Will Health Care Reform Lead to Salaried Doctors?

As readers probably know, the health care reform bill passed the House tonight, by a thin margin and with the Democrats offering a large concession by limiting reimbursements on abortions.

Thomas Frank has a good piece in the New York Times tonight, in which he argues that health care reform might lead more doctors to be salaried rather than in an entrepreneurial format in a system that is piecework and therefore rewards more procedures, and therefore encourages doctors to run tests and procedures, adding to healthcare costs.

If you don’t think this happens, I have a bridge I’d like to sell you. I had had a very good doctor before I went overseas for two years, but when I came back, he was no longer practicing (he had taken an job with a small drug company). I had surprising trouble finding a doctor I liked remotely as much as him (and I found doctors I liked in Syndey pretty readily, so I don’t believe I am unduly fussy). I also have a a good insurance policy, it allows me to see anyone with a 20% copay. I can go directly to a specialist, no gatekeeper nonsense. But a 20% copay is also enough to make me sensitive to overtesting.

One doctor I was referred to had his own townhouse. Bad sign. Decorated like that of a plastic surgeon. Second bad sign. He interviewed patients (by then in a gown) in a surprisingly cavernous office for a townhouse behind a large desk that I swear reminded me of Nazi Gemany (and I am a WASP and therefore not inclined to that line of thought). It read to me as an effort to intimidate, and he confirmed that by looking at my file and sneering, “XXX [my address] That’s a rental, isn’t it?”

Even though I am basically healthy, he proceeded to order $2000 worth of bloodwork and have me take an highly sensitive echocardiogram in his office (a $1300 test). Now mind you, my last doctor, a board certified cardiologist, said, “You would be immortal based on your heart.” There was not reason to run a costly test on my heart, but I didn’t know it was costly until I got the bill. I did have an idea what the damage on the bloodwork would be, though, and refused to have that done.

I also had an incident earlier where an orthopedic surgeon was particularly eager to operate on my knee despite a pretty ambivalent radiologist’s report on an MRI. Even though the report said, “possible false positive” his reaction was, “Oh, I’ll just go in, have a look, clean whatever I find up, you’ll be in on a Friday and walking by Monday. ” A second opinion (by a team of radiologists on the same MRI) found my knee was “perfectly normal.”

I hate to give personal anecdotes, but if as a pretty healthy person who does not see doctors often, I have had two clear experiences of doctors pushing to overtreat (and a few borderline cases too), how often does this happen to the average Joe, who might not be in as good general health and less of a constitutional skeptic than me?

Most patients are not able or wiling to buck their doctors if they order unnecessary tests or procedures. Frank describes the general case:

Most doctors undoubtedly recommend only those tests and procedures that they sincerely believe to be in their patients’ best interests. Yet those interests are seldom completely clear. And when doctors know that their incomes will be higher if they recommend additional procedures, many may tilt in that direction.

Physicians, like everyone else, are also subject to herd behavior. If some doctors in a given city begin prescribing additional procedures, others may feel pressure to follow suit — not just because patients expect it, but also to keep pace with colleagues’ incomes.

Yves here. There are most decidedly national as well as regional differences in practice. I noticed when I was in Australia, doctors were up on the current research, but were not inclined to swallow it hook, line and sinker. They were, far more than US doctors, very cognizant of the limits of recent studies (for instance, if it was a small sample size, or was a particular population, and thus not necessarily generalizable). And they were much less eager to operate and prescribe drugs.

Frank does point out that some approaches to cutting the test-happiness of US medicine have yielded positive outcomes:

In an article in The New Yorker, for example, Atul Gawande described an entrepreneurial medical subculture in McAllen, Tex., in which doctors prescribe roughly half again as many tests and procedures as those in otherwise similar Texas communities. McAllen, he argued, is where American health care is heading.

Current reform bills do little to curtail such spending, and all include subsidies to help meet insurance mandates, which would shift substantial existing health spending onto the federal budget. So enacting one of these bills would intensify pressure to cut costs.

The good news is that Dr. Gawande also identifies at least some health plans, like that of the Mayo Clinic in Minnesota, that have sidestepped the incentive problem by putting doctors on salary and operating their own hospitals. Such plans, which provide superb care and high patient satisfaction at significantly lower cost than conventional fee-for-service plans, would become more attractive under the proposed legislation.

But Frank asks the obvious question, and provides his own answer:

But that raises a puzzling question: If the Mayo model is better and cheaper, why hasn’t it swept the market like wildfire?

Part of the answer lies in the so-called adverse selection problem, a market failure that explains why so many Americans remain uninsured. When the decision to buy insurance is left to individuals, the young and healthy often opt out, thinking — generally correctly — that their premiums are likely to far exceed any reimbursement they will get.

But that means that the remaining members of the insured pool, on average, are significantly less healthy, so premiums must rise further. This puts pressure on the healthiest remaining members to drop out, causing still further increases in premiums, and so on…

But adverse selection can’t explain why the Mayo model hasn’t gained ground faster in the employer-provided health insurance market. That market doesn’t suffer from adverse selection, because insurance is tax deductible only if insurers accept all employees on equal terms.

Dr. Gawande reports that Mayo has recently opened a clinic that serves employers in the high-cost Florida market. But given how bitterly businesses complain about rising health care costs, we might have expected much more movement.

One explanation may be residual prejudice against the for-profit H.M.O. wave of the 1990s, which entailed a conflict of interest of a different sort. Patients paid a fixed annual fee, which meant that H.M.O.’s made more money each time they avoided prescribing a procedure. Because clinics like Mayo’s are nonprofits, they may avoid this conflict.

Another factor militating against quick expansion of the Mayo model is that many current doctors chose their profession hoping to earn lucrative pay, which they might not be able to do in a nonprofit clinic. But across the economy, we see talented professionals whose career choices are driven by concerns far broader than pay. Many top graduates from elite law schools, for example, turn down lucrative positions in corporate law to work for public-interest groups paying a third as much.

I suspect Frank is right on the pay issue, but for the wrong reasons. I am always staggered when I hear of law school and business school graduates being in debt to the tune of $100,000, even $200,000. I have no idea what the level for MDs is, but I imagine it is even worse.

And you cannot discharge student debt in a bankruptcy. You have no choice but to pay it (or I suppose flee the US or go underground, there are always extreme options). So the fee for service model may remain intact despite the fact that it produces poor outcomes for society as a whole because the current generation of doctors needs high incomes to so they can service their debts.

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  1. Dan

    I’m still trying to find the portion of this article that outlines one of the main reasons why doctors “overtest”. In a word, liability. In this litigious society, it’s when will a doctor be sued, as opposed to if.

    1. Yves Smith Post author


      While that may be true in some practices that are particularly prone to litigation, in my examples, that wasn’t the case. In fact, doing a procedure (as opposed to overtesting) increases liability.

