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NPR Shills for Doctors

Thursday, 06 May 2010 04:49

Morning Edition ran a segment this morning telling us about the tragic plight of the poor doctors who don't know how much their reimbursements will be from Medicare next month. It gave us the doctors' perspective and also the perspective of a Medicare beneficiary who complained that she could not find doctors who are willing to work for Medicare's pay rate.

It would have been helpful to include the perspective of an economist who could have told listeners that physicians are the most highly paid profession. An economist also could have told listeners that our physicians are paid far more than doctors in countries like Germany and Canada, which is one reason that the U.S. health care system is so uncompetitive. An economist also could have discussed the protectionist measures that keep the pay of U.S. physicians so far above world levels.

Finally, an economist could have ridiculed the idea that physicians will en masse stop accepting Medicare patients. The logic is very simple. There is no large group of wealthy potential patients that is underserved now. In other words, wealthy people already have all the doctors that they need. This means that if the nations' physicians decide that they will not accept the 40 million Medicare beneficiaries then they will have no way to make up this lost income. They will have to get by on a lower income. The threat to just serve higher paying patients is nonsense.

Comments (21)Add Comment
written by zinc, May 06, 2010 6:57
Paraphrasing wikipedia "What happens when an irresistible force (the decline in American middle class wealth) meets an immovable object(the monopolistic rise in health care costs)?" ("Can God create a stone so heavy it cannot be lifted, not even by God Himself?"). I don't know but we are in the process of finding out.

The paradox should be understood as an exercise in logic, not as the postulation of a possible reality. According to modern scientific understanding, no force is completely irresistible, and there are no immovable objects and cannot be any, as even a minuscule force will cause a slight acceleration on an object of any mass. "

We should prepare to be bomarded with a continuing litany of wails from the unmoveable object even as the irresistible force gains momentum. The Plantation Capitalists are moving with increasing impudence to reduce the distribution of societal wealth through the right wing stacked "deficit reduction commission", ie, ultimate death panel. At least current retirees enjoyed a system of defined benefits pensions to supplement social security. Future retirees will have social security. The Japanese tails of the aged resorting to shop lifting and starvation will be the next American import in the society too dumb to take care of themselves.
written by izzatzo, May 06, 2010 7:03
Bubba, since Chickens for Check-ups in Nevada has been a huge success, especially since Medicare now pays doctors in chickens, let's target the rich patient market with Rolexes for MRI Scans until it's saturated with barter goods as well. These poor doctors will be rich in no time, at least in real terms.
Neo-con Propaganda Radio?
written by nassim, May 06, 2010 8:23
That is what NPR stands for. Anyhow...

Under NAFTA's notion of free trade, can a consultancy (service) trade freely across borders, or is "free trade" limited to goods?

If so, there are hundreds and thousands of doctors outside the US who could set up clinics in the us by forming service companies in Mexico or Canada.

The other option is to setup clinics ran by certified nurses with on line connection with great doctors in other countries (such as Iran, where stem cell research is heavily funded) and charge 1/10 of what usual medical office visits cost.

Thus, you can get insurance only for major problems only with a $10,000 deductible and still save money.

The preventive benefit of such clinics will be immense. They can read x-rays and lab reports almost instantly via the web. If drastic measures are needed, you head to your monopoly hospital and dip into your deductible, which ironically is actually tax deductible.

Most nurses know more about the human body than a group of people who by profession, have access to all kinds of "drugs". Next time you see a doctor, check his eyes. Usually drug abuse shows there first. There are instructions for checking the eye for body's chemical imbalance.
written by skeptonomist, May 06, 2010 8:59
Since physicians basically charge what they want in the "free" part of the market, they can increase charges to rich people, blame it on socialism and have more leisure time.
Weak Journalism
written by J Jones, May 06, 2010 12:18
As a former local TV news reporter with more than eleven years of experience in the United States, I am able to confirm that the morning news meetings that decide what and how stories get covered are often exercises in economic ignorance mixed with bias in favor of the wealthy class of the U.S. United States news coverage is broken. Let's admit that to ourselves. After we finally admit that our news models are utterly corrupt and broken, let's fix them.
Cannot find doctor?
written by bakho, May 06, 2010 12:29
According to surveys, only 1 in 6 physician offices does not take Medicare patients. I can understand that more doctors do not see Medicaid patients. More information would be useful. For instance, are these areas that have doctor shortages? (Many rural areas). Is Medicare the primary obstacle? Or is the market underserved and even people who are too young for Medicare have trouble finding doctors? I am not convinced that these anecdotes are informative.

