When did doctors’ earnings get so big?
Weren’t they more modest at one time?
In all the movies from the 40’s and 50’s doctors may have driven a Buick, but never a Mercedes.
And there was never the running joke that they were sought after by golddiggers.
I think their salaries must have taken a disproportionate jump when insurance started insulating patients from fees, so the market advantage shifted.
So, the question is did this actually happen, and when?
It happened when med school became so expensive. Remember college costs rise around 3% a year. It happened when people started suing their doctors, and malpractice insurance ain’t cheap. Sure, doctors make a lot more money now, even after all of those costs are paid, but they have little time to enjoy it in most cases.
Lissa’s right. It isn’t cheap to be in the medical profession. You have to pay for insurance, training, supplies (especially if you are a free agent under contract to a hospital), and you still have to pay down student loans (med schools are expensive places, especially for the students). That is why doctors charge so much: If somebody sues you for a few million, you sure as hell better be able to pick up the tab, as well as the insurance rate hikes, plus all the lost business.
That’s fine, recounting only the costs, but I’m asking about the net.
Your explanations only account for why they should be poor.
When did the field become rich.
Because when someone’s life is on the line, you can charge them whatever the hell you want if you can save them? I’d imagine doctors would be rich anywhere around the world. Where money is not important, they’d at least have a good deal of power. That aside, from what I saw on a Discovery/TLC program, currently doctors are actually not making as much as they used to in the old days (I can’t remember the exact times). The rise of HMOs and such has actually decreased their earnings somewhat. Unfortunately, I can’t remember all the numbers they put up and the exact mechanism which causes their income to go down, but there you go.
I don’t know about the US, but when I was working as a pest controller I was thumbing through commercial insurance guides. Turns out malpractice insurance was cheaper than the equivalent public liability insurance for carpenters, electricians or pest controllers. We get fed that ‘high malpractice insurance’ line by the AMA here as well, but at least 5 years agao it simply didn’t stand up.
As for needing to buy equipment, I can’t think of many trades/professions that would use any less material than a GP. In Oz at least we get charged separately for anything that isn’t basically a general consultation, so all that is really bought is disposables (tongue depressors, pens etc.)
I think it’s fair to say that MD’s charge as much as they do because they can, not because they have to. They simply have a very good union that allows them to do so.
$.02
I wonder who would track that kind of data?
Sorry, Concurrent posting.
Re: Zor “The rise of HMOs and such has actually decreased their earnings somewhat. Unfortunately, I can’t remember all the numbers they put up and the exact mechanism which causes their income to go down, but there you go.”
I wonder who would track that sort of data?
“When did doctors’ earnings get so big? Weren’t they more modest at one time?”
They were more modest back when a haircut cost a quarter.
“In all the movies from the 40’s and 50’s doctors may have driven a Buick, but never a Mercedes.”
In the 40’s and 50’s Buicks cost more than Mercedes.
“And there was never the running joke that they were sought after by golddiggers.”
I think if they are sought after by golddiggers it is because they tend to be such easy marks.
“I think their salaries must have taken a disproportionate jump when insurance started insulating patients from fees, so the market advantage shifted.”
I don’t think there is any evidence for that.
“So, the question is did this actually happen, and when?”
The AMA tracks physicians earnings and, IIRC, publishes median earnings by specialty ever year. Earnings growth has either flattened out or reversed, at least for some specialties, in the past 5-10 years.
