Debate Magazine

Are American Doctors Overpaid?

Posted on the 26 February 2013 by Reasoningpolitics @reasonpolitics

Doctors_Money-300x200American doctors are vastly overpaid when compared to their peers in other advanced nations, according to Matthew Yglesias in Slate.

The last time the OECD looked at this (PDF), they found that, adjusted for local purchasing power, America has the highest-paid general practitioners in the world. And our specialists make more than specialists in every other country except the Netherlands. What’s even more striking, as the Washington Post’s Sarah Kliff observed last week, these highly paid doctors don’t buy us more doctors’ visits. Canada has about 25 percent more doctors’ consultations per capita than we do, and the average rich country has 50 percent more. This doctor compensation gap is hardly the only issue in overpriced American health care—overpriced medical equipment, pharmaceuticals, prescription drugs, and administrative overhead are all problems—but it’s a huge deal.

Doctors aren’t as politically attractive a target as insurance companies, hospital administrators, or big pharma, but there’s no rational basis for leaving their interests unscathed when tackling unduly expensive medicine.

Do you really want your doctors motivations to be financial? I want my doctor to be motivated by healing me and keeping me healthy, not by the money from the procedures and drugs he orders for me.

Right now, the incentive structure for doctors and health care organizations is simple: the more procedures the more compensation. My recovery or overall health does not factor in, providing I do not sue for malpractice.  To ensure patients do not sue, doctors order more tests than are necessary, creating a double incentive for unnecessary procedures.

For a stunningly in-depth evaluation of how hospitals set prices for their services, check out Time’s cover story, Bitter Pill. You will be angry.


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