"About 87.4 million people are supported by government-sponsored health insurance, according to the Census Bureau, but a recent report shows that 83 percent of medical offices accept Medicare and only 65 percent accept Medicaid."

Who will become a doctor?
written by Hippocrates, May 06, 2010 3:48
The idea that doctors make big money is out of date. Ask your doctor. I asked mine: his income per work hour has fallen 75% since 1990, due to HMOs.

If you're sure that's a good thing, think twice.

It takes 12 years of school (college, grad school, residency) to become an MD. While most twentysomethings were saving for their first house, my spouse was working 16-hour days for no pay, for a decade, earning the MD.

After this ordeal, she emerged with $300k in school debt, only to find she earns less than a night-call plumber. Ten years later, that is still true.

That's our problem, not yours. For now.

But in 15 years, it will definitely be your problem. Fewer qualified people will enter medicine, because it has become financially irrational to do so.

We are fortunate to have 3 children with IQs over 160. You can be sure that none of them will be your doctor. Maybe that is a worthwhile tradeoff for lower healthcare costs, but I'm not so sure.
"Who will become a doctor?" gives fair warning
written by tew, May 06, 2010 4:23
An economist would not simply compare a income rates, but would compare expected lifetime net income (and would take it as an hourly rate, including all of the hours worked to gain access to the profession - e.g. education and training).

I have a few complaints of my own about how medicine is practices and agree that the strong arm doctors' union prevents competition and limits choice.

However, head "Who will become a doctor?"'s warning. You can use and abuse the current batch of doctors, because they've already invested in their careers - their educations are "sunk costs" (as an economist would say). However, those considering medicine may choose not to enter the profession due to the high cost of entry.

Of course in many other countries with more socialized medicine the government (e.g. taxpayers) pay for the medical school. The doctor's also have sharply limited liability. So they pay more than meets the eye.

But don't worry. There will be "enough" doctors. It's just that fewer of the best and brightest will enter the profession. We'll be getting people who ten years ago couldn't have gotten into medical school due to sharp competition.
Who will become a doctor?
written by jm, May 06, 2010 5:06
The issue Hippocrates raises above can be solved by decreasing the cost of medical school and increasing the pay of grad students and residents.

It seems that one reason why medical school costs so much is that the teaching staff are paid more than $500k (take a look at the remuneration in the California public universities). Another may be the deluxe physical plant of so many US hospitals, and inefficient use of very-expensive equipment.
written by skeptonomist, May 06, 2010 5:45
I think hippocrates is the name of the robot in the AMA offices which cranks out boiler-plate propaganda about how doctors can't make a living anymore.
"The best and the brightest"?
written by RG, May 06, 2010 6:53
If salaries get closer to those in Germany or Italy, quality of physicians may well go up.
The most vain and ambitious may decide to go into other professions. And if the salaries go down, med schools won't be able to get away with overpricing their product so much, so fees will have to go down too.
written by diesel, May 06, 2010 10:04
I think Hippocrates is having a little fun at our expense. He and his wife should know that, if their children have IQs over 160 then their intelligence would be underutilized as physicians. Most work physicians perform is routine and doesn't require a towering IQ. Research or original design would seem to hold greater rewards for exceptionally intelligent people. I suspect he knows this and salary doesn't enter into his decision.