Most physicians have enjoyed comfortable earnings in the U.S. for a long time. This is partly due to the licensing requirements of state medical boards that make it difficult for someone without a lot of expensive training to obtain a medical license. However, other factors are in play. For example, being a skillful physician requires talents not everyone has; perhaps not talents as rare as those required by a major league pitcher but talents more rare than those required by a Piggly Wiggly manager. Another consideration is the hours traditionally put in by physicians. Almost always much more than 40 and often 60-80 per week. Compare with the hours put in by practitioners of a relatively poorly paid profession, such as teachers. Then there is the training and apprenticeship. Years ago doctors did college, four years of medical school, and one year of internship. They often weren’t paid during their internship. This meant they didn’t have ANY income until they reached perhaps 27 years of age. By age 27, a plumber might already have reached his peak earnings and might already have earned enough to own a house, car and boat. It wouldn’t be too surprising for a physician to try hard to make up that earnings gap real fast. Currently, physicians who have graduated from medical school are paid during their post graduate training but their hourly wages are abysmal, most do 3-6 years of postgraduate training, and they often have tuition loans to pay off of as much as $100,000.
I wouldn’t argue that U.S. physicians are poorly paid (except, perhaps, for psychiatrists and pediatricians) but if you look at their net lifetime earnings divided by the hours they work they don’t do all that much better than many other white collar workers. (Some years ago I read an analysis that said that dentists did better economically than MDs when you considered the shorter hours they work [been to a dental emergency room lately] and their shorter training. But that’s probably not true any longer since dentists ruined their one livelihood by promoting fluoride which has put a lot of dentists [or at least several medical schools] out of business.)
Look at what they have to go through. Could you practice on cadavers, go through all that bullshit. Even when you are an intern you are still going through long hours at modest pay. You won’t even be able to make a dent in your loans until about 30 years old.
Also, the gravy days of MD’s are a littli dryer with HMO’s calling more shots and expecting them to go through 40 clients a day. If your a specialist for a hospital, your are constantly on call (thank God because after an auto accident after 2a.m. about 17 years ago I was in great need of an orthopedic and plastic surgeon). Get to psychiatry and I would go nuts. Doctors get paid 150 to 200,000+ a year. Good money but it is definitely not an 8 to 5 job.
I know a few doctors personally and have asked about their expenses.
As it was explained to me, when they go into private practice they have to buy all of their equipment, though some purchase used gear through resale houses or from other doctors, which has become increasingly costly because of the trend of lawyers encouraging people to sue medical equipment makers when they can. Then they have to pay for their office, the basic insurance on their office and all office supplies like filing cabinets, desks, chairs, wall pictures (and subscriptions to all of those boring books in the waiting room).
Then comes the employee wages, medical insurance – most doctors will provide them with excellent medical coverage and pay up to 50% of the premium – accountant, workman’s comp. insurance, and, when necessary, unemployment. (Your ex-boss gets to pay 50% of your unemployment if you get fired or resign for an acceptable reason.)
Then comes medical supplies in the form of medication, syringes, b/p cuffs, bandages, instruments, and so on, aside from free samples given by pharmaceutical companies. Costs on the medications have soared because of lawyers encouraging people to sue drug companies.
Then comes his liability insurance. The hiring of an office manager. Computer and phone systems. Drug storage systems. Security. (Greens fees and up to date golf clubs.) Subscriptions to dozens of medical journals. Power bills. Office maintenance and grounds keeper. He virtually has to be a paying member of several medical organizations and social groups if he wishes to have good cooperation in the medical community.
Then comes malpractice insurance, which has been steadily increasing because of lawyers encouraging people to sue doctors for any possible reason. Then the retention fee for his lawyer. (Select any group of doctors and no matter how great they are, 99% will have been sued several times within the last 5 years. The trend of suing one’s doctor over anything has increased something like 1000% since the 1960s.)
One doctor explained to me that since he accepts Medicare payments, something many doctors are stopping, (Medicare pays 30% of 80% of a medical bill), he works the first two weeks to cover office expenses, the third week to make up for what Medicare would not pay and for bills he will never collect, 3 days of the last week to cover malpractice and legal fees, and the last 4 days go to him and his family.
Not much left, is there? Many doctors band together in clinics to get group rates on insurance and expenses and to be able to keep more than one lawyer on retainer. The latter they need, because people will sue a doctor if he did not laugh at their jokes or they feel he applied a Band-Aid wrong.
