Are U.S. Doctors Paid Too Much?

Pundits at Slate and The Daily Beast have assured us America’s doctors are overpaid. Moreover, 21.5% of physicians are in households whose income places them in the top 1% of income (versus only 12.8% for lawyers, as one example). Yet half of doctors feel they are not fairly compensated and my own book shows that the rate of return on a medical education is far below that of students who pursue law degrees or MBAs. Uwe Reinhardt last week weighed in with ample evidence that both answers might be right. It all depends on our reference point of comparison…
Compared to annual pay for doctors in other major industrialized countries, average physician earnings in the U.S. are considerably higher—about 78 percent higher, on average. Unfortunately, this is not quite an apples-to-apples comparison since average earnings includes both specialists and primary care docs. Consequently, comparing average doctor pay in the U.S. (where more than 70% of doctors are specialists) to that in nations such as Canada and France (where less than half of doctors are specialists) is not very illuminating. Moreover, even two-handed health economists generally recognize that pay for primary care physicians in the U.S. lags behind that of specialists, which helps explains why we have a growing shortage of the former, but not the latter. Thus a comparison of average pay may mask the possibility that American specialists are overpaid while generalists are underpaid relative to their international peers.

Chris Conover

Forbes

May 28, 2013

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