It is tiresome to hear physicians proclaim that they wouldn't again choose their profession given the bookkeeping headaches and/or inadequate pay. The appropriate response to this is, "If salary was your only motivation, no wonder you're unhappy with your career choice". And, the sooner the field attracts people who truly want to practice medicine for its own sake, the better off we'll all be.
What kind of doctor is hippo's spouse?
written by Aditya Savara, May 07, 2010 6:31
A doctor getting paid so little is not the norm. Perhaps he is quoting "take home pay after paying her debt off". I know several doctors, and all doctors I know have starting salaries that are much higher than what hippo makes it sound like. Hippo must be including expenses rather than base salary. And once her debt is paid down, she will have tons of money.
written by Vara, May 07, 2010 12:46
I heard that story too, and at the same time wondering what Dean Baker would say! One thought though, I believe it was about primary care doctors who are probably the least compensated. I would go after the big fish, cutting payments and discouraging unnecessary procedures. If anything, PCP should get reimbursed at a higher level and we should have more of them, don't you think
written by Stephen, May 07, 2010 1:47
I am currently a second year medical student. I couldn't agree with Dean more. One refrain I constantly hear is "But I could have chosen to be an investment banker/lawyer and made a ton of money instead of being a doctor..." It cracks me up that people can say this with a straight face, as if OF COURSE they would be the I-banker that made partner when very few do... or OF COURSE they would go to Georgetown law and then make partner at a high-end firm. Furthermore... dont' fall for the "malpractice makes it expensive to be a doctor" line. People like this forget that lawyers, architects, contractors, plumbers and many other professions have to pay professional liability insurance. Besides... look at the stats... for every 7-10 people killed/maimed by their doctor, there is 1 malpractice lawsuit. Law may be the vocation of greed... but medicine seems to be the vocation of pride. By the way, shouts out to RG... you're right on the money. Doctors should be paid less... to avoid attracting vain bastards. By the way... remember those scare ads that were put on the air to kill the Clinton health bill? Guess who did that? The AMA. Just like they accused Truman of "following the Moscow party-line" when he proposed a national healthcare system. A horrible organization- a guild for doctors.
Rarely agree with you but
written by cas127, May 08, 2010 3:25
...this time you more (or less) have the situation nailed.

However, will President "Medical Cost Control" have the spine to demand that Congress reject the Medicare SGR (for more-or-less the first time e-vah)?

Given the dancing around of late (particularly around the passage of health care "reform" (AKA "The slow walk to single payer")) Obama and Speaker Rictus didn't look particularly steely spined.

They looked more like they were in let's-make-a-pharma-type-deal mode.

Time will shortly tell.

And why is it beyond DC's "intellectual" grasp that an interim step could be attempted - namely the compulsory disclosure of all physician/hospital prices using the standard CPT codes - to at least facilitate comparison shopping by independent consumers?

At least *attempting* this first would have gone over much, much, much better than the centralized command-and-control system that DC is clearly establishing the conditions for?

Why does every "improvement" contemplated by DC mysteriously involve the direct routing of decisionmaking (and hundreds of billions) through DC?

Funny how that works out.

Choosing between the Medical Industrial Complex and the Government is like choosing between rats and snakes for most people.
Ignorance about M.D.'s
written by Mike, May 08, 2010 4:29
I'll start off by saying that I'm an M.D.

I generally agree with Dean Baker on almost everything. But there is one notable exception. And that's Dean's attitude about doctors.

Dean is completely off base in this area. For all of his education and knowledge of economics, he's very un-knowledgeable about doctors--especially about the economics involved.

To begin with, less than 4% of total US health care spending goes to paying doctors. This information comes from calculations from information provided by the US Bureau of Labor Statistics. If you doubt these numbers, you can got to my own website where I've done the calculations for you (assuming anyone is actually interested in knowing the truth.)


The total compensation of physicians in the US in 2005 was $97 billion. The total spent on health care is ~$2,500 billion. As stated above, this comes out to less than 4% of the total. As such, if physicians worked absolutely for free, costs would be reduced less than 4%.

Doctors are most certainly NOT the cause of increased health care costs. Their share of the health care dollar is minimal.

Let me give you a real life example of 1 physician's compensation (my own). In 1994, when I finished my Internal Medicine residency, the going rate for locum tenems physicians (temporary physicians) was $65/hour. I actually worked on several jobs for that amount.

In 2010, the going rate for locum tenems physicians is...$65/hour.

In 1994, rent for my 2-bedroom apartment in Orange County, California, was $600/month. In 2010, rent for my 2-bedroom apartment in Orange County, California, is $1,250.

There's been a 100%+ increase in my cost of lodging since 1994. At the same time, there's been a 0% increase in physicians' compensation in California.

Since I'm actively seeking employment at present, I'm very up-to-date on this information--having applied for over 400 jobs in the last 2 years.

If you think the increased cost of health care is being driven by physicians' compensation, you are wrong.