I also know doctors who are in specialty areas for the money alone. They are good at what they do and know it and if you want their services, then you pay for them. Many plastic surgeons fall into this league. So do neurosurgeons. Some medical offices I’ve gone into are sparse and somewhat gloomy while some have luxuries coming out of the ying yang!
To me, if you walk into a very luxurious office, with a whole lot of real well dressed and very, very nice staff, free coffee and juices, stacks of readable magazines, lots of green growing things and soft music playing in the back ground, then be prepared to pay heavily for services rendered and no credit!
The days of the general practitioner carrying lots of folks on the books and charging $10 for an office visit are gone. You can thank lawyers for that. S**t rolls downhill. Every time someone sues a doctor, medical supply company, hospital, or pharmaceutical company, they up the cost of their services to cover their insurance premiums and out of pocket expenses.
Only the lawyers win and we all pay.
Every doctor I know, no matter how nice, no matter how skilled, has been sued or is involved in a suite. Every hospital, drug company and medical equipment maker has also been sued. Doctors and drug companies have been sued over administering medication for the side effects they caused, even when said medication was the best option for the patient, even though 99.99% of all medications can cause side effects and if the doctor had withheld the stuff, the patients health would have been in jeopardy.
When I was a child, people did not sue the doctor over understandable mistakes and he usually corrected such mistakes for free. Now folks smile, say they understand and match right from the office to the lawyer.
An excellent question. I think that the answer is simple market economics: Physicians earn what they do because they are highly demanded, exaustively trained professionals. And I mean exaustively.
My wife is a third year med student. Although I make a good living, we’re still on a shoestring; the loans we’ve taken out are far steeper than our college loans ever were. Required books regularly cost $50-$100 apiece. Not to mention that supplies are all “doctor-priced,” e.g., a $250 stethoscope.
It boggles me how she can learn all that stuff. She has to digest a thick textbook every few weeks packed with data on abstruse medical conditions, all while working in the hospital 10-12 hours per day, and often overnight (24 hour shifts) and weekends. And supposedly, things will only get worse when internship begins!
I don’t think it’s true that doctors all drive around in a Mercedes. First of all, med school graduates often earn in the $30,000-50,000 range. The six-figure salaries only kick in after completion of residency. As cooldude points out, most med students are at least 30 years old by that time, and have been MDs for at least four years.
Plus, there are some huge disparities between salaries for doctors–some physicians make ten times what others make, depending on specialty, subspecialty, and geography.
I don’t think there are any doctors on food stamps, but a few of my old college pals who went into e-commerce are already earning as much as an MD.
One of my first posts, so I hope I didn’t screw anything up . . .
Jetassisted,
Excellent post.
I think Doctors earn every penny they get. When my daughter was in the hospital for 12 weeks, it seemed like the doctors were always up there. They arrived early for their rounds, then they went to the office for appointments, and then they came late for more rounds.
The ones that seem to have the worst hours are OB/GYNs. When my wife was in the hospital delivering our baby, it seems like her doctor was up there all hours of the night.
I know that a lot of the expenses for OB/GYNs come from insurance. Nowadays, any time something goes wrong with a delivery or pregnancy, people blame the doctor.
jamesglewisf said:
OBGYNs were hit so hard by lawsuits some years back that there actually started to become a shortage of them nation wide. You are dead on when you said any time anything went wrong in pregnancy that the doctor was blamed. Several doctors were sued by charity cases, who walked into the ERs ready to pop with no prenatal care and when the kids came out deformed or with brain problems, they blamed the Docs, found lawyers, took them to court and won the suites.
Almost all medications have potential side effects and no doctor can be expected to know if a patient will suffer from them, especially those with child. Even with this fact, doctors and drug companies get slapped with suites when something goes wrong.
So many people in low economic conditions insisted on having kids then could not pay for them that OBGYNs now insist on something like half of their fee up front, before birth.
A doctor has to know an impossible amount of things, has to work long hours, deal with every type of personality imaginable, know hundreds of drugs and their potential side effects, scores of treatments and has to be careful of everything he or she does.