      And we have weird notions of what is normal. For instance, the US is the only advanced economy where everyone is told to have a colonoscopy at age 50. Everywhere else, colonoscopies are given only to people in certain risk groups. A large scale study recently concluded the US was overtreating breast cancer (as in spending a lot of time and effort treating lumps that were benign and not growing. In other words, if they were cancers, they were growing so slowly that the patient would die with them, not from them). Even worse problems with overtreatement of prostate cancer (where the procedures can have bad side effects).

      1. slumlord

        I disagree Yves, Doctors can get sued for botched procedures and failure to diagnose. The failure to diagnose litigation threat is what drives the inordinate amount of testing. It also pushes up the cost along the entire therapeutic chain, in terms of quality control, product information, doubling up procedures etc. The dead hand of the law is felt in all aspects of medicine.

        The danger in health care reform is that when the government is paying the bills, the government strongly influences the economics of medicine. Combine that with a huge debt of graduates fresh out of medical school, then you’ve got a profession that is highly influenced by Government. And as government is very strongly influenced by lobby groups, you’ll find the lobby groups exerting control of the medical profession through financial manipulation of their practice.

        Don’t believe me.

        It’s happening here in Australia. The government here attaches all sorts of conditions to getting paid. Older doctors here are starting to retire earlier, as the conditions are not worth the effort, and even I’m thinking of pulling out.(mid 40’s) In the UK the number of applications for medical schools are falling. Here in Australia we had an efficient totally free market system of medicine(British model not American) here in the early 70’s. Once the government got involved we’re progressively moving to the NHS model, that is a disaster.

        1. ggm

          In the New Yorker piece, the doctors in McAllen admitted that fear of litigation had little, if anything, to do with increased testing. In fact, Texas passed fairly restrictive tort reform legislation a few years ago.

          1. Dan Duncan

            Opponents of tort reform love citing this New Yorker article. They use this article, which is a single comparison between 2 small cities in Texas to make sweeping generalizations about defensive medicine all over the entire United States.

            The fact that some doctors abuse the system (by exploiting excessive tests for profit) does not mean that some other doctors are not abused by the system (a ridiculous tort system).

            It should be noted:

            Atul Gawande, the author of the New Yorker piece, wrote in another article about the fact that his medical insurance costs him over $500,000 a year. Do you really think that 500k PER YEAR for malpractice insurance is reasonable?

            In the Miss. Delta, premiums for OBGYNs went up 400-500% in one year…these doctors are exiting this litigious district in droves…and the main reason cited is they can’t afford the malpractice insurance. Is this some big lie?

            Here are some other quotes…directly from the very Gawande that you cite:

            “The average doctor in a high-risk practice like surgery or obstetrics is sued about once every six years. Seventy per cent of the time, the suit is either dropped by the plaintiff or won (by the doctor) in court. But the cost of defense is high, and when doctors lose, the average jury verdict is half a million dollars. General surgeons pay anywhere from thirty thousand to two hundred thousand dollars a year in malpractice-insurance premiums, depending on the litigation climate of the state they work in; neurosurgeons and obstetricians pay upward of fifty per cent more.”

            But this doesn’t contribute to healthcare costs?

            Here’s another quote from Gawande:

            “This is our situation in medicine, and litigation has proved to be a singularly unsatisfactory solution. It is expensive, drawn-out, and painfully adversarial. It also helps very few people.”

            “There is an alternative approach, which was developed for people who have been injured by vaccines.”

            But there is no alternative approach in this 1990 page monstrosity. Instead, we have a false dilemma that just because “some doctors abuse the system, the need for tort reform is a lie”.

  2. redplanet

    Why did you agree to the echocardiogram? I personally don’t go to doctors for anything as I prefer to take care of it myself, so I have a hard time understanding why someone agrees to something they don’t want.

    I fear very much the future. I will either be in jail (Pelosi said up to 5 years) or dead or labeled noncompliant. I am disgusted with this. The one thing we should have had in there – abortion – is watered down to nothing. It’s a sad day that stupid wins so strongly. We need more abortion funding and we get less.

    I’m 60. I hope I can afford to pay this nonsense to keep out of jail. But I spend about 500 per month on my health care per month and I am not willing to give it up. I am the best health care provider I have ever had.

    1. Yves Smith Post author

      This was during the visit, I was taken straight downstairs for the echo. I’m used to getting an EKG when I get a regular checkup, so the idea of having my ticker tested did not seem out of line. Still I must confess I am not up on heart tests and had not idea that this one was that much different and so pricey until it was too late.

      1. John


        Something that you didn’t remark upon, but seems clear from your writing is that you are a rather well-informed, conscious consumer of health care. I am guessing that you, like most Americans, have no medical training or background, either. This hints at another perverse effect of pushing out-of-pocket costs onto individual patients. Patients with a fear of large bills are forced into a situation where they have to wield a veto against the better judgment of an MD.

        How is an individual patient supposed to know what to reject and what to accept? The patient shouldn’t be put into this position. It can only lead to mistakes and bad outcomes.

        1. Yves Smith Post author


          There is a very good book on this whole topic, Money Driven Medicine by Maggie Mahar, I must confess I have not had a chance to read it, but I have read long extracts and very positive reviews. It describes medicine in the US as a market failure because consumers inherently cannot make informed decisions about medical care.

    2. Lavrenti Beria

      “The one thing we should have had in there – abortion – is watered down to nothing. It’s a sad day that stupid wins so strongly. We need more abortion funding and we get less.”

      Yeah, isn’t it outrageous. Now the only government sponsored infanticide we’ll get to drool over will be that in Afghanistan and Iraq and in stem cell “research” laboratories. What’s wrong with Pelosi anyway? Didn’t she like Josef Mengele?

      1. Yves Smith Post author

        Have you adopted four or five babies from teen mothers who didn’t want them? Oh, and they have to be black or Hispanic for it to count, white babies are in demand. If not, I suggest you start walking your talk.

        I personally know a Hispanic woman whose daughter (15) was scared by the nuns at her school into carrying her baby (the argument was if she had an abortion, she’d never be able to get pregnant again). Given the mother’s indifference to the child, it is like to turn out not very well, and the mother has had to interrupt her education (as in drop out) so she is likely destined for a life of borderline poverty at best.

        1. Lavrenti Beria

          Oh, really, spare me the lecture and the phony outrage. You know with certainty that I wouldn’t be willing to adopt children in such circumstances? Until you do, climb down from your high horse please. One thing’s for sure, your highness, if I could do something about a child whose life was threatened in this way I’d do what I could, I wouldn’t simply allow his or her knee-jerk murder based on the self-centered reasoning of some elitist professional woman, believe me. I’ll have an apology, thank you.

          1. Yves Smith Post author

            You have just proven my point. There are thousand of women like the one I mentioned. You conveniently pretend not to know of any, and have tacitly admitted you have not adopted. If you were willing to live up to your principles, you would have acted on them.

            It’s easy to moralize to others when you are not the one who bears the cost of very difficult personal choices.

          2. Lavrenti Beria

            I know, you wanted to go into comedy but your mother objected, preferring instead that you stress the supercilious.

