Consider these two facts:
- Close to 25 percent of U.S. doctors are foreign-born.
- Each year, developing nations spend $500 million to educate health care workers who leave to work in North America, Western Europe and South Asia. As the most recent issue of the Journal of the American Medical Association (October 24-31) puts it: “developing nations are subsidizing healthcare in wealthier nations.”
According to JAMA, “These unchecked flows of health workers leave regions with the greatest health care needs with the fewest workers . . . 37% of the world’s health care workers live in the Americas, predominantly in the United States and Canada, yet these countries carry only 10% of the global disease burden. In contrast, Africa is home to only 3% of the world’s healthcare workers, yet it has 24% of the global burden of disease.”
On the other hand, according to the American Medical Association, some
35 million Americans live in areas where there are not enough doctors.
Nationwide, primary care doctors are in short supply, in large part
because they are paid so much less than specialists. Medical students
who know that they will graduate with tens of thousands of dollars in
loans say that they don’t feel that they can afford to become
internists or family doctors.
Moreover, the Kaiser Family Foundation reports that “the
nationwide physician shortage is affecting rural and inner-city
residents the most,” and following 9/11, “restrictions put in place on
foreign doctors who want to practice in the U.S.” have made the
situation worse.
Thirteen years ago, the federal government began issuing j-1 visa
waivers which allow foreign physicians to work in rural areas like
Appalachia and the Mississippi Delta for three to five years and then
seek permanent residency. But since 2001, the government has hiked
fees for the waivers, made tests that foreign doctors must take more
difficult, and tightened rules determining what counts as an
“underserved area.”
According to the Government Accountability Office,
the number of physicians in training with J-1 visa waivers declined by
nearly half over the last 10 years, from 11,600 in the 1996-1997
academic year to fewer than 6,200 in the 2004-2005 academic year. In
addition, in 2003 HHS took control of a Department of Agriculture
foreign doctor program and has approved only 61 J-1 waivers since that
time, according to the AP/Inquirer. The visa program is set to expire
in 2008.
We sorely need those doctors, advocates of the program say. Moreover,
those who support opening our doors to more foreign physicians contend
that by welcoming these doctors to our shores we might begin to curb
runaway health care inflation. TPM Cafe contributor Dean Baker has
argued, on more than one occasion
, that “increased competition from foreign professionals could lead to
dramatic reductions in the salaries of workers in the highly paid
professions.”
In a 2003 study Baker, who is co-director of the Center for Economic
and Policy Research, estimates that by adding roughly 100,000
physicians to our current pool of about 760,000, we could pull
doctors’ salaries down from an average of $203,000 to somewhere between
$74,000 and $126,000. For the average middle-class American family of
four he reckons that would lead to savings of $2,200 to $3,700 per year
What he ignores is that, by and large, foreign doctors who work in the U.S. practice in a separate market. Indeed, an analysis of
where these doctors work shows they are likely to be found in
geographic areas where the physician-patient ratio is low and the rate
of infant mortalities is high. Typically, they are found working in rural areas where their visas have sent them
and in inner cities where they treat the Medicaid patients that many
American doctors refuse to see because Medicaid reimbursements are so
very low.
The fees Medicaid pays vary state by state, but Princeton health economist Uwe Reinhardt gives an example
of just how parsimonious the government can be: “federal and state
legislators may be willing to pay pediatricians $10 to see a poor child
covered by Medicaid, but to pay the same pediatrician $50 or more to
see these legislators’ own children in the commercial corner of the
market.”
As we noted recently on Health Beat (here and here)
even when foreign and American doctors practice in the same area,
“medical apartheid” is the rule. In New York City, for example,
well-insured white patients see one set of doctors, while minority and
poor patients see another group, many of them foreign-born. Typically
those doctors charge less (or are paid less by their employers.)
In the late 1990s, when it seemed we had a surplus of physicians in
this country, the AMA fretted that doctors emigrating from other
countries might pull down physicians’ salaries. Not to worry. While
Medicare has put a brake on some doctors incomes in recent years,
foreign doctors have had little effect. What they charge low-income
patients ultimately has no effect on what the market will bear at the
high end—and that’s the end that feeds health care inflation.