Here is a Fee Schedule for Medical services from 1938
in Lenawee County Michigan. (my grandfathers)
hereis a partial list of fees:
Capital amputation…50.00
Hernia…50.00
post mortems…15.00
house visits…1.50
Night calls, extra…1.00
Consultation…5.00
Transfusions…15.00
Operation for Tonsils…15.00
Removal of eye…25.00
IV Glucose, etc…2.00
IV syphilis including drugs 1.50
a big difference from today.
I can see why though after everyones excelent explanations.
Osip
Thanks for all the support, guys! As a practicing family practitioner, I’ve worked up to 120 hours a week in training, 80 hours a week in private practice, and average about 55-60 hours a week now! In one long day I saw a 10 day old infant who was born 3 months prematurely who wasn’t breathing well, an 8 week pregnant woman who spontaneously aborting, a 57 year old man who was having a heart attack but refusing to go to the hospital, an 80 year old having a stroke, a belligerent drunk who broke his hand punching his girlfriend (he missed her, and hit the wall), a case of liver failure in a 28 year old alcoholic, one suicide gesture who needed her wrists sewn up, and about 40 others with their myriad complaints. This is in my office, not an emergency room or hospital, and it’s a city/suburban practice, not in the 'hood. For these services I net less than six figures per year after expenses, insurance, fees, and taxes. And I’m probably at the peak of my earning power, and seeing a decline because of cost containment strategies. The bean counters who manage the practice tell me that if I want more money I have to work harder and bill more. I’d prefer more time to just think!
I’ll end here before I start ranting about lawyers and athletes, and all that boring stuff. I love what I do, but what a cost to get here! Granted, I could have gone into a more lucrative specialty, but I enjoy being a generalist.
Qadgop, MD
One book that gives some interesting perspective on the medical profession is “The Youngest Science” by Lewis Thomas. He talks about practising medicine in the early part of the century. Sure enough, doctors didn’t earn a lot of money back then. But they also couldn’t do much of anything except diagnose and send you home. They had no antibiotics, no blood tests, no CAT scans – pretty much nothing to drive the cost of treatment up, but also not too many ways of actually treating you. Training was essentially done by apprenticeship.
Once doctors actually became capable of doing more than providing comfort to patients, they were able to charge more for their services, but, as has been adequately documented above, the training and equipment requirements increased astronomically.
“One doctor explained to me that since he accepts Medicare payments, something many doctors
are stopping, (Medicare pays 30% of 80% of a medical bill)”
You should see what Medi Cal, which is what ‘welfare’ uses for medical insurance, pays: 12% That’s what a dentist told me.
I would not be surprised to learn that US trained doctors with the costs of training find it hard to compete with those who immigrate.
Think of it like this, if it costs x dollars to train a medical proffessional and with the necessary supervision since it will take a good few years before that student will be allowed to work moreorless on their own, then it must be far easier to employ someone with the requisite skills from another country, such as European nations Canada etc, and no doubt more profitable too.
We in the UK lose many nursing staff, especially in the intensive care and resuscitation fields, to the US for various reasons.
In effect the US healthcare market is a burden on the healthcare systems of other nations.
And yet socialised healthcare in the US is often seen as a curtailment on freedom, just who is subsidising whom ?
I am surprised to hear that the UK is loosing nursing staff to the states. There have been a number of nursing strikes here in the states over the low pay of nursing. It in the papers a lot that nursing is a low paid position and because of this it is a week link in the health care system. The pay must be dreadful in the UK if they are leaving for US pay.
As has been mentioned previously in the thread what doctors can do for the people has gone way up this century. I assume the survival rate for the Capitol amputations for $50 in 1938 has gone up. I think that different services are being offered now that 60 years ago or even 20 years ago.
Doctors also have a really good union that has convinced people that the government must make it illegal for people to practice medicine that have not gone through an extensive licensing process.