            No one’s conned by the strawman you erect as a dodge here, Yves. Neither is anyone diverted from the central question at issue: The murder of human beings. To claim that no one ought assert a moral objection to abortion because they might not have walked in the shoes of the woman considering one has all the logical merit of dog flop. Would you grant the same license to a serial killer? One might not have lived all of the experiences of, say, a Jeffrey Dahmer, but are we to continue permitting him to dismember young men? That’s where your argument goes, you know. And that to say nothing of your outrageous presumption in assuming that I haven’t adopted in any case. You know nothing about me.

            But we know this about you, don’t we: That you hold to a perverted sort of utilitarianism when it comes to the question of the value of human life. The words are your’s, madam:

            “I personally know a Hispanic woman whose daughter (15) was scared by the nuns at her school into carrying her baby (the argument was if she had an abortion, she’d never be able to get pregnant again). Given the mother’s indifference to the child, it is like to turn out not very well, and the mother has had to interrupt her education (as in drop out) so she is likely destined for a life of borderline poverty at best.”

            And the obvious conclusion: Better that the young girl had murdered her child so that she could get an education and avoid poverty! Amazing. This is exactly what I had in mind when I’d referred above to the self-serving outlook of elitist professional women.

            I’m still waiting for an apology.

          3. Yves Smith Post author

            You seek to impose your personal standards on others when do do not bear the costs. And calling my arguments “supercilious” is an admission you have no substantive response. You have no concern for the quality of life of some of the children born into horrid situations. No, you focus on the straw man of “utilitarianism.” Bringing a child into the world can be and too often is an act of cruelty.

            You seem eager to dish out morality, but when I suggest that you have likely done nothing to bear the costs of the personal standards you so zealously seek to impose on others, I get no meaningful response. You merely assert you “might have” that I “don’t know”. That is a tacit admission, and you and I both know that. If you had done something to aid pregnant young girls, I am sure you would have responded with some particulars.

            People who live in glass houses should be careful of throwing stones.

            It is you who owe an apology to every reader here who has had an abortion.

          4. Lavrenti Beria

            Yes, I suppose it must feel as though someone’s imposing themselves on you when they touch upon the superficiality of your logic, Yves. Additionally, for the record, it wasn’t your “arguments” that I’d called supercilious, it was you; I’d dealt with your “arguments” quite apart. And as to this remark, “Bringing a child into the world can be and too often is an act of cruelty”, all I can say is that I genuinely feel sorry for you, Yves. I’m just glad that you weren’t my mother. My mother was born into a family of five kids whose father died in a construction accident when she was roughly two years old – circa 1910 – and who had the tremendous example of a mother, herself, who raised all five of those kids in abject poverty, never once considering any one of them anything but the most decided blessing. In truth, we’ve reached through to a kind of toxic abasement when our women have so devolved as to consider what is most profoundly womanly about them, motherhood, ever to be a precondition of cruelty. That just has to be the most perverse of inversions I’d say.

            I’m still waiting.

          5. Yves Smith Post author

            You must lead a remarkably blinkered existence not to know any people who have led very troubled lives as a result of bad or non-existent parenting. The fact that you were fortunate enough to have a good mother is irrelevant to the general issue here.

            I have no intention of apologizing, I see no basis for an apology, not have you presented one, save I ran afoul of the personal standards you seek to impose on others. You have repeatedly ducked my questions about your record of providing assistance to those who bear the costs of complying with your personal standards. Since it was you who brought up the question of morality and personal conduct, this is a legitimate line of inquiry.

            And I do see every reason for you to apologize to women who have had abortions that you brand as murderers.

            You also have said your “supercilious” remark was intended as an ad hominem attack. Then you issue a second personal attack, irrelevant to the thread of the argument, about my fitness to be mother. You’d never try the parenting argument with a man, it again shows considerable unexamined prejudice. And since I am not a parent, I find this all very amusing, your attempting to shame me as a way to silence me. Both those remarks are violations of my oft-stated comments policy.

            If you do not apologize to me and to readers who have had abortions, I am blocking your IP.

          6. Lavrenti Beria

            Oh, my! How better to demonstrate the utter emptiness of one’s convictions on any question than to resort to the totalitarian impulse as you have here. I really must have tapped a deep vein of personal guilt when it comes to Yves Smith. Is it that you’ve had an abortion, Yves? Does that explain the fascism on exhibit here?

            Let me explain something to you, Princess. Every time I smell the stench of abortion I’m going to call it just what it is: Murder. And no fascist thug like you is going to muscle me into silence. You do what you care to do with my IP address, I’m absolutely powerless in that respect. But let this whole episode be a warning to anyone else wishing freely to express a point of view here and a commentary on your most decided hollowness as a human being. I feel sorry for you.

          7. Yves Smith Post author

            This is projection pure and simple.

            You seek to impose your standards of conduct on others, and in areas of life most people deem to be deeply personal. If that isn’t “totalitarian” I don’t know what is. The fact that you cannot see your own hypocrisy on multiple fronts is breathtaking.

            And it is none of your business, but no I have never had a abortion. But the fact again that you choose to try what you consider to be a serious attack (which is isn’t, but in your warped world view it is) shows how distorted your thinking processes are. You are utterly devoid of compassion for women who have to make tough choices.

            Take your bigotry and hatred elsewhere.

  3. pwm76

    I have had similar experiences. Luckily I studied persuasion in the medical decision context while in college, and knew how to counteract doctors’ intimidation by requesting statistics to inform my decisions about whether I needed surgery. None were forthcoming of course, so I availed myself of access to medical databases. My doctors’ advice more than once was specifically counter-indicated in the literature.

    Even doctors not in private practice often have the wrong incentives. Even in some of the most prestigious hospitals around, they have surgery QUOTAS. I am hooked in to a couple of doctors’ networks through personal contacts, and can tell you that the average patient is a bit too trusting of doctors’ incentives and general integrity. And surgeons who kill by incompetence (literally), merely get pushed to other hospitals, much like pedophile priests merely get moved to another parish. No exaggeration here – I know of specific cases where this has happened.

    There are good doctors who also have high integrity, but they are in the distinct minority.

  4. fresno dan

    I would agree that salaried doctors would probably lower the cost of health care. I would posit that salaried lawyers would also be cheaper. And I imagine those two events would happen at the same time – never.

    As your anecdote so aptly demonstrates, when a guy in a white coat wants you to get a test, how many people are going to say no? I am pretty sophisticated at health care, and I think I get overtested – but I don’t want to argue with my physicians. Its also my very life – and I am willing to endure over treatment even for the most marginal potential benefits – that is probably how most people are when it comes to going on living. If you were advising someone, and the constantly second guessed you, wouldn’t you eventually say, why don’t you get another professional?

    But like most things in life, it goes two ways. There were definitely treatments and things I wanted done that were not. It took me 6 months to get my claim that I ad Hogkins’ disease taken seriously. My begging for a statin got me nowhere until I had a heart attack.

    And the fact remains that all those uninsured people have myriad health problems – high cholesterol, undiagnosed diabetes, ad infinitum. Treating everybody to guidance is going to be very, very expensive.

