draw a "salary" of 200,000 while clearing over a million in profit.
Other specialties which involve procedures seem to pay an abnormally high amount as well, including anesthesiologists, radiologists, and dermatologists. The ease of these specialities compared with the outsize salaries make them some of the more competitive residencies. But is society better off having our most talented young people chasing these specialties? No, of course not. Some even argue that most anesthesiology could be done by a non-MD.
Rather than cut salaries, which I agree would be a bad idea, we need to fix the problem of outsized payments to doctors. We can do that in a market-based way.
Create more med schools and residency programs to increase the supply of doctors. If the AMA doesn't play ball, remove their involvement.
Reduce the regulation that leads MD's to do things that non-MD's can do.
Price transparency for procedures. I need to know exactly how much that ultrasound will cost, and I need to be able to shop around. Same for prescription drugs, which doctors often proscribe completely blind to how much they cost.
If you are a doctor making 250k a year seeing patients, no one is coming for your salary. At least I hope not. You deserve it. But doctors (in aggregate) do bear a large amount of responsibility for the cost explosion we are seeing.
Jesus Christ please no haha.
Physician ownership is dead in most specialties, nearly everybody is employed now. There are some people who still own things now but the majority of people get paid salary with some element of bonus that is RVU based (eat what you kill type stuff). It did not use to be this way, and I won't argue that era had some excess, but it is dead now.
Procedural work does pay more and there are problems with that, but it is generally much harder (on an hours worked basis if nothing else) and as a result we have much less of a problem with rationing of surgery than most countries.
There's also a lot less of these people - there's 35 times as many (Family Med/IM/EM/Peds) doctors as dermatologists.
Skim 100k-200k off of the dermatologist and you do fuck all for total healthcare costs.
Decrease doctor salaries and increase doctor supply and you'll have doctors refuse to do out of title work and demand to work a normal day. If you half doctor salary and double the number of doctors you haven't done much. Every doc is doing 2-3 people worth of work and they do it because the money is good, money stops being good and then they stop...
I'm burnt out on the price transparency issues because of other conversations on this board but keep in mind that a lot of this already exists. Check out GoodRX.com Most doctors will use these tools nowadays when they can (lots of EMRs automatically tell you the drug cost for instance) but if given the choice of a drug that costs X or 10X they are going to choose 10X 10/10 times if they think its going to reduce the risk of a lawsuit.
Maybe you don't see it as an MD, but price transparency really doesn't exist to your average patient. You go in, you get your thing, and then you get a shocking, incomprehensible bill somewhere between 2 weeks to 2 years later. Sure, part of this is insurance. A lot of it isn't.
Providers will happily charge you $1000 for a routine test if you don't have insurance and then I guess you're supposed to like call them up and negotiate. In the real world, that's just not going to happen.
Yeah, savvy customers will find a way to reduce costs. You can ask the doctor what blood test they want, go on ultalabtests.com (highly recommend), get your tests results for incredibly cheap and without having to wait in line, then print them out and give them to your doctor (or, shudder, fax them in). Maybe the system will tolerate this. But they are not set up for it, and it will be a ridiculous burden on the patient, who will have to fight his doctor and clueless staff every step of the way.
Drugs are a little easier to save on, but face much of the same burden on the patient to proactively battle to save money. And since something like 80-90% of health care is paid for someone who is NOT the patient, there is little incentive anyway.
On a personal note, I don't think you should fear reform. As an average doctor making 250k, you have nothing to worry about. The system needs you more than you need it. And maybe we can even find a way to reduce the bullshit that doctors have to deal with. But not everything always has to be the way it is now forever. The $5 trillion we spend every year is clearly going somewhere. The people who take surplus profits from the system are not exactly going to stand up and advertise themselves.
I mean price transparency doesn't really exist for most things.
Two major problems:
Physician's are employed now and are therefore generally not in charge of anything when it comes to billing. This adds an extra layer of abstraction and problems. You correctly identify useless clueless staff as part of the problem and as the doc I generally have other stuff I need to be focusing on.
Most of the total types of costs are unreasonable or impossible to have useful price transparency on. The average patient may almost entirely interact through the medical system (just off the top of my head) through the window of just drug prices, professional fees, and lab tests/imaging. That's certainly plenty but it might just be 3/100 total things we deal with, and those three are a lower percentage of my actual workload than you might think. Two of the three are totally reasonable and many places will actually have better price transparency if you ask for it but if you try and pass legislation and include the other 97 it becomes an exploding fucking mess.