Moreover, even if boatloads of foreign docs could bring down medical
fees—is it fair to poach physicians from countries where tens of
thousands of children are dying of treatable conditions? To put it as
bluntly as possible, how many children are we willing to let die each
year so that the average middle-class American family can save $2,000
to $3,700?
Baker recognizes and addresses the ethical problem. His solution is to
pay for the doctors we are taking: “it would be reasonable to expect
that developing countries would want to recoup the costs of educating
professionals who have left the country…he writes “and it would
be reasonable to expect that a rich nation like the United States would
be willing to share some of the economic gains that it receives as a
result of an increased supply of highly educated workers from poor
nations.”
But money won’t replace bodies. And in developing countries there are a
very limited number of individuals who have had the childhood
educational opportunities that prepare them to study medicine as young
adults.
Moreover, as Laurie Garrett pointed out in Foreign Affairs earlier
this year, thanks in part to Bill and Melinda Gates and Warren Buffett,
“there are now are now billions of dollars being made available for
health spending” in the developing world. “But much more than money is
required,” Garrett observes. “Decades of neglect have rendered local
hospitals, clinics, laboratories, medical schools, and health talent
dangerously deficient, much of the cash now flooding the field is
leaking away without result.
“The fact that the world is now short well over four million
health-care workers is all too often ignored” she continues. “As the
populations of the developed countries are aging and coming to require
ever more medical attention, they are sucking away local health talent
from developing countries."
Garrett, who is Senior Fellow for Global Health at the Council on Foreign Relations, offers stark examples of the “brain drain”:
- A 2002 survey of Ghana’s health-care facilities found that
forty -three percent of all clinics and hospitals were unable to
provide full child immunizations, while 77 percent were unable to
provide 24-hour emergency services and round-the-clock safe deliveries
for women in childbirth due to a lack of sufficient personnel. 604 out
of 871 medical officers trained in Ghana between 1993 and 2002 now
practice overseas. - Zimbabwe trained 1,200 doctors during the 1990s, but only 360 remain in the country today.
- Guinea-Bissau has plenty of donated ARV supplies for its people,
but the drugs are cooking in a hot dockside warehouse because the
country lacks doctors to distribute them. - In Zambia, only 50 of the 600 doctors trained over the last 40 years remain today.
- Kenya lost 15 percent of its health work force in the years
between 1994 and 2001, but has only found donor support to rebuild
personnel for HIV/AIDS efforts; all other disease programs in the
country continue to deteriorate. “. . . Life expectancy has dropped
from a 1963 level of 63 years to a mere 47 years today for men and 43
years for women.” (In most of the world, male life expectancy is lower
than female, but in Kenya women suffer a terrible risk of dying in
childbirth, giving men an edge in survival.) Although AIDS has
certainly taken a toll in Kenya, Health Minister Charity Kaluki Ngilu
primarily blames “. . . a public health and medical systems that are in
shambles. Over the last ten years, the country has lost 1,670
physicians and 3,900 nurses to emigration.”
Garrett reports that some developed countries are trying to address
the problem: “In 2002, stinging from the harsh criticism leveled
against the recruitment practices of the NHS (the United Kingdom’s
National Health Service) in Africa, the United Kingdom passed the
Commonwealth Code of Practice for the International Recruitment of
Health Workers, designed to encourage increased domestic health-care
training and eliminate recruitment in poor countries without the full
approval of host governments. . . No such code exists in the United
States, in the EU more generally, or in Asia — but it should.”
Meanwhile the World Health Organization has launched a “Health Worker
Migration Policy Initiative” that hopes to develop a roadmap and a code
of practice for health worker migration. As JAMA points out, the
worker’s rights must also be protected: “Correcting imbalances will
require a delicate balancing act that protects the rights of individual
workers to legally migrate while ensuring that global health care needs
are met.”