    There will be few news reports about the benefits of medical procedures foregone – but you can bet your ass that everytime a test did not happen, THAT COULD HAVE BEEN DONE, and there is an adverse outcome, it will be prominently played in the media.

  5. Vinny G.

    Great post – thank you very much, Yves. 

    Doctors overtest because it’ profitable, not because they’re afrsid of litigation. Often they’re owners of the labs they send you to. The whole litigation thing is pure bull. 

    Personally I hope doctors will end up on salary. They’ll likely work less hours and kill fewer peope due to fatigue too. The VA is not a bad model either, if it were better funded, that is.  

    As far as lying goes, American doctors are taught how to lie in school. Not only are they poorly trained when compared to foreign doctors, but are shameless liars too. US medical schools are more like acting schools. 

    Regarding studies, again, American medical training is so short and so deficient, unless they also have a PhD, most American-trained doctors are  functionally illeterate when it comes to reading and understanding even basic statistics or research methods. And of course, they compensate with unreasonable amounts of self-confidence and arrogance (also taught in med school).

    As far as student loans, they can always sifn up to work for an underserved area like an Indian reservation and will have their lians paid off. But then again, some can’t wait to open up that Park Ave practice to match their egos, so I guess we can’t help those, now can we…LOL

    Sorry, I’m a doctor too, but I have zero respect for Americam-trained doctors. I say to hell with them and the insurance companies. Time to go on a money diet…LOL


  6. pkut

    do you realize that when a FP or internist orers those test, they have NO financial interest. they get nothing for it. the lab, pathologist or radiologist make the money. only a rare few ortho’s, and cardiologists own imaging ceters and thus, the overwhelming majority of physicians who order test have zero financial gain from it. If you want to know what will happen to the cost of medicine without price controls by having salaried physicians, look at the experience with hospitalist’s. They were for a salary and have no financial gain from anything they do or order. Plus thy are “specialists” at inpatient hospital care. Cost’s have risen as a result their use as they just remotely, lazily order test’s and imaging to avoid having to do a real work up. Putting physician on a government salary is the worst idea, yet.

    btw, if you believe the threat of malpractice has only a small roll in the amount of tests/imaging oreder and the use of specialists you have not the slightest idea of what is happening in medicine right now. Other than opposition to this idiotic plan, it would be physicians’s number one issue

    1. DownSouth

      My 93 year-old mother has a plan with Scott & White Hospital in Temple, Texas. She pays a fixed monthly amount and the hospital takes care of all her healthcare needs.

      Her doctors are all on salary, and they do an absolutely superb job. Important evaluations are not done by an individual doctor, but by a team of specialists. I cannot overemphasize how happy I and my siblings are with the healthcare my mother receives, which I would characterize as nothing short of stellar.

      On the other hand, I cannot imagine the nightmare of trying to navigate the minefield of independent, pay-for-fee physicians.

      So my experience with what you call “hospitalists” is just the opposite of what you describe.

      1. DownSouth

        I might also add that many very wealthy Texans choose to go to Scott & White for their healthcare needs, and in gratitude for the treatment they or their loved ones have received, many in the final days of their lives, have been exceedingly generous with the non-profit hospital.

        I think the generosity of former patients speaks to the quality of care they received.

    2. Vinny G.

      My friend, I work in the field. I’d think I know what’s going on, don’t you agree? The medical industry (because that’s what it is– an indusyry) is as corrupt as the Mafia. One must blind, deaf, and in a coma not to have realized that from watching the healthcare reform circus of the past few months.


    3. Yves Smith Post author

      Depends on the test. Most doctors give EKGs and per my example, echos in their office; I’ve had lung capacity tests administered in the office. Many orthopedists have X-ray machines in their office (although I haven’t found them to boe overzealous on that front). Bloodwork is sent out. My old MD would simply call me to tell me what the tests said (as in no charge); I’ve had some doctors schedule follow-up visits to discuss the results (as in more income, and they scheduled the visit prior to knowing the results, as in the tests could be a complete non-event and I’d still have to pay). That’s even more common with imaging. And they do get paid for the blood draw, albeit not much.

  7. i on the ball patriot

    The moral theory discussion …

    Just as the state has an interest in controlling the relative size of large financial corporations and business entities that get in that ‘to big to fail’ zone — a zone that will jeopardize all of us if they do fail because of the power their gigantic size wields over resource consumption — the state also has a right, and an obligation, to control the relative size of individuals incomes because of the power – in the aggregate – that their gigantic size wields over resource consumption.

    Said another way; we can no longer afford all of these overpriced lawyers, doctors, generals, admirals, corporate CEOs, billionaire entrepreneurs, etc. that in the aggregate represent a parasitic drag on all of the rest of us.

    It is time to discuss how much is enough and set some limits on income spread and asset ownership. Should one person, like Warren Buffet, make thousands times more than a person on minimum wage, or billions times more than a homeless person who makes and owns nothing? Should one person, Warren Buffet, be able to own and control assets that affect the lives of so many of us?

    What is a fair income spread? Five times the minimum wage? Twenty times the minimum wage? Should Warren Buffet be allowed to own and control it all?

    Before you answer; consider that you were born into a world shaped by aggregate generational corruption where the wealthy ruling elite have for generations been buying politicians and governments and tilting the playing field in their favor. That is the crooked playing field that Warren Buffet has gained his wealth playing on and contributed to with his political contributions (read graft and corruption). Set aside for a moment the Horatio Alger bullshit their bought and paid for scribes have filled your head with and ask yourself; what is really fair?

    How much should one person be allowed to make?
    How much should one person be allowed to own?

    And now the reality discussion …

    The reality is that in scamerica you have a non responsive to the will of the people government and therefore none of your hopes, dreams, good ideas, and wishes, will ever be realized until you change it. Election boycotts are in order.

    Deception is the strongest political force on the planet.

    1. Vinny G.

      i on the ball patriot said: “we can no longer afford all of these overpriced lawyers, doctors, generals, admirals, corporate CEOs, billionaire entrepreneurs, etc. that in the aggregate represent a parasitic drag on all of the rest of us.”

      What you are describing is a development of the past two decades, and despite the worsening situation of the majority of the people in this country, there seems to be a never-ending stream of those individuals. It is inconceivable that there can be so many more billionaires than a few decades ago, when in fact the total wealth of the nation has not changed much. These people are swindling or stealing whatever meat is left on the carcass, before flying off to warmer shores.

      It is very similar to the Roman Empire in the 3rd Century.

      Warren Buffett is probably the worst offender. My consolation is that I am convinced his recent investment in that railroad company whose name I can’t even recall) will prove to be a total disaster. Yeah, can you picture in your mind all those homeless people who lost their homes and retirement crowding their nearest Walmart stocked by Buffett’s trains. Ha! What an idiot! The guy needs to have a dementia evaluation…LOL


      1. Skippy

        Vinny when a bloke like Buffet goes after hard assets like railroads, fixed infrastructure, high over head, high equipment costs, high energy consumption (vulnerable to fuel costs/market pricing) the end is nigh.

