Quick thread re: @gottliebecon’s paper presentation that sparked some debate last night (and @Jabaluck’s livetweeting thread)
conference.nber.org/conf_papers/f1…
First, the paper itself provides some great new descriptive work on physician salaries that should prove valuable for future research, but I don’t think it tells us much about the normative question of whether doctor pay is too high/too low.
On the other hand:
- Surer bet of wealth & job security
- More rewarding/higher status (i.e., ppl are willing to accept less $ for jobs they enjoy/find rewarding)
- Higher purchasing power given greater ability to locate outside of expensive metros
One interesting finding of @gottliebecon’s work is highlighting just how small school tuition is compared to lifetime earnings:
So why do we care?
Physician incomes (along with almost all of health care costs) are largely paid for & determined by the government, rather than through market forces (and privately-negotiated rates are subject to lots of market power considerations).
Given so much of doctor pay is determined by gov policy, key question is whether lower pay would adversely impact quality & access in a manner that more than offsets the consumer/gov financial savings from a welfare perspective.
Or similarly whether pay should be higher.
Saving maybe 1% of health spending isn’t nothing, but this is why price regulation discussions typically focus on hospital prices, a much greater driver of health care spending.
academic.oup.com/qje/article/13…
Such discussions also need to focus on high admin costs throughout our system.
@Cutler_econ had a great piece recently focused on reducing admin costs: brookings.edu/wp-content/upl…
Smaller items like eliminating/replacing MIPS could help too: healthaffairs.org/do/10.1377/hbl…
For doctors, I’d argue the focus should be on correcting clear market failures like surprise billing & local monopoly (or near-monopoly provider group) pricing, rather than on across-the-board concerns. Arguably we may want to increase PCP pay & Medicaid physician payments.