WHO hopes to develop a voluntary code of practices that nations can use
when forging regional or bilateral agreements. For example, the U.K.
and South Africa now have an agreement that allows time-limited health
care worker exchanges. In another case, the Netherlands has agreed to
provide funding and support for a pilot program developed by WHO. As
part of the program, the Netherlands has been surveying Ghanaian health
care workers in the Netherlands and Europe to identify their skill sets
and match them with needs in Ghana. The program is then arranging for
them to temporarily return to Ghana to share their expertise through
teaching and other assignments. JAMA notes that in some cases, “such
temporary work may open doors for the workers to permanently return to
their country.”
At the same time, developed countries also must wean themselves from
their dependency on foreign health care workers by “produc[ing] enough
health care workers to meet their [own] countries’ needs” observes
JAMA, quoting Francis Omaswa, co-chair of the WHO program. In the
U.S., this means figuring out how to turn out more internists and
family physicians while providing incentives for specialists that
might persuade them to distribute themselves more evenly around the
country.
In my next post, I’ll make some suggestions.
Thanks Maggie for the post and giving me an opportunity to respond. Let me make three points:
1) It is easy design a mechanism to ensure that developing countries benefit also from having their doctors work in the United States:
2) While foreign trained doctors may now be in a partially segregated market, it does not follow that this would be the case if their numbers doubled or tripled.
3) The enormous price differences between the pay of doctors in developing countries and the U.S. makes it inevitable that people in the U.S. will increasingly use the services. The only question is whether we go there or they come here.
On the first point, it would be a very simple matter to impose a modest tax on the pay of foreign trained doctors, which would be repatriated to their home country. This money would be used to finance the education of more doctors. For example, if 100,000 foreign doctors worked in the U.S., earning an average of $100,000 each, a 10 percent tax on their earnings would translate into $1 billion a year to support the education of more doctors in the developing world. This should allow developing countries to train 3 or 4 doctors for every doctor that works in the United States. And, this is before counting the benefits of remittances or doctors who choose to work in the United States for a period of time and then return to work in their home country.
Just as people in countries that sell clothes to the United States don’t go around naked, it is possible for developing countries to both send doctors to the U.S. and get better medical care for their own populations.
As far as the second point, it is always dangerous to extrapolate the effects of a small opening on the margin to a full scale transformation of the market. The United States has always imported some amount of clothes from the rest of the world. However, foreign made clothes did not transform the market until we removed the barriers that prevented foreign made apparel from flooding our market.
It is very difficult to imagine how we could have a huge expansion of the supply of foreign-trained doctors and it would not have an impact on the wages received by U.S. doctors. Would I be arrested if I went to see a foreign-trained doctor who charged half the fee of a U.S. trained doctor? Would insurance companies decide they didn’t feel like making more money and instead pay U.S. trained doctors twice as much as what they could pay an equally competent foreign doctor? This scenario seems highly unlikely to me.
On the third point, medical tourism is already a multi-billion dollar industry and its size if exploding. People will no go to India to be treated for bronchitis or other relatively minor ailments. However, for major operations, the savings can be more than $100,000, with patients receiving care that is of comparable quality to what they get in the United States. At the moment, most medical tourism takes place at the individual level, by people who lack health insurance. However, it is only a matter of time (likely very little time) before insurance companies start offering large price reductions to people who are agree to use their facilities in the developing world. There is no way to prevent this, unless we threaten to arrest people leaving the country for medical care.
It makes much more sense to have the doctors come to the United States then to have sick people travel half way around the world to get the care they need. We can organize this in a way that ensures that everyone benefits (except maybe U.S. trained doctors). The sooner we get on this track the larger the benefits will be.
Nice articles as being a student myself i’m too preparing to go USMLE ,its like crazy that every medical students are now preparing for USMLE to work and study in US.
Because we all think US is the final destination for money and popularity.
Well, if you start importing foreign physicians to lower the salary of physicians, you are going to need to import A LOT more than 100000 because medical students like me will not work for 70k to 120k. I also hold acceptances to 3 top 15 law schools so let’s just say my options are flexible. Many of the students in my class also have PHDs in biochem, degrees in electrical engineering, etc.
In addition to the mass exodus of current physicians and students you would create, no one would choose to go into medicine. You would be viewed as an idiot.
Finally, good luck getting 100000 physicians to come to America to make 70k to 120k. The reason they come to America is because the average physician makes 200k.
