[unionjack22]

https://www.cdc.gov/nchs/fastats/health-expenditures.htm

The US spent 3.2 trillion on health care in 2015. 100 billion is 3.12%. It doesn't seem like that big of a problem. This article is just capital scapegoating labour as the source of the inefficiency and insane costs that is particular to the American Healthcare system. If you want an honest discussion, look to the heart of the issue, which is the fundamental incompatibility with effective healthcare and America's fetishism of libertarian market dynamics. I mean even in the Swiss healthcare system which maintains private insurance participation, family doctors on average earn CHF 198,000/USD 201,732.

This is just a hit piece by big Pharma trying to squeeze dollars out of labour and we in tech who went through 4 years of schooling to collect comfy salaries for a few hours a day of productive work, we in tech who love to bash H1B's and foreign grads for increasing our competition, and we in tech who seldom reckon with real human suffering, fear, and death in our line of work, are absolutely eating it up. I absolutely look forward to the time when the squeeze comes and companies pivot to blaming us as the reason for the high costs of goods or as the limiting factor stopping execs from achieving the revenue gains they promised investors.

[cjlars]

If we spend $3.2TR on medicine and roughly 50% of that is 'overspending', as the article suggests. Then we have roughly $1.6TR in systematic inefficiencies. If the misapplication of occupational licensing for doctors are $100BN of that or 1/16th. What, specifically, is the other 15/16?

I think that author makes a good effort to itemize at least one of the components, now we should be asking what the rest are.

[chaostheory]

Could be wrong but I have a feeling that most of the other costs are related to either mitigating or fighting malpractice lawsuits. Do any other countries have a lot of medical malpractice lawsuits besides the US?

[cjlars]

Unlikely. Some quick googling gives an annual cost of $55BN for malpractice. Still, including the above, we're now at 1 / 10 of the overage.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/

[nradov]

You would be wrong. We have a natural experiment in that some US states have imposed caps on malpractice damages, yet they have experienced only slight decreases in overall medical costs.

[myhf]

> the misapplication of occupational licensing for doctors are $100BN of that or 1/16th

If you accept the premise that doctors are overpaid by 25%, then that represents $20BN of systematic inefficiency, or 1/80th.

[meej]

"a hit piece by big Pharma"

It absolutely is not. You should read up on the author's affiliations and background before making such inaccurate and uninformed statements.

[hudibras]

Among economists, Dean Baker is literally Big Pharma's worst enemy. If somebody didn't like this article about doctors, just wait until they read his proposals for the pharmaceutical industry.

[outlace]

You're correct that doctors' salaries are not the biggest source of excessive health expenditure compared to other countries. But the article is right that medicine (i.e. physicians) behaves like a cartel in that it places rules to limit supply and force salaries upward, even though there's no legitimate reason for this based on safety or otherwise.

Your local family doc has nothing to do with this, but there must be some powerful interest groups involved (at least historically) to make this the case. So it's actually that NON-libertarian forces (i.e. illegitimate regulations) are increasing physician salaries. If we had more of a free labor market for physicians, salaries would fall.

[byebyetech]

One of the force driving salaries up is strict control of immigrant doctors. Its is million times harder to qualify to work in US as a doctor compared to immigrant software engineer.

[nemo44x]

It's a huge issue in my opinion. Doctors who learn in Europe simply can't work here unless they get qualified in the state they want to work in, which is a waste. You see doctors from India and various other Asian countries because it's worth their effort to do so. But the USA should open it up to doctors from other countries to more easily work here. Simply passing a "Certification" or something should suffice.

[rvb]

I very much wanted to believe this, but the study you linked to lists "Percent of national health expenditures for physician and clinical services: 19.8% (2015)".

What do you think accounts for the discrepancy between 3.12% and 19.8%?

[js8]

These are total expenditures, not salaries. I think. So they probably include things like medical material or office rents.

[lloyd-christmas]

https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

Hospital Care:

Covers all services provided by hospitals to patients. These include room and board, ancillary charges, services of resident physicians, inpatient pharmacy, hospital-based nursing home and home health care, and any other services billed by hospitals in the United States. The value of hospital services is measured by total net revenue, which equals gross patient revenues (charges) less contractual adjustments, bad debts, and charity care. It also includes government tax appropriations as well as non-patient and non-operating revenues. Hospitals fall into NAICS 622 – Hospitals.