Meds (well, outpatient ones) and testing (well...outpatient again) are generally reasonably self-contained and it would be sensible to try and get it done at a cheaper place. Hospital based care? Procedures outside of very careful ASCs? Useless. Lots of things get sneaky though - the ultrasound is cheap, but who is going to read it? Is it going to get done automatically and a hidden professional charge or not covered by your insurance charge? Easy to mislead patients if you are unethical or by accident. Then people get mad and demand legislation which makes it even more complicated and confusing.
Professional fees also get super weird. I'm going to give a made up number for opsec reasons. If you come to see me and offer to cash pay my employer may or may not be okay with that. If they are it's going to be be a fairly reasonable number. Let's say 100 dollars for an hour long initial appointment (psychiatry shut the fuck up and stay out of this). If you are paying with insurance there is no number. None. It doesn't translate to anything directly, and if I have no cash fee schedule you can't even squint and go "it's 100 right?" No, it's a billing code, it doesn't relate to what's "fair" or what is "cost" it is all negotiation. State Medicaid pays me 20 bucks an hour for that billing code. We still take state medicaid even though that's less than the cost to run the front desk because my hospital gets a grant from the state government. Private insurance pays me between 40 and 140 dollars for that billing code depending on the insurance. If they decide to cover it. They may decide that on Tuesdays I must include the word "sneeze" in my note, and since I didn't no money for me (well, for my employer). Medicare pays 40 dollars and doesn't ask any questions normally but a few times a year they show up in my office and decide that half the charts need to include the word "mega-ultra-sneeze" since I didn't they are going to take back all of the money they paid me and fine the shit out of everyone.
That's just one way this is done, the more famous one is that my professional fees are 100 dollars but my employer charges 1,000 dollars and puts that on the bill and then the insurer pays between 15 and 200 dollars.
Sidebar: I don't recommend ordering yourself lab tests without physician involvement, it's easy to fall afoul of pretest probability and sensitivity/specificity issues. A big one I see right now is college age people will order themselves STD testing because they don't want to ask their doctor cause awk. Eh kinda harmless. Except these places will add on HSV, which you are not supposed to do (per AAFP) because a positive test result causes a ton of misery but only has a 50% change of being a true positive and there isn't any option for follow-up confirmation testing.
I just want to add, I mostly think your comment chain here is rad, even if I had a slight disagree, but there’s absolutely zero price transparency in medicine.
Zero.
I’m 40 and even tho I don’t go to the Dr a lot … there has never, ever been price transparency. In anything remotely close to medicine, for myself or anyone else I know.
That’s not your fault.
But not defaulting to the obviousness of a lack of price transparency is driving me up a wall.
I don’t find the doctor to have any less price transparency than the mechanic?
The mechanic will have a plan for what he is going to do (e.g., "I'm going to replace your CV joint."). He will then assemble an estimate for how much that is likely to cost. He will probably even break down that estimate in terms of parts and labor. He might even provide you options for different brands of parts at different price points.
Everyone involved knows that there is some uncertainty in that estimate. They might get in there and discover that something else needs to be done, too. Usually, at that point, they will reformulate their plan, potentially with multiple options, assemble similar price estimates for those options, then contact the customer, try to explain the situation (knowing that there is an inherent knowledge gap), and ask which of the options the customer would like to take. I did this as a job long ago. There are some sketchy mechanics out there, for sure. But if you want to succeed, especially in a market where being sketchy will become 'known', you need to be very proactive in your communication with your customers, including on pricing information.
Doctors take the same exact sort of uncertainty in their work as a gospel truth that the price is "fundamentally unknowable"... and so, they just refuse to tell you. If you really press them, sometimes they'll do it, but sometimes, they just won't (and sometimes, they'll lie to you and make something up; there are sketchy mechanics everywhere). They certainly don't provide anything comparable to what the 25th percentile auto shop provides on a routine basis.
Perhaps you were thinking of a slightly different concept, that they're similar in that there is a significant information asymmetry. Customers don't necessarily know if the mechanic's plan is motivated by the car really needing whatever it is, whether it's barely justifiable and mostly a scam to increase billing, or whatever else. Similarly, patients don't always know that sort of thing with doctors; they could also be concerned that a doctor is practicing defensive medicine rather than thinking about the patient's pocketbook and giving them only what they really need. These questions are probably near impossible to estimate; I would like to believe that doctors are actually equal to or better than mechanics (the median doctor is almost certainly better than the 25th percentile mechanic if I had to guess, unlike with price transparency). In both cases, the most common solutions are to just diversify your sources of knowledge. I gave an example of how diverse those sources of knowledge can be here, but an extremely common suggestion in both domains is to just get a second opinion.
Again, I don't find it difficult to get healthcare providers to give me pricing information. I go to lower-rent(often bilingual) healthcare providers in a blue collar part of a red state, so maybe it's just different sorts of clinics.
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