So just to be safe, you better import around 500000 physicians while the pay is high because you are going to need them for a long time as their is a mass exodus of Americans out of medicine, current college students do not choose medicine when there are greener pastures, and no foreign national in his right mind would take such a huge risk for so little return.
Chris — you wrote, “Finally, good luck getting 100000 physicians to come to America to make 70k to 120k. The reason they come to America is because the average physician makes 200k.”
I think that might depend on how encumbered these foreign-trained physicians are with debt. Most U.S.-trained physicians can start out $100K or more in debt, so they need a higher income to pay off the debt. If a foreign-trained physician has far less debt, they might be willing to accept a considerably lower salary, particularly if they are eager to emigrate to the U.S.
I think there are other issues besides pay, though, as you seem to imply. Another major hit — after student loan payments — is malpractice insurance, particularly for certain specialties.
Avg medical student loan burden is closer to a quarter of a million. mine was 200K but after residency compounding interest rates brought that up even higher. In my third year of practice my liability insurance was 22K. So at say, 80K a year, 22k to mal pract, 20k to loan repayment, and say a modest 15k to the IRS, I will be making 23K a year. I used to make 20k a year raking dog crap for parks and recreation and didn’t have to come in on nights or weekends.
Hospitals have tried the same stratagy with Nursing by recruiting, assisting with housing, placement, and test preperation to bring in more foreign Nurses into the US to ease the nursing shortage (thats code for drive down wages). Thankfully most State Nursing Boards have resisted pressure to ease the Standards. The first time pass rate in California for foreign trained Nurses has historically been less than 40 percent as opposed to greater than 80 for US trained. I have worked with a few who were from the far east on 2 year contracts at wages far less than a new starting Nurse. My observation is most were very poor patient advocates and critical thinkers. They were good at following orders which is all that mattered to some. Most of the ones I have known had to be moved out of the ER to less intensive settings.
Perhaps Dean Baker could explain how he arrived at the $2,000 – $3,700 figure. It has been estimated that physician salaries account for only 10% of our health care costs. If you cut their salaries in half, then there would be a 5% savings. If that savings represents $3,000 less spending on health care by a typical US family, then they would on average be spending $60,000 a year on health care. Obviously there is something wrong with either my or Dean’s estimates, as I am certain that the average household doesn’t have $60,000 in annual health expenses.
If we could, should we cut physician salaries in half to lower our annual health care costs by 5%? I would worry that many high caliber US students would no longer choose this profession, as their intellectual talents would allow them to pursue other fields with greater rewards and a better return on their educational investment. In fact, at those lower salaries, it would probably be more attractive to become a school teacher. Almost all school teachers have regular hours, holiday vacations, no evening or weekend call duty, and can retire on a state pension with full health care benefits at the age of 52, after 30 years of service, without having to pay off over $100,000 in student loans from medical school.
Hmmm, I wonder how much we might lower our school tax bills from cutting the salaries and benefits of our teachers. Any disgruntled teachers could simply be replaced by teachers from third world countries.
Dean, Deepak,Tim and Chris-
First, Dean, on the question of whether, if there were more foreign docs, there would be less apartheid.
Many Americans are wary of “less expensive doctors”–especially if they are seriously ill. And since 80% of our healthcare dollars are spent on people suffering from serious illnesses, we
can’t expect to save much by offering them “discount care.” In general, when people are that sick they are not bargain-hunting.They would rather take out a loan–or even sell their home–than to go to a doctor they don’t trust.
In addition, there is a certain amnount of prejudice at work here. Many Americans assume (without evidence) that foreign docs are not as well trained as American doctors. In addition, when they do encounter foreign docs in an ER or a hospital, Americans complain that they can’t understand them–even though an Indian doctor may be speaking perfect English.
In addition when you talk about sending money to developing countries to “pay them” for the loss of doctors, you ignore
Garrett’s point–Buffett, Gates and others are already sending billions of dollars to developing countries to help with healthcare.
Money is not what they need. They need trained healthcare workers who are famliar with the language, customs and fears of people in those countries. And there just aren’t that many literate, bright, healthy and willing young people available to be trained. Keep in mind that tens of thousands of young peole have been (and are being) killed by AIDS. Others are succumbling to other infectious diseases.