        Hes got gold and now wishes to even hedge that with heavy transportation…mister fast and fluid goes solid…ouch.

        Skippy…Don’t hang around too long the boat might sail with out you and your family.

        1. i on the ball patriot

          Vinny and Skippy — you guys rock!
          But consider … the trains are going to be used to take us all to the camps … Buffet will make zillions :-)

          i on the ball patriot … sheesh, I hope that’s a joke!

  8. Yearning to Learn

    Some of you are making a huge mistake in reasoning. You are lumping many many different types of practices together as though they are one.

    Each practice will be set up differently, with very different incentives.

    The problems highlighted in the article most often happen in private specialty practices (like ortho, dermatology, plastic surgery, ophthalmology etc), and less commonly in private primary care practices. In that setup, the ordering MD often does have finanical interest in the test. (meaning they may get paid more if they order it). And there is considerable data that indicates that those types of practices order more tests.

    If you are worried about over-testing then avoid that type of practice.

    The majority of primary care doctors do not work in private practices like that. Most work for a big firm and that firm contracts with the various insurers. The MD will be paid based on their “RVUs” generated. You may get slightly more RVU’s if you order a test vs not ordering a test, but it is slight. But when you order it then you as the ordering MD have to take care of it (which takes time). so it’s not like it’s a freebee. So sure I might get a cholesterol, I make miniscule amounts more. But then if it comes back slightly elevated then I have to discuss that with the patient, discuss what it means, discuss what to do, etc etc etc.
    so I make a little more, but I have to do a little more work.

    I make far far far more money NOT testing in general than testing. If I don’t test then I can see more patients, and I’m paid more per patient.

    A totally made up example:
    I see 10 patients, get $100 per patient AND an extra $10 per patient due to the labs that I order. I get $1100.

    I don’t do tests, so I have more time to squeeze in more patients.
    I see 12 patients at $100. I get $1200.

    some would say: well yes, you might not see direct benefits from ordering your test, but your GROUP does see more benefit, and then you by extension.

    however, there are typically many medical groups in one location, and if your costs are too high relative to others then you are blacklisted by the insurers. (ever wonder why your insurance carrier might have “level 1” “level 2” and “level 3” providers as example?).
    So in other words, if your system is too expensive then the insurers blacklist you. Thus there is some (but not enough) pressure to keep testing/costs down.

    In my experience, we have far too much overtesting for a multitude of reasons
    -partially because of the incentive structure, but I think that’s not the primary reason
    -fear of litigation. This is huge actually. few/nobody will sue you for over testing. How many horror stories have you heard from people who say “my doctor didn’t test me for this and I told them to and now I’m super sick!”. (you see it above with Fresno Dan’s Hodgkins example)
    -patient pressure. American patients are trained to ask for more tests than they need. American patients are also trained to ask for more specialty care than they need.
    I’ve used this analogy elsewhere before, but the #1 diagnosis done by our Orthopedic Surgeons is SPRAINED ANKLE. Because people are “sure” they broke it and the “know” they need a specialist.

    I try to talk people out of ankle and wrist xrays every day. Good luck with that one. Sprained ankles/wrists hurt A LOT so everybody is convinced that it must be broken (this is reasonable).

    much of what we see in American health care is because we have turned health care into a CAPITALISTIC system. Health care and capitalism don’t really work very well together, despite many people’s claims otherwise. because health and profit are often diverging claims.

    lastly: Putting docs on salary has its own set of problems. One of the big ones was the problem of keeping the docs working as hard as one another.
    I remember when we were salaried, there were some of us who would see 20-30 patients a day, squeeze patients in when they were sick, make accomodations for patients etc… and others who would literally see 10 a day, refuse any add-ons, etc.

    you might just say “well if someone is working slower, tell them to work faster or fire them”. the problem with this is that it is VERY disruptive for a practice to lose a doc while you are interviewing another.

    salaries can work, but there is some difficulty.

    1. psychohistorian

      Thank you for the great perspective on the issues.

      You prove my belief that if mankind could exhibit the will there are reasonable solutions to try for many of our social problems.

  9. john


    I look forward daily to your thoughtful comments. I agree that there is a lot of unnecessary testing that is being done in medicine. And I agree that many physicians do respond to financial incentives. And this works both ways. Many salaried physicians (ie Kaiser physicians) in my experience are much less responsive to individual patient needs because keeping patients in their practice through superior service is not of paramount concern. And the physicians that are currently salaried have chosen to work in that setting and they may represent a much more altruistic set of physicians then the average. If the salaried physician model becomes universal I think you will find a large number of very unresponsive physicians who just “clock in”. This may be a worthwhile trade off in order to prevent unneeded testing, but just be sure that you realize making all physicians salaried will bring up a new set of problems.

    Some of the comments are just ludicrous and beneath the level I have seen on past posts. I will address just a few. The VA system is a disaster- I have worked in several VA hospitals and they are extremely inefficient and patient wait times are at least quadruple of that on the outside and this is not due to lack of funding. The VA gets plenty of funding- every politician who has a VA hospital in her or his district showers it with money so she or her can claim they are “one with the vet”s.

    US medical training is not short- it is the lengthiest and most intense in the world. The only training that is close in caliber is in Australia and Canada. Why do you think physicians from the rest of the world come here for subspecialty training? In my residency (at a top five program for my surgical specialty) there were fellows from Australia, Europe, Canada and South America. And they all were there to obtain advanced training to bring back to their home country. They had critical comments about some aspects of our system- such as our insurance regime, but they all agreed our training is superior to anything they had experienced in their home countries. Just check out the website of the tertiary care centers in Canada, Australia, England, or wherever and you will see on the bios that many of the physicians came to the US for advanced training.

    And I am not aware of a single hospital in the US that has surgery quotas. This would be highly illegal and I can guarantee that hospital would be shut down by the feds in about five seconds.

  10. Yearning to Learn

    As far as lying goes, American doctors are taught how to lie in school. Not only are they poorly trained when compared to foreign doctors, but are shameless liars too. US medical schools are more like acting schools.

    ROFL. you sound so bitter.
    Perhaps your argument would be better if it were not so hyperbolic?

    I’ll put out a few tidbits:
    many of you think that doctors are in it for the money. Some are, some aren’t.

    I will give you my personal story. I went to a top undergrad program. Graduating, I needed to decide between Wall Street (where making a few million/year was probable) or medical school (where I’d make far less).

    I chose med school. So chose AGAINST money. Many doctors were the top in their colleges, so most had a choice similar to mine.

    Then in med school, I could choose a high paying career (like plastic surgery or Ortho etc) or a low paying career (like primary care). I chose primary care.

    so again, I chose AGAINST money.

    so the thought that I do what I do for money is laughable, when I have consistently chosen the non-money path. many of the primary care doctors are the same. They are not some richey rich types. Many make $100k-$200k/year. Which is a very good amount of money. But they also work 60 hours/week, often had $200k of student debt, and had 7-10 years of training AFTER college to do it.