Physician and Clinical Services:

Covers services provided in establishments operated by Doctors of Medicine (M.D.) and Doctors of Osteopathic Medicine (D.O.), outpatient care centers, plus the portion of medical laboratories services that are billed independently by the laboratories. This category also includes services rendered by a doctor of medicine (M.D.) or doctor of osteopathic medicine (D.O.) in hospitals, if the physician bills independently for those services. Clinical services provided in freestanding outpatient clinics operated by the U.S. Department of Veterans’ Affairs, the U.S. Coast Guard Academy, the U.S. Department of Defense, and the U.S. Indian Health Service are also included. The establishments included in Physician and Clinical Services are classified in NAICS 6211-Offices of Physicians, NAICS 6214-Outpatient Care Centers, and a portion of NAICS 6215-Medical and Diagnostic Laboratories.

So as a quick summary, physician pay isn't the same as physician and clinical services. Both categories includes salaries of doctors. The statistic people are looking for isn't readily available in the numbers they are quoting. 3.12 and 19.8 are unrelated numbers.

EDIT: You can calculate expenditure relatively easily. Some assumptions: The link lists median pay at 295k, but Bureau of Labor statistics actually has it at 208k, and google's auto-suggest puts it at 187k in 2015. I'm just going to run with 250k.

250k median salary^ * 950k active physicians / 3.2 trillion US healthcare costs = 7.4%. 100b is a commonly cited number, but I can't find the source. My calculations put compensation at around 237b. Here's a corroborating source as well:

https://www.jacksonhealthcare.com/media-room/news/md-salarie...

I think this is a more relevant read than the politico one, given that these conversations always degrade into "my country vs your country":

http://www.healthcarefinancenews.com/news/physician-compensa...

Disclaimer: My father is a doctor, my mother is a nurse. I get really annoyed when this crap comes up on HN. Tomorrow we'll have an article that leads to a discussion about how the engineers on this site are making 150k-200k and complaining about being underpaid, all while criticizing other careers that necessitate higher educational attainment and greater career risk.

[vibrio]

"hit piece by big Pharma" seems a bit overstated. It has the same lack of nuance that an accusation by drug companies often make against AMA as a cartel in defending drug pricing. There are examples of gross abuses and genuine value on both sides of this--and also in hospital administrators and insurance ( did I leave anyone out?) Side note: My personal experience leads me to think that many specialist physicians are more than fairly compensated, and good nurses are less so for their value.

[chiaro]

I'm not sure what you intend on accomplishing by noting that doctor's salaries here are still more expensive than one of the most generally expensive western countries in the world.

Conspiracy theories about 'big pharma' on something from CEPR helps no one.

[hudibras]

No, no, no, you don't understand. Although our doctor's salaries are much higher than other countries, it's okay because our drug costs, medical supply costs, ambulance costs, hospital administration costs, and insurance company overhead costs are also much higher. Therefore, doctor's salaries just a small percentage of health care costs in the United States.

It's basic math, really.

[sol_remmy]

Two things you get wrong:

1. It's actually an EXTRA $100 billion per year - "Because our doctors are paid, on average, more than $250,000 a year (even after malpractice insurance and other expenses), and more than 900,000 doctors in the country" - the TOTAL we spend is about ~$240 billion dollars

2. That is SALARY ONLY. You aren't including the fully loaded cost of doctors: many get large Christmas bonuses, company stock, health care - that could easily be an average of 75k more per doctor

[jmull]

1. That’s the point: how much extra we seem to be paying vs other places (which have good healthcare).

2. You are wrong here. Click through to the source and you’ll find the number is for overall compensation, not just salary. E.g.:

    For employed physicians,
    patient-care compensation
    includes salary, bonus, and
    profit-sharing contributions. 
    For partners, this includes
    earnings after taxes and 
    deductible business expenses
    but before income tax.

I think you should be carful about making strong claims like that without checking the facts first.

[analog31]

Indeed, I've read that many if not most doctors are self employed. They also own the clinics and have access to "insider" investments such as purchasing and operating diagnostic equipment. In addition, I've also read that doctors make up a large proportion of the investors in medical provider businesses, and even the malpractice insurance industry.

I'd expect salaries to be an incomplete measure of where the money is going, and to whom.

I think the only way to get a true cost accounting of the health care system is to operate the whole thing. This may be why other countries have lower costs.

[nradov]

That hasn't been true for a while now. More and more physicians are employees of large provider groups rather than owners or partners in small practices. The provider organizations have to merge and consolidate in order to get negotiating power for dealing with payers.

[yomly]

This a thousand times. In our current world, if you are still reliant on a salary as your primary source of income, you're not especially part of the problem - you might very well earn 10x what other people are earning, but you're still hustling as we all are.

The people who pull the strings through their wealth, are able to lobby politicians, and or even other companies are the real problem.