Moreover it takes more than a year or two to train a doctor–and these countires are looking at a crisis.
You write: “Just as people in countries that sell clothes to the United States don’t go around naked, it is possible for developing countries to both send doctors to the U.S. and get better medical care for their own populations.”
First, weaving cloth and treating patients suffering from complicated virulent diseases are very different tasks. The latter calls for an especially bright, dedicated and compassionate person who has had years of education.
If it were so easy to train more docs don’t you think that some of these countries where tens of thousands of children are dying would have done so?
When you talk about how, once trade barriers were removed, foreign cloth brought down the cost of cloth in the U.S. you seem to suggest that healthcare is a commodity, just like cloth.
While Americans are perfectly happy to wear cloth made someplace else, there are much less comfortable talking to a doctor from a different culture who they may not understand–and who may not understand them. I am not saying this prejudice is correct, but I am saying that if you are very sick and elderly, suffering from one of the serious diseases that accounts for 80% of healthcare spending, it’s understandable that you might be frightened if you weren’t sure the doctor understood you. (Just as, in Africa, European and American AIDS workers have run into problems communicating with African patients.)
Finally, on American patients going abroad for healthcare . . .Of course no one prevents them from doing so. And insurance companies may well begin offering packages for care abroad–which is fine.
But this type of medical tourism will continue to be limited to fairly well-educated upper-middle-class patients are are comfortable in foreign countires, and can afford to pay first-class airfare for themselves and a companion as well as the very high cost of a good hotel in a developing country (where the patient and companion can stay before and after the operation).
Finally, you don’t seem to be facing the ethical implications of suggesting that we should recruit doctors from countries where children are desperate for healthcare in order to come here and shave 10% off our national healthcare bill by caring for our poor.
As Rashie Fein once put it: “We live in a society, not just in an economy.” And I would add: “We live in a global society, not just in a domestic economy.”
Tim–You are righ. Chris ignores the fact that most foreign–born docs don’t have $120,000 in debt (the average for U.S. docs) which is why a $70,000 salary doesn’t look so bad.
In addition, wealth is always relative. If you lived in a country where someone earning $30,000 was considered a rich man, your idea ofa high
standard of living is very different from ours. You simply don’t feel the need for a 5,000 square foot house, or so many “things” to fill it.
Chris– All I can say is that, since you have options, I hope you take the option of going to law school.
You don’t sound terribly committed to medicine. Put it this way, when I’m old and sick, I really hope I don’t look up from my sickbed to hear someone say, “Hi, I’m Chris. I once commented on your blog.”
Deepak– Good luck in this country.
That’s right. Pull out the card that if I am not willing to work for peanuts that I must not be “committed” to medicine. We in medicine must show our committment by saying “I love medicine so much I would work for free”. Why is that? Why don’t teachers have to show their “committment” to the children by not having healthcare benefits or a pension? No one asks that of them.
Are you basing your opinion that I am not “committed” to medicine on anything other than the fact that I am not willing to work in medicine for 70,000 dollars/yr with 200 K in debt? This is the reason why doctors are so easily abused. Eat this poop sandwich or your not committed. Sacrifice your 20s or your not committed. Sacrifice your strong relationships with family and friends to work 100 hour weeks or your not committed.
Dan, ER Nurse and Dr. Matt-
Thanks for your comments.
First,Dr. Matt, you are right, Dean assumes that we are overpaying physicians without looking at how much debt physicians start out with, and what type of physicians foreign docs are replacing.
The vast majority of foreign doctors who come to the U.S. are trained as primary care docs and pediatricians. They are not replacing specailists at the top of the pay ladder.
Two years ago, average salary for a family practice physician or general internist in the U.S. was $146,000. And that’s an average–in the middle of a career, after years of education that leaves the beginning doctor with an average of $120,000 to $140,000 in debt.
And a new doctor earns much less. Right now, the going rate for a newly-graduated hospitalist in Manhattan (where doctors are better paid than in most places) is $105,000. (And hopsitalists are better paid than plain vanilla primary care physicians.)