    Many police officers make $100k…

    so I’d try not to compare some average primary care doc making $125k/year to a private practice orthopedic doctor making $650k/year.

    Yves: an echocardiogram WAS inappropriate. we have to stop scum like him.

    lastly: I trained at the Mayo Clinic. (Yves can google my name from my email address and Mayo Clinic and I pop right up there to confirm this).

    The Mayo system is a very specific type of system that may not translate well to other places. One of the things that allows them to do what they do is their prestige. You can get very high quality doctors and pay them much less so that they can get the Mayo Badge of Honor… same with high quality administrators, nurses, etc etc etc. They also have major negotiating ability with all insurers because of this (insurers don’t want to get blasted with “go to insurer X and you can’t go to the Mayo Clinic!”)
    and everything is IN HOUSE so they don’t need to contract out (which can be expensive).
    This allows them to keep their cost structure down.

    in addition, they can force their patients to do things that can’t be done elsewhere due to their prestige, and their location/patient profile.

    For instance, if a Mayo Clinic doctor says “you don’t need this test” then the patient often listens, because they’re a Mayo doctor! Mayo is commonly thought of as the 1st or 2nd best hospital in the country if not world(vies with Hopkins). If small town Arkansas doctor says it then there is less chance the patient will “respect” the doctor as much.

    In addition, Mayo is in Rochester MN. The people of that area are very different in regards to testing than other people. Part of this is because Mayo has TRAINED the patients to be that way. The same way that the Texas clinic has trained their patients to not seek tests as much.

    but it’s not just the patients. Mayo has TRAINED its staff to be like that. Because it really does stand one foot out of the capitalistic model. and a high percentage of Mayo Staff trained at Mayo.

    So you have Mayo training its staff, and also its patients, to be a certain way.

    this is not easily replicatable in America because we’ve trained our staff and patients to be a totally different way

    1. Cactus

      Just thinking about Yearning to Learn’s post:

      Yes, I think that fact that many undergrads at top programs consider Med School as a career alternative to Wall Street (and Law School) is true and completely unique to the US education system. If it weren’t for your comment about about “Many police officers make $100k…” I would’ve said you were definitely on to something…

      Some time ago I remember seeing an interesting post on Yves’ blog about the disproportionate amount of male doctors in the US compared to Australia and other public schemes. The argument went that the high-income potential in the medical field attracts alpha-types (ie males) and has the opposite effect on females. This is also confirmed by the selection patterns of med school students (those who go into family practice vs high-$$$ specialty practices) Would be interesting to see a study that pieces some of these anecdotes together in trying to explain why US-based MDs are a special breed in the global medical community.

      Personally, I think this problem of $$$ driving lots of choices in specialty medicine driving high costs of health care will resolve itself over time. Some of the ‘hot’ specialties such as imaging/radiology will be automated to the extent of making MD training less relevant. Compare to airline pilots today who could push a button and have the plane computers do their work while they play with their laptops. Yes, it is always better to have the human conversation and thought process involved and etc. but let’s face it a great volume of all medical services are rendered due to completely ordinary, common problems [headaches, sprained ankles, basic infections etc]. With an ageing population and a shortage of docs, we’re going to have to re-think what services truly require an MD and what could be safely rendered without their involvement.

    2. Vinny G.

      And, you sir, must be a retired orthopedic doctor, currently making a million bucks a year as a successful lobbyist on the behalf of American surgeons, right? How much do they pay you for posting in places like this?

      Firstly, I’m not bitter. Actually, I’ve done well in the field, so I have no reason to be bitter. But I do have a sense of social justice, which I don’t sense in what you wrote. All you seem to care about is dollars and cents. You’re pathetic.

      Secondly, I am not going to stand for your lies and deceit, so…

      I too worked at VAs, and to claim that the local congressmen and congresswomen showers their local VAs with funds when this is a central federal agency is not just ludicrous, but just a plain attempt to deceive. Perhaps the VAs were well funded 15 years ago, but they are not today, and we have two wars going on, if you haven’t noticed. And many docs at the VAs do try to make a difference, unlike the greedy bastards at Kaiser, btw.

      Look, the medical system in this county is now such a complete disaster, such a miserable exercise at social injustice, we may just have to settle for a VA-like system. We just don’t have the luxury to try other “capitalist” solutions, just to maintain your million dollar a year income, sorry. The time for that would have been 40 years ago. Maybe if it were implemented then, or maybe even in the early 90s it might have worked. But no, it was geniuses like you, who obstructed change until the 11th hour and the 59th minute. Sorry, buddy, you’ll now just have to take a pay cut – a major pay cut. So, sell your practice, rent half of your building, and postpone buying that fifth Lexus for the wife. How’s that?

      So, should I understand that you think there is no quality advance training in other countries? Wow! Do you even see the arrogance and stupidity of your statements? Most foreign doctors that come to the US for their residency or specialty training do so because they want to practice here in order to get rich. MONEY is the only motivation why an Indian or Spanish doctor may want to practice in this country. Money. That’s it.

      Regarding the quality of medical training in this country, you must be either self-deceived, or just plain ignorant of the facts. Four years of theory and rotations followed by a short residency just won’t cut it, my friend. I just don’t see how an undergrad who studied philosophy or even chemistry in college will make a great doc in 4 years. Do you? So please, don’t tell me that training model in this country even comes close to that in Germany or France, to name a few.

      And, please, please stop comparing the US system to other failed Anglo-Saxon medical systems like the one in the UK. I have discussed the British NHS system here in the past, so I won’t go into it now (and both, me and my wife worked for the NHS, so we saw the failure from the inside, just like we saw the American failure from the inside).

      How about comparing the monstrosity we have in the US to the wonderful medical systems in Germany, or France, or Austria? Or, most of Western or Eastern Europe, for that matter. Now, honestly, wouldn’t you want to practice in a place like the Netherlands? Or, do you prefer to sue and put liens on your patients’ homes to pay for that fifth Lexus I mentioned above? Think about it.

      Finally, I suggest you do a little traveling, make some friends in other countries, visit their practice, maybe even learn a few words in their native language just to you don’t look so Ameri-centric. Observe German docs interact with their patients. Try to learn from their bedside manners, for once. Observe their analytic process. when you come to Greece drop me a line, and I’ll show you my wife’s dental practice. No, she does not make a million a year, but she sure is appreciated by her patients. I’ll drive you down to Patras, and show you the radiology section which is as modern as any place in America, but where patients don’t have to max out on their credit cards to get an MRI. Maybe that will open your mind, because right now you are just too brainwashed thinking America is heaven on Earth to be able to see things objectively.