VERY wrong.
written by Xelcho, May 08, 2010 9:46
I enjoyed reading your comment. Did you by chance get a moment to review the comments made by others on this issue? I did take the time to visit the forum you linked in your post.

I appreciated reading about doctors who take issue with paying malpractice insurance, as I take issue with paying error & omissions insurance as a civil engineer. What I found interesting is that the amount I pay is on par with what the doctors pay for insurance. Additionally, I hold state licenses as do drs, as Stephen pointed out in his post.

I think it will be very difficult to persuade any group of Americans outside of say Citigroup, Goldmansachs or Bank of America that a group of professionals who earn on average $165k/year are suffering when the median income in the nation is under $40k/year. I guess that if a group that is earning in excess of 4 times what the average schmoe is earning has a problem then it should be considered an "issue".

Additionally, your analysis is not clear what the balance of the US health care is buying, that information is important to appreciate your point.

Further, how does the income of us drs fare against those of other western, first world countries?

I am sorry to hear about your personal situation. I can appreciate your situation, I too was unemployed and am fortunate enough to have prerequisite skills and licenses that allow me to start my own business.

What I realize is that unlike those with the blue collar jobs we, meaning you and I, with state licenses and approved educations, enjoy the protections provided by the state and federal government on licenses and that educations attained outside of the us are virtually meaningless to licensing boards. Therefore our expectant wages reflect that constriction of supply of licensed professionals, imagine what the wages would be if US state licensing boards recognized even a portion of those educated in China or India, and did not have the ridiculous H1B requirements.

Operating in a vacuum works for the US media, but typically not for those that read from sources such as this.

Thank you and I look forward to the additional information.

RE: Who will become a doctor
written by Hippocrates, May 10, 2010 12:48
My earlier comment has so far earned an impressive minus-5 rating. People are understandably skeptical of the claim that doctors no longer make big bucks. And it's true some specialists do, but it's not the rule.

So let's turn this around: if you are aware of a job opening for a general-practice MD in southern California that pays more than a night-call plumber (net of malpractice insurance), please post a link. We would love to be wrong on the facts.

In the meantime, I will be guiding my kids into plumbing.

Rather than debate further, just remember this prediction: in 2025, America will have a shortage of qualified doctors. This will show up either as a labor shortage, or (more likely) as an increase in malpractice. We'll shake our fists from our respective rocking chairs and see who was right. :-)
written by eric, June 19, 2010 4:24
This "economic" analysis is absolute drivel.

1. Doctors in other countries DO NOT go into debt like doctors here (their education is paid for).
2. Doctors here work far more hours than other countries
3. Do you think that $60 dollars for an office visit is ridiculous when people are paying $200 for shoes and ipods? Where has priorities gone in this country?
4. Doctors have to pay ridiculous overhead nowerdays to be compliant with the mountains of red tape thrown at us. 70% overhead isn't unusual. For every minute the doc spends with you remember he has to spend 2 minutes documenting, filling out paperwork. His staff probably spends 10 minutes for every 1 he spent with you.

Want to save money on healthcare in the US? ELIMINATE THE OVERHEAD BURDEN ON DOCS. ELIMINATE THE EXCESSIVE MALPRACTICE. Who wants to practice in fear? Finally, admit to yourselves that the only way to limit cost is rationing of care. Unlimited care and expensive treatments are clearly a path to bankrupcy.
written by eric, June 19, 2010 4:35
@ Xelcho

If you think 165k a year is too much for a doctor, it shows a basic misunderstanding of math and finance (which I admit most Americans don't understand). I'm surprised as an engineer you don't comprehend.

First, calculate for me if you'd rather make 75k/year, but start earning 8 years earlier (when you graduate college rather then when you finish residency).

Second, add in the fact that for the 165k/year you must take on 250k of debt (average cost of 4 years medical school+ interest now).

Next, I want you to adjust for hours worked. Physicians work on average 60 hrs/week (after they finish training - training is usually 80 hrs a week), and sacrifice many nights and weekends.

165k/yr still look so great? Oh, don't forget you risk losing your licence for malpractice every patient you see.

Sure, if you compare that to 40k it might be worth it. But if you compare it to the alternative opportunities those docotors had - believe me, its not worth being a doctor any more.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.