After city, state and federal taxes, that leaves him or her with about $72,000. If you are paying off $120,000 in loans, and trying to rent or buy an apartment near the hospital (as a new doc, you’re on call–there is no way you can commute) you are going to be living on a tight budget.
And what you can look forward to, in middle age, is earning an average of $146,000–which, depending on where you live, may mean $105,000 to $120,000 after taxess. This is certainly a perfectly comfortable living in many parts of the country, but if you are trying to send a couple of children through college and your spouse does not bring in a large income, you’ll have to be very careful with your money.
So no, I don’t think we want to bring down the salaries of the primary care physicians, family docs and pediatricans (who are also at the low end of the scale) that more foreign docs would replace.
Keep in mind that most foreign docs come from low-income and middle-income countires that don’t have the facilities to train the specialists who make the highest salaries.
ER Nurse– I suspect it’s hard to generalize about all foreign nurses because they come from differnt countries and cultures. But it makes sense that they would feel less secure in their jobs and would be less likely to question authority (even if they saw a mistake being made) and more likely to simply try to do what they were told. . .
Dan– I agree with you that we will lose more family docs and internists if we lower their salaries . .
As for Dean’s math, there is one factor you are not taking into account.
Doctor’s salaries account for only 10% to 11% of the nation’s TOTAL health care bill (of roughly $2.2 trillion.)
But families don’t pay that bill out of pocket. 51% is paid by taxpayers funding Medicare, Medicaid, SCHIp, private insurance for government employees and other public programs like the V,A.
Of course “taxpayers” are, in fact, families, but they are paying on a sliding scale (insofar as they pay through income taxes and FICA deductions for Medicare from their paychecks.)
30% of the bill is paid by private insurers (who, in turn receive money from employers and employees, but again famlies aren’t paying directly, and some have high-deductible low-premium insurance or cheap insurance with a lot of holes in the policy, so they are not all paying an equal share of that 30% . . .
I haven’t done the calculations, but my guess is that Dean is right that a middle-class family could save $2,300 to $3,700 a year, on average, IF that family is willing to go to foreign-born less expensive doctors when they and their children are really sick–and their medical bills are highest.
Maggie,
I still don’t understand how a middle class family could save $2,300 – $3,700 per year by going to less expensive doctors. If total healthcare costs are $2.2 trillion and the population is 300 million that equates to health expenditures per person of $7,333. If 10% of that is attributable to doctors’ income, that’s $733.30 per capita. Physicians’ fees are roughly double that amount, but half of their revenue (on average) is consumed by practice expenses – rent, supplies, equipment, malpractice insurance and office staff salaries and benefits. However, doctors drive virtually all healthcare spending through hospital admissions, ordering tests, prescribing drugs, consulting with patients and doing procedures themselves. If the suggestion is that foreign docs not only make a significantly lower income but also drive far lower total healthcare spending per patient than American docs, then perhaps the savings could be in the range suggested. I doubt that is the case, however.
Thanks Maggie.
I wrote the message below earlier today but before I could post it, Barry beat me to the punch, but I will ditto what he said.
Am I still missing something in the calculations. I realize that these are estimates. However, using your figure that the US spends 2.2 trillion dollars on health care/year, and there are approximately 300 million US citizens, then the average amount that each citizen pays towards physician salaries would be $733 per year (2.2 trillion dollars x 0.1 (10% total healthcare cost as physician salaries) divided by 300 million. For a family of four the cost would be less than $3,000, so how does Dean arrive at his figure (half of $3,000 is $1500, not near his upper estimate of $3,700).
So if we cut physician salaries in half, the cost per citizen would drop to $367 per year. I don’t think saving $367 per year, or even if it were a thousand dollars, really matters if such reductions would negatively affect the quality and quantity(access to health care) of our physician workforce.
What I find amazing is that we are only spending 10% of our health care dollars on physician salaries. After all, they are the ones who are actually delivering health care. Has anyone ever looked at how this percentage has changed since 1900. I imagine that 15-20% or more of health care expenditures went to physican salaries in the early days, before the disproportionate growth in costly medical devices & pharmaceuticals, medical liability fees(and resultant defensive medicine costs), health insurance company profits and the administrative costs to deal with all of the above. Even if physicians worked for free in a fairy tale world, there would still be a health care crisis (2 trillion dollars spent on health care costs other than physician salaries). A crisis that will only get worse as our high health care consuming elderly population continues to grow and many of our citizens show careless disregard for personal responsibility towards keeping themselves healthy.
