Fifteen or so years ago, I was watching Bill O’Reilly work himself up into a froth over medical costs, and he got particularly exercised over some specialists making huge paychecks; his retort, “C’mon, no doctor needs to make more than say, $400,000” rang a little hollow coming from a multi-millionaire commentator. Suffice it to say, my immediate and outraged email got no response. No, I’ve never seen anywhere close to such a salary, but some of my friends have – because they earned it.
It seems every time people start talking about health care costs, they immediately look at physician’s salaries. This is allowed by two easy, critical, and utterly wrong impulses: 1) Health care is a right; 2) Class envy. The former is a destructive idea at least as old as Bolshevism, and the second is as timeless as clubbing your neighbor in order to steal his mastodon carpet.
A liberal economist named Dean Baker is throwing his static curve into the ring, one more do-gooder making value judgments for everyone else smart enough to just listen to him.
He complains that, “The United States pays more than twice as much per person for health care as other wealthy countries.” Baker makes no mention of the crushing costs of regulatory overhead when he whines about foreign pharmaceuticals being less than half our domestic cost.
Instead he goes right to it: “But an unavoidable part of the high cost of U.S. health care is how much we pay doctors — twice as much on average as physicians in other wealthy countries.” Now watch this next math trick he performs: “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 in the country, that means we pay an extra $100 billion a year in doctor salaries. That works out to more than $700 per U.S. household per year. We can think of this as a kind of doctors’ tax.”
So he uses his assumption that doctors are overpaid as a basis for calculating an overpayment relative to how much non-US countries pay their docs. Baker’s circular logic should be the envy of an Italian traffic roundabout. An economist ostensibly trained to look at all variables and the specifics of context instead jumps on the boat to one-size-fits-all foreign shores. I can rip this guy’s nonsense by each individual sentence, cheerfully so, but here’s the meat:
– Doctors’ pay should be considered and calculated in line with other, less educated assembly line workers, and those rates should be subject to international norms.
– Doctors’ pay is artificially inflated by the existence of a training/licensing cartel that keeps our supply artificially low, and our prices artificially high: “U.S. doctors get to legally limit their competition. As a result, U.S. doctors receive higher pay, and like anyone in a position to exploit a cartel, they also get patients to buy services (i.e., from specialists) that they don’t really need.” Or we can just increase the supply by allowing more foreign doctors in, or – and regulars on this site know what is coming next – we can pick up the slack with nurse practitioners, adding “Less-Documented” to the LELT solution. Said the economist: “Another approach is to not only change the rules around who can practice, but to change the rules around what doctors do.”
(Please note, that it would be just fine with me if we got rid of the majority of licensing obstacles, and let competency be documented by individual specialty boards. That is NOT to be confused with the MOC scam, which has nothing to do with certifying competency. US doctors need not fear competing with foreign ones; but it is economically unfair to saddle domestic physicians with huge training and initial licensing costs, only to undercut them with less-invested competition.)
As for the “overuse” of specialists, how comforting it is to know an economist can determine what one really does or does not need. (Last year I had a family member with a vitreal hemorrhage, something on my best, most dilated-pupil day I would likely have been unable to diagnose, and definitely unable to treat. Sure, a portion of those resolve over time, and even if they do progress to a slight retinal detachment, did this person really “need” the definitive fancy laser treatment right then and there from a retinal specialist? It’s not like she didn’t have another good eye.)
The venom drips off this commoner’s pen: “If we compare our cardiologists to cardiologists in Europe or Canada, our heart doctors earn a substantial premium. The same is true of our neurologists, surgeons, and every other category of medical specialization. Even family practitioners clock in as earning more than $200,000, enough to put them at the edge of the top 1 percent of wage earners in the country.” Blowing the “top 1%” dog whistle is a sure-fire way to demonstrate worldly compassion.
– After claiming that a doctor cartel, Baker puts it to Medicare i.e. government to fix it all. He points out that teaching institutions have better financial incentives to train specialists – fair point – thereby implying that they could be squeezed to produce more PriCares: “Policymakers have a number of tools to use to introduce more competition, weaken the doctors’ cartel and get their pay more in line with counterparts elsewhere.”
– Another way to reduce costs is to generally reduce standards. If you’ve ever seen the quality of concrete construction in Haiti, you already have a handle on this. Baker wants to reduce costs by “changing the standards of care, the legal baseline that doctors and hospitals are expected to meet to avoid malpractice liability…To get around this, it should be possible for doctors, hospitals insurers, and other providers to refer to the standards of care in other countries as a legal defense in malpractice cases. This would not be a protection against genuine malpractice; it would just mean that the use of generalists would not be evidence, by itself, of improper care.” Now my eyes are crossing. This economist has the arrogance to reduce medical standards by thinking of them as arbitrary legal trips; he is taking on the airs of international legal expertise as though the French standard of care would be pertinent in a U.S. malpractice deposition; he insults the hell out of the very primary care docs he wants more of on the cheap.
Economist Dean Baker, whatever his other credentials, is so absolutely clueless regarding the delivery of medical care that it can only mean that Politico.com published his article to push a nakedly political position. Baker thinks that doctors set their pay scales, oblivious to the rate capping instituted by Medicare and Medicaid that have led to shortages and declining quality. I mean, I’m no economist but…
The uncharitable part of me is really hoping that Baker needs an expensive specialist visit very soon. He reaches a conclusion that identifies doctors as the enemy of The People, stating, ” But if we want to stop paying a $100 billion premium for health care that doesn’t make us healthier, we’re going to need to overcome those political barriers. Getting U.S. health care costs down is a herculean task; getting doctors’ pay in line is a big part of the solution. It’s time we broke up the doctor cartel.” There is no mention of reducing the costs of government in medicine, or the responsibility patients have toward driving up their own costs. Nope, the solution is for the great federal leveler to bring rapacious doctors to heal, and to further assume the daily burdens of those who toil.
Baker should be honest enough to read his concluding sentence to the surgeon about to take him into the OR for a coronary bypass: “The fact that most people like their doctors will make the effort harder. Most of us like our letter carriers too, but that doesn’t mean they should make $250,000 a year.”