    3. i on the ball patriot


      “I am writing this complaint because I think the Mayo Clinic is charging ridiculous amounts of money for their services. For example, I had an endoscopy done by them and their charges before it hit my insurance was over $3000. That is over double the national average for this exam. How can they possibly justify that?
      Not to mention the fact that I had to wait 3 hours in the waiting room AFTER my schedule appointment time before I was called in and then bam the test took a whole 10 minutes.
      They are doing this because of 2 reasons: 1. they have no competition in rochester and they think they are god’s gift to the earth, and 2. they are lining the pockets of their board members and doctors at the price of the patient.
      My recommendation: Fly to Mexico and have all of your work done there, or at least a big city where there’s more competition. The insurance companies, pharmaceutical companies, and hospitals are all in bed with the government and all getting filthy rich in the process.”


      Deception is the strongest political force on the planet.

  11. Jim in SC

    John is right about salaried physicians just ‘clocking in’. I used to follow the publicly traded physician practice management companies back in the ’90s, when hospitals were buying physician practices. What did the hospitals learn? That when doctors sold their practices and went on salary, they stopped working very hard.

    Working at the Mayo Clinic has to be among the most prestigious plums in the world of medicine. The people who do it are probably both more altruistic on average and more driven by non-monetary incentives, such as the desire to be part of an extraordinary team.

    I think it is a mistake to paint the whole VA system as awful. My uncle receives his care at the VA hospital in Columbia, SC, and he’s been very pleased with them. Quality may vary by hospital.

  12. brian

    Kaiser has been picking up experienced doctors in California for years because they are tired of spending one third of their time arguing with insurance companies for payments and dealing with the paperwork
    Instead they are free to do what they want to do and are trained to do full time practice medicine

  13. squanto

    I live in a city (population ~200,000) where virtually all doctors are employed by HMOs and therefore are presumably on salary but in my (admittedly limited) experience, they seem to still recommend tests that are unnecessary or overkill. If a medical facility owns expensive diagnostic equipment, the doctors that work there will be under pressure to utilize it to full capacity. Entrepreneurial doctors may be even worse. Thankfully I wouldn’t know.

  14. Roger Bigod

    I’ve been hearing about the prevalence of defensive test ordering for years, and it sounds whiny. I suspect it’s minuscule compared with the unnecessary imaging studies, echoes, caths, aka remunerectomies. But I may be wrong. In any event, it would be helpful to have a study, which wouldn’t be difficult to run. Take a standard test, like skull film for head trauma, ask the physician the odds that it will find a fracture, and check against the results. Maybe docs are excellent at judging the clinical indication, maybe not.

    The tort system is close to worthless. Only a tiny fraction of errors wind up in a suit. I don’t think having more would be a good thing, because they’re often harmless or due to faulty general procedures rather than real negligence. But to get them into court, claims have to be made that there was “malpractice”, and a huge theatrical performance put on for the jury. Most of the cases settle, so the outcome depends on the poker playing skills of the attorneys doing the negotiating. Calabresi’s Cost of Accidents is an ancient but still excellent examination of the issues. One function of the tort system is supposed to provide feedback about the cost of negligence and give an incentive for avoiding it. But there’s so much noise in the system that it’s dubious whether it’s a net good.

    I can think of one notable exception: the injured plaintiff who’s going to need lifelong care for something like quadriplegia. If they don’t get a malpractice award, they will get substandard care and die prematurely and unpleasantly. Juries are perfectly aware of this and sometimes return a big verdict, regardless of the merits of malpractice. In a couple of cases I know about in some detail, there was negligence, but I don’t think it was the whole story. A public fund to take care of costly mishaps would be be better, but I don’t see that we as a country are up to managing a system like that effectively.

  15. Gigi

    Here are a few simple questions for all of you.

    – Would you rather trust your doctor neighbor or a large corp with your health? (Hospital)
    – Would you prefer your doctor to work for you or for your insurance company? (i.e. HMO)
    – Does your lawyer/accountant have an incentive to overbill you or recommend unnecessary work? How do you deal with it?

    1. Yves Smith Post author

      Those are false dichotomies.

      My doctor is most certainly NOT my neighbor, you are implying an intimacy of relationship that is absent in most medical relationships. And you imply hospitals are big, nasty and impersonal through your juxtaposition. One reader above pointed out how one of his parents and others in a community got excellent service through a hospital.

      The “doctor work for you” is again a false dichotomy. The vast majority of a doctor’s time is with insured patients, so their practices are built around that model. I know of people who are delighted with their HMOs and found they authorized very expensive treatments (like gamma globulin, at $3000 a pop, no charge to the patient). So again you are stereotyping.

      Most people are better able to evaluate overbilling/overtreatment from an accountant or lawyer than overtreatment from a doctor. There are fewer degrees of freedom in accounting services, it isn’t hard to ascertain overbilling. Law demands a bit more client savviness, but that is not unattainable.

      1. Dave Raithel

        Well, yes they are, and reading through all these to here, it does seem that we still wrestle with the issues most clearly put (to me) in that Kenneth Arrow paper as to how medical care ain’t no commodity, so almost all thinking of it that way grinds to a halt.

        But your counter somewhat betrays a class-bias: Most people have little use for an accountant, and those who do are better prepared to counter them, since accountants employ symbols and words more easily appropriated by literate people than the objects known in a practice of medicine. And if one is facile at manipulating symbols and words, then, well, who could not be a lawyer? … (though it takes a certain stomach, as one has for blood.)

        But unlike accountants, in America, all kinds of people need a lawyer at some time or other, and those not facile with texts and terms are … more intimidated?

        It’s not that physicians are necessarily smarter – but like the best mechanics, they manipulate things, things that are not mere abstractions from terms/symbols/words. I could talk about tending grape vines till your ears popped, but until you’ve been doing it, the words just hang in space …

        So then, as per my comment much earlier on the list: From the point of view of one who needs both lawyers and doctors, and really favoring neither one over the other from a moral point of view – why not salaries for all?

        An aside: I surely feared the Beria exchange was going to breach (invoke) the Godwin Rule….

        1. Yves Smith Post author

          I’ll admit to getting a bit sharp today, I am having a lot of frustration on other fronts (the fact that third parties confirm my ire is warranted is cold comfort).

          Re accountants, it isn’t hard to describe the complexity of a matter (either in the personal or small business context) and get a ballpark estimate on how many hours it should take. So then you can just apply the given hourly rates.

          With lawyers, there are statues against exaggerating hours spent, but yes, you have the problem of did they make things more complicated than they need to be? The big area where things can get costly fast is litigation, and I suppose divorce too. And some attorneys do seem to goad clients, while others are good at talking them out of costly fights that are probably not productive. But for less complex matters, like a contract negotiation (where the principal knows what he wants and so has meaningful input) I don’t see the potential for client intimidation (that’s a bit strong, but that is the syndrome) as pronounced as in medicine.

  16. NotTimothyGeithner

    Salaried Doctors would seem to be the original intent of insurance. The community would pool resources to keep a Doctor on hand whether they were sick or not.

  17. winterwarlock

    It’s really bizarre in the hospitals. The doctors order all the tests and procedures in the day, which are charged regardless, then ignore them, leaving the night-time physician assistant, who is paid a fraction, and severely over-taxed, to rationalize the care.