Doctor salaries account for only 10% of overall costs.
Docs provide the vast majority of healthcare services in this country.
And yet Baker thinks that taking 10% of the pie is too much? What a joke.
How much of the legal cost pie do lawyers take? I bet its a fuck of a lot higher than 10%, try more like 90%.
joeblow,
To support your point, after losing my house, my marriage, my practice and going bankrupt trying to provide health care I left clinical medicine. I now work as a consultant for the state, in the state reimbursement system the attorney consultants get paid current market value for thier services while us doctors get paid about 30% below standard doc pay. We are heavily undervalued, I love caring for people but won’t do it again at the peril of myself or my family.
Barry, Dan, Joe Blow and Dr. Matt–
Thank you all for your comments.
Barry and Dan– you are right about the numbers. Dean explains: I should correct one arithmetic item which is probably my fault for not being sufficiently clear in my paper. I was assuming that we could bring enough foreign doctors to cut average salaries by around 50 percent. Doctors in the U.S. on average receive a bit more than $200k a year (net of malpractice). We have around 800,000 doctors, which means that if we cut their pay by an average of $100k each, that saves us $80 billion a year or about $800 per family. I think the larger number was based on a situation in which we had free trade for all high-paying professional services.
In other words, savings of $2300 to $3700 per family assumes that we imported professoinals in several fields (not just docs) to bring down professional salaries in the U.S. . . .
Dan, Joe Blow and Dr. Matt–
On doctor’s salaries, they have gone up a lot since 1960, with some of the biggest increases coming in the late 1960s and in the 1970s. Before the mid sixties, the vast majority of doctors were general practioners, pediatricians, etc–there were far fewer specialists. And while GPs were fairly well paid, most were “upper-middle-class” rather than truly rich. This was before the gaps between the very rich, the upper-middle-class and the middle-class began to expand.
In the 1980s, as CEOs began to make millions, specialists felt that they, too, should make millions–after all, they had so many more years of education, and their work was both riskier and in many ways more taxing.
This is when salaries at the top of the ladder began to explode in many areas.
Today, some specialists, like many CEO’s are overpaid. We could find someone to do the job, just as well, for, say $750,000 (I’m pulling that number out of the air.) We really dont’ need to pay anyone $2 or $3 or $5 million to do a job well.
Medicare realizes that it needs to readjust reimubursements. Reimbursements for some specialites are too high in large part because, in the past, Medicare has relied on colleges of specialists to recommend how their reimbursements should be adjusted . .
In the meantime, the Medicare Payment Advisory Committee recognizes that internists, family docs, pediatricians and, in general doctors (like Dr. Matt) who practice what is called “thinking medicine”–talking to and listening to the patient, diagnosing, counseling, etc., are paid too little.
We tend to overpay for the most aggressive medicine using the newest, most expensive drugs and devices (which are generally overpriced, too) and undepay for preventive care, and managment of chronic diseaes. Because these areas of medicine are so much less profitable, we have too little preventive care, and thus too many avoidable hospitalizations where the patient receives the aggressive care that he might never have needed if he had received consistent primary care in the first place.
THANK YOU MAGGIE!! sometimes out in the field you feel like you are the only one who realizes this stuff.
maggie,
I’ve been trying to find data on doctors incomes before 1990 back to the 1960s and cant find anything. Please give us a link if you can. I agree with you in general that doctors incomes increased SPECIFICALLY because of Medicare being passed in the 60s.
Also you need to be careful about which source you use for average doctor incomes. You cant use job recruiting sources like Merrit Hawkins or others because they have a vested interest in inflating the numbers or using selection bias to pick out only their top guys. One of these “recruiting” services recently released a survey claiming that the average doctor income was 350k, which I knew was total bullshit. They are obviously blatantly making up numbers to drum up business.
