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Doctors on Salary



November 08, 2009 – Comments (8)

Yves has an post on the health bill that got passed last night.  I found the part about the one clinic with salaried doctors interesting.

I found the comment at the end silly:

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.

 When the current system crashes, and I don't see how it keeps going as it is.  What is happening in health care is utter unsustainable.  People have invested in enormously in grossly mismanaged health insurance plans that will likely go bankrupt as those currently insured age and require more health services.  As the report said, the young and health are opting out.  I can see people also migrating to where health services are affordable.  When I was in Costa Rica I met a woman who got her laser eye surgery done there, and she worked in the health care system in the US.  So, she was certainly more qualified to evaluate the quality of service.  She got the procedure done for 25c on the dollar compared to what it would have cost her at home.  Indeed, the vacation and the procedure together cost her less then just the procedure in the US.

The need of doctors to service debt isn't going to be the driving factor for their wages, people's inability to pay and the enormous subsidy of healthy people paying for existing procedures under insurance policies and which leave grossly inadequate reserves is going to catch up to itself and health care will be different.

8 Comments – Post Your Own

#1) On November 08, 2009 at 10:20 AM, OneLegged (< 20) wrote:

Another great blog. 

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#2) On November 08, 2009 at 11:20 AM, Option1307 (30.62) wrote:

Interesting read.

I would like to point out one important point that many people fail to mention regarding overtesting/procedures. Often doctors simply have no idea what is wrong with the patient and therefore need to order multiple tests in order to better understand what is ailling the patient. Sorry, medicine is not black and white as many assume. In the end, a lot of these tests appear "extra" and/or "uneccessary", but they were vital to finding the root problem.

Secondly, in general docotrs feel it is better to eliminate all possibilities up front than have the patient return later on with a severe condition that is potentially now life threatening etc.

Obviously there are some who simply overtest/prescribe/procedure b/c of the money incentive; however, IMO that is not the majority. It is extemely difficult, if not impossible, to order only the "correct and necessary" tests. There is going to be some sort of waste no matter what. That is just a reality that we need to face if we expect doctors to be able to discover and understand what effects us.

On a side note, I think there is a huge misconception of what medicine can/can't do. As I said, it is not  nearly as black and wite as the majority of Americas seem to think it is. I honestly think this causes problems b/c people expect certain outcomes/results that are not necessarily realistic. The over testing phenomenon is a prime example.

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#3) On November 08, 2009 at 11:34 AM, alasker (< 20) wrote:

when i was in saint maarten (caribbean) 3 years ago when my filling came out. I made an appointment for the next day with a dentist from venezuela, the visit cost me $65 cash. Beautiful office overlooking the town, very modern but basic equipment, she had to remove the old filling, clean the site, and put in a new one in. What would that have cost me in the states? My dentist charges me $150 for a bi-annual cleaning, $210 if he wants to take x-rays.

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#4) On November 08, 2009 at 12:20 PM, Option1307 (30.62) wrote:

What would that have cost me in the states?

Ok, what would the same office building cost in the states? Yes, I'm sure the dentist visit was relatively cheap in St. Maarten, but that was for a whole list of factors. So what is your point?

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#5) On November 08, 2009 at 4:54 PM, dwot (28.99) wrote:

Seems to me that limiting liability has to happen to work towards affordable health care system.  Option1307 I agree that you have a huge point that you can't just know what is wrong without tests, and even then, it isn't necessarily black and white.  While there is genuine negligence, doctors face unreasonable lawsuits far too often and this adds enormous cost to health care.  As does the huge take of the health insurance business.  I think you save about 1/3rd right there. 

But, the prices demanded for some the tests and services are way out of line with reality and will soon collapse the entire system.

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#6) On November 08, 2009 at 5:11 PM, wolfman225 (45.02) wrote:

Has anyone offered the possibility that healthcare costs have gotten so out of control mainly due to the twin influences of government-mandated coverages and insurance itself?

Look at it this way, one of the unanticipated side effects of health insurance was that while it helped people prepare for significant expenses, it also served to limit the downward pressure on the inflation of those expenses.  After all, before insurance there was at least the market force of the ability to pay that helped to somewhat limit the rise in costs.  With the advent of insurance more or less "guaranteeing" payment for proceedures/drugs a lot of that downward pressure went away.

Government mandates simply opened up further avenues of revenue for exploitation in much the same way as any corporation holding a monopoly over  a perceived necessity.  If you have no choice but to have the proceedure/drug the provider is guaranteed payment, where is the incentive to keep costs down?

Comparing costs for different proceedures internationally is largely a fools (small f) errand.  There are so many variables involved in setting prices for services (gov't subsidies, real estate prices, labor costs, etc.) that it's an apples/oranges comparison.

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#7) On November 08, 2009 at 8:32 PM, russiangambit (28.70) wrote:

College education is another bubble in the US. The cost of medical and law education simply doesn't make sense. You can get the same quality education elesewhere for 10-20% elsewhere, but of course it will not be recognized in the US and there lies the catch. Engneering and science degrees are more easily transferrable and this is the reason, I think, they are not as expensive.

Of course, the cost of education then gets transferred to the consumer.

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#8) On November 12, 2009 at 10:53 PM, vriguy (65.22) wrote:

I'm a doctor on salary. I make no money on any testing, but I order just as many tests as other doctors. I've seen and heard too many horror stories related to malpractice litigation. For me it is a one way bet - I have nothing to gain from not testing, but a 1/10000 chance of a lawsuit if I don't. The cost of testing is borne by someone else, the cost of not testing would be borne by me alone. It is only a small chance (1/10000) but a single lawsuit could cost me $300K or more just in future malpractice premiums, and may result in loss of my job, or my medical license - wiping out years and years of investment in my human capital. I know I make plenty of errors - not only because I'm a fallible human, but also because medicine is inherently an inexact science. Absent tort reform I'll continue to cover my butt to the extent that I think I need to. 

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