    And more bizarre, the day support crews act like there’s a tv camera recording the action, so they busy themselves doing all kinds of nonesense, and good part of the night crew is playing cards on the computer.

    In one hospital, the same doctor made the same type of error 3 times in a week, with terminal outcomes. Not only is he still employed, but hospital employees are referred to him through the hospital self-insurance plan, and they go. Bizarre.

    In case you ever need a hospital, the greatest determinant of effective outcomes is homeostasis. The sooner the nurse gets you in, stabalized and comfortable, the better the outcome, and all of the bureacracy is diametrically opposed to that outcome. A good nurse is worth her weight in Gold. Sadly, they are systematically being pushed out by administrative intervention in the form of scripts and certification by political bodies.

    Not by coincidence, a good nurse knows exactly what treatment you need, and the most efficient way to get it.

    1. Vinny G.

      Thank you for mentioning these things, to balance out the deceit these AMA lobbyists have been spewing out here today.

      Indeed, a good nurse is worth her weight in gold and diamonds. Only God knows how many potentially fatal orders are caught by nurses every day. American-trained doctors have absolutely no clinical skills by the time they finish medical school, and by the time they develop them they’ve already filled up a medium-size cemetery just with malpractice killings. Without nurses, they’d fill up a large cemetery easily.


      1. winterwarlock

        If you saw the treatment scripts the MBAs built, and are now tying into the proposed savior of medicine, “the computer said so I did”, you would throw up. Now, the executives can control the treatment distribution across the system with a few key strokes.

        Next, they want to set up a relationship with DNA, and are moving accordingly.

        1. winterwarlock

          here’s a typical, and I’m not kidding about typical.

          A playboy / actor / doctor has a guy on manual CPR, flatlined well beyond return, hitting on a new nurse all the while, and then the show really starts. He calls in all 4 ICU nurses, and empties the entire crash box on him. When he’s done, he tells the other nurses it was a gallant try, and walks out with the new nurse.

          At some point, all the crying is gone, and you have to laugh, otherwise you will have a heart attack yourself.

  18. john bougearel

    A discussion with an orthopedist from MN last week led to the disclosure that kids going through med schools these days spend roughly 250k for their advanced degrees which take about 6 yrs advance education to receive.

    The risk is that kids wanting to become health care providers seek out other careers, as what kid will be incentivized to go through all that schooling only to have their pay capped at 80-100k a year.

    Broadly speaking, if the govt wishes to introduce pay caps on doctors, they will have to pay for their tuition going forward, and offer a great benefit package (which they may or may not be able to guarantee).

    1. Vinny G.

      How about if these “kids” aiming to become doctors in order to be millionaires steer clear of medicine altogether, and instead get an MBA online, and bribe their way into a trading position with Citibank.

      I teach at medical schools, and I’ve just about had it with these type of “kids”. Better pray one of them won’t be seeing you in the emergency room should you ever end up there.


  19. Paul Lemaitre

    The gentleman “DownSouth”‘s 93 year old mother has a medicare advantage health plan that fixes the cost of her health insurance and her outlays for her care. However, it does not fix the number of charges for the tests that her “wonderful” team of specialists will generate to give her such “superb” care. It is “wonderful” for her and her family, but it is funded by the taxpayer, not through the generosity of said hospital in her home town. She can still have all the tests known to man and provide her “specialists” with the $100,000+ cars so richly(?) deserved for their altruistic pursuit of marketing to the innocent and naive.

    1. DownSouth

      Paul Lemaitre,

      I certainly don’t know enough of the specifics of Scott & White’s finances, doctor remuneration or policies concerning recommendation and approval of testing procedures to counter your accusations. (From your comment, which seems to be based more on some caricature than on factual information, I suspect you don’t either. But countering your assertions is a job for someone much more knowledgeable in those areas than I.)

      What I do know, however, Is that there seem to be two kinds of people in the world.

      Back in the 80s when I was still active in the oil and gas business in Midland, Texas, I sold an oil lease to a legendary oil man named John L. Cox. Cox was one of these Fortune four hundred types who over a lifetime undoubtedly paid many tens of millions, if not hundreds of millions, of dollars in income taxes.

      The King of the Sprayberry, as he was affectionately dubbed, and his family went to Scott & White for their major healthcare.

      Why I bring him up is that, instead of complaining about the taxes he had to pay, Cox in addition to those taxes donated many tens of millions of dollars to Scott & White so that poor people like my mother could enjoy the same quality of healthcare he and his family did.

      Are people like Cox now an extinct breed, swept away in an orgy of egotism, hedonism, arrogance, greed and selfishness?

      I hope not, because if they are, then America and the ideas it once stood for are truly a thing of the past.

  20. bob in seattle

    I see a lot of heat about properly incentivising doctors, but am dismayed at the narrow fixes promoted. The government could subsidize medical education. We could set these new MD’s loose in the market, and lower costs substantially. We could subsidize rural care (I, for one, could well imagine a buccolic existence for the traditional country doctor of lore–what’s to object to?). The cost? Pretty much peanuts in the over all scheme of things.

    Same for nurses.

    The distress about doctors becoming “lazy”, etc., is another red herring. We have the same stupid discussion about the following: Union workers, public school teachers, and government employees. It is old, tired, and rather pointless.

    Amazingly enough, we never have this discussion about inherited wealth, most of which is exactly that–inherited.

    As a new commenter, I must say seeing Yves wade in to the comments is indeed refreshing, and I recommend this site to all.

  21. dd

    I am puzzled why anyone would heed the words of a university professor “earning” his salary on the backs of indentured students and parents laboring to pay excessive tuition at a Cornell or an NYU who has the nerve to complain that the indentured students seek to maximum revenues to repay student loans supporting his privileged tenured position.

    1. Vinny G.

      Usually these “professors” make peanuts for teaching, and most do it because they truly care about education and making a difference in young people’s lives. By “peanuts” I mean something in the range of $50k – 70k a year from about 20 hours a week dedicated to teaching and preparing courses.

      I recommend a book called “Adulthood” by Erik Erikson. It’s not all about taking. Giving back to those following us is part of the life-cycle too. Without that element, one’s life becomes pretty empty.


  22. Vinny G.

    I just want to point one thing out that seems to be left out of much of this discussion:

    >>> Social justice. <<<

    Let us not lose sight of this aspect.


  23. dd

    “Many top graduates from elite law schools, for example, turn down lucrative positions in corporate law to work for public-interest groups paying a third as much.”

    Anyone following “Above the Law” knows this is bs and it’s tiresome bs. No one is turning down anything; they are deferred.

  24. pete muldoon

    The AHA estimates that there are around 800,000 physicians in the US.

    Let’s assume that each one of them has $100,000 in student loans. (Obviously, most of them have much less, and I assume a few of them have much more.)

    If we paid off the student loans of every doctor in the country, it would cost $80 billion. I would gladly have the government pay that debt in exchange for a ban on fee-for-service.

    Maybe we could take it out of that $663 billion dollar defense budget.

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