The most reliable source for average doctor incomes is the US Labor Department. It is based on census data and has a much, much wider sample size, involving tens of thousands of doctors nationwide compared to only dozens or a couple hundred used by the other services.
According to the US Labor Dept, the average doctor made 160k before taxes last year.
Joe Blow–
Here are some numbers on doctors’ incomes:
Most recently: “In sharp contrast to other professionals, physicians’ net income from the practice of medicine declined about 7 percent between 1995 and 2003 after adjusting for inflation, according to a national study released today by the Center for Studying Health System Change (HSC).
“The downward trend in real incomes since the mid-1990s likely is an important driver of growing physician unwillingness to provide such pro bono work as charity care and serving on hospital committees,” said Paul B. Ginsburg, Ph.D., coauthor of the study and president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.
The decline in physicians’ real income stands in sharp contrast to the wage trends for other professionals who saw about a 7 percent increase between 1995 and 2003 after adjusting for inflation, the study found.
“Among different types of physicians, primary care physicians fared the worst with a 10.2 percent decline in real income between 1995 and 2003, while surgeons’ real income declined by 8.2 percent. But medical specialists’ real income essentially remained unchanged.” (You can find this report at http://209.85.165.104/search?q=cache:A62AQTdMZFQJ:www.hschange.org/CONTENT/852/+physicians+and+income+and+change&hl=en&ct=clnk&cd=16&gl=us
Here are numbers on what was happening in the 1980s:
“Average real physician income grew by a strong 24 percent from 1982
($125,500 in 1989 dollars) to 1989 ($155,800) (Exhibit 1). Almost all
of this increase occurred in the latter four years, 1986 to 1989.8 Surgeons’
and medical specialists’ incomes grew rapidly from 1982 to 1989 (by 33
percent and 3 1 percent, respectively), while general practitioners’ average
income was flat (only a 5 percent gain) (Exhibit 2). By 1989,surgeons averaged $220,500 in net income, more than double the
$95,900 income of general practitioners and 50 percent greater than the
$146,500 income of medical specialists.” (This is from Health Affairs, Spring 1992, “Trends in Physicians’ Income”)
Finally doctors’ incomes rose sharply in the late 1960s, not just because of Medicare, but because more and more Americans had insurance and Blue Cross/Blue Shield, like Medicare, let physicians set their fees without negotiation. (Blue Cross/Blue Shield had actually set this precedent before Congress passed Meicare; Medicare followed it because President Johnson realized that this was the only way he could get the legislation passed.)
i think it is a tragedy and a travesty that we depend so much on foreign doctors when there r so many intelligent folks here who cant get into med schools, cause of limited spots. i dont see why we dont open up a ton of more med schools, we are the richest country, aint we?
Dr. Rodgriguez–
I would like to see more American kids go to medical school–but only to become primary care docs, family docs, and pediatricians.
We have more than enough specialists–and research suggests that we will have enough to care for the baby-boomers.
Research also shows that in areas where there are more specialists (like N.Y., Miami and Los Angeles) patients see many more specialists–and are likely to be seen by 10 or more specialists during the final months of life–without any improvement in outcomes.In fact, often outcomes are worse.
The problem is that supply drives demand. When there are more cardiologists in a town they have the time, in their appointment books, to see more patients more often–and people in that town wind up having more unncessary angioplasties.
But we do need more primary care docs to provide preventive care–as well as many more nurses and nurse practitioners.
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Alcohol Treatment is not an easy task for people those who are helping other people to get back to normal life. It require specialized training and skill for treat these guys.
really the Dr are the main element of the society because the Dr play its role in the health of the environment and we know that a healthy environment make a strong country.
any way there are some blogs that discuss the major topics and the terms that are really helpful fer the medical students.
the concept of the Maggie what ever she list here i am agree with her views.
It makes much more sense to have the doctors come to the United States then to have sick people travel half way around the world to get the care they need. We can organize this in a way that ensures that everyone benefits (except maybe U.S. trained doctors). The sooner we get on this track the larger the benefits will be.
US is really giving those people who want to work for them a hard time. We just want to give a helping hand. More foreign doctors & health care workers wants to go to the US because that is where we think we can find the job we really want at the same time pays us right.