Sunday, August 29, 2021

Are American Doctors Overpaid?

Here we go again--another article that compares physician incomes around the world. It's not surprising that they almost always show American doctors are paid more than any other country's, seeming to confirm the belief that the US healthcare system is too expensive because of greedy doctors. However, there is a big caveat in any of these international physician income comparisons. We will get to that. This time, the income survey comes to us courtesy of Medscape. 

Medscape International Physician Compensation Survey

Medscape's study, in a survey of thousands of doctors around the world, once again shows American doctors are paid much more than anybody else, with an average income of $316,000. This is almost twice as much as second place Germany ($183,000) and United Kingdom ($138,000). Mexican physicians earned the least in this survey, averaging only $12,000.

American primary care doctors made about the same as their German counterparts, $242,000 to $200,000. But that is still twice as much as the UK, $122,000. Our specialists made far more than anywhere else, with male specialists earning $376,000. Meanwhile the German specialists made $194,000 and the UK specialists earned $155,000. It's plain that the Europeans place more of an emphasis on compensating their primary care doctors rather than their specialists like we do here.

Since American doctors make the most money, it goes to reason that our net worth is far higher than anyone else's. American physicians' net worths average $1,742,000. The UK doctors' net worths average only a third of Americans, $657,000. Germans are even lower, $441,000.

What are the debts that physicians have to carry? As expected, doctors around the world have mortgage payments to make and car loans to pay off. No surprise there. What is unfortunately not covered in the survey are the expenses that American doctors are faced with and makes our system uniquely expensive and burdensome.

American doctors carry a huge amount of student loan debt when they graduate from medical school. That expense is carried through the three to seven year residency and fellowship programs when there is not enough income to pay back the loan. Therefore doctors here are burdened with a giant fiscal deficit when they first begin their practices. Perhaps this important aspect of American medical economics is not asked of our international counterparts because their doctors are usually trained for free or with just nominal fees. 

International physicians also don't have to worry as much about medical malpractice lawsuits. American doctors face annual five to six figure malpractice insurance expenses that our global compatriots don't even have to think about. 

Yes American doctors make more money than anywhere else in the world. But we also have the highest education debts and the highest insurance expenses. You subtract these payments and our incomes aren't so disparate after all.

27 comments:

  1. How about the fact that nearly ALL salaries are higher in the US? That's an often brushed over fact in this discussion. Average salary in the US is nearly 40% higher than the UK. Try the same comparison with software engineers, business people, lawyers, etc...

    Comparing country to country is silly unless you normalize by average. The US is a land of plenty, regardless of what collective Twitter has to say about it, and the problems in healthcare point right to administration, not the healthcare workers putting their lives on the line.

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  2. Also in most nations medical students finish in 6 years rather than 8 here. Also in most nations school is almost free where here only the poorest students go for free.

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  3. Sphenopalatine GanglioneuralgiaSeptember 4, 2021 at 7:06 PM

    In addition to those factors cited here, what is the percentage of patient/insurance payment that is going to the physician in US vs international physicians? I'd be interested to see whether American doctors get as high of a cut of the overall profits, especially when employed by hospitals. I honestly don't know, but I expect because our privatized healthcare has made medications, tests, treatments, supplies, and operations so insanely overpriced, I would suspect that American physicians either get a similar percentage and the overall cost is just higher, or perhaps even a lower percentage than international counterparts. Also, is this 'average' income skewed by a higher percentage of very high-paid specialists in America compared to elsewhere? If anyone knows, please enlighten me.

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  4. I’ll be honest Aus is very similar in pay to the states (if not more for some specialities) As EM I make similar w/ less liability and no nights..surprising this was omitted.

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    1. The study did not compare Australian physicians' incomes but it sounds like a terrific place to practice medicine.

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  5. What about comparing nurse salaries and hospital CEOs? I'll bet large amounts that the ratio is much higher in the US than in other countries.

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  6. The other detail the study ignores are the hours worked in each country.

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    1. The survey has a comparison of how many patients the doctors from each country sees per week. That can be a proxy of hours worked. The Germans worked the hardest, seeing over 100 patients. The US is middle of the road with patients seen in the mid 70's.

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    2. Number of patients seen does not necessarily equal the same amount of workload nor quality. Seeing patient's is less than half of the workload required of US Physicians. What is the rate of suicide and burnout in these other lower paid countries?

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  7. It would make more sense to compare basic procedures, like radius orif, or lap appy and see how much cheaper that entire procedure costs outside of the US. Then, demonstrate that the hospital system took 95% of the revenue, with physicians sharing the last 5%. We should also consider hours worked and expectations while the University student is in decision making mode. This would be a great podcast for someone like Freakanomics. Such a huge leap from data to conclusions.

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  8. Another factor that was omitted in the article are the other expenses that European doctors (and citizens) do not have due to their more socialized system, such as the need to save for college for their children, own family healthcare costs, retirement, etc. (not to mention the free yearly spa stay in Germany)
    Although, the information in this article is relevant, a comparison to Latin America or other less developed countries should be adjusted to cost of living. Nevertheless, I think it is more relevant to compare physicians' salaries to other professionals' in the same country.
    I believe, in general, salary should be dependent on the 5 following factors:
    -- Length and complexity of training required
    -- Responsibility inherent to the job, aka, how "important" what you do is for society (and therefore, includes the risk of malpractice lawsuits.)
    -- Risks from the job
    -- Workload (such as nights, weekends, and working hours)
    -- Skill required (e.g. IQ)
    Does any professional demand higher performance on any of these factors than medicine?(e.g., Medicine is riskier than coal mining) Why, then do CEO's, CFO's, lawyers have higher income than physicians?
    Following the same reasoning, I also do not understand why there can be 20-fold difference among different specialists' salaries (think ophthalmology (2M) vs pediatrician (100K))
    I believe physicians should have stronger associations advocating for our incomes in times when corporations are taking over control over our jobs, but we should start by fixing the inequalities amongst us

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  9. Try comparing the CEOs of European hospitals to the CEOs in the united states, also I'd love to see the numbers of specialist physicians in cities compared to rural areas in America. Thank you

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  10. I fully agree with your outlook, insurance companies have such a hold on the practice of medicine in this country unfortunately. Addressing caps on medication would be a substantial start in my opinion, rewarding family general practice would be another.

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  11. The bigger issue is that just about any profession pays more in the US than anywhere else. Try doing this with tech workers, finance workers, attorneys etc. It'll look exactly the same.

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  12. I am not greedy because I want money for spending an incredible amount of time gaining expertise. It is return on my time investment. It is just as greedy to want the price low as it is to want the price high.

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  13. The survey is a typical apple versus oranges study where the only similarity is they are both fruit, i.e., physicians. Totally useless analysis for all the reasons others have pointed out in their comments.

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  14. Can we please emphasize the workload difference? I have friends in the UK and Germany. their workload is probably -15-20% of mine, and they make way more than 20% of my US income

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  15. Doesn't matter. The public perception that physicians make too much money persists. That is controlled by corporate interests who will continue to direct the anger at us as justification for paying us less.

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  16. The surveyors didn't consider the cost of education, cost of living and cost of medical practice including Malpractice, besides many other factors. The quality of care is directly proportional to the cost. Mexico's docs make 12000.00 per year, so the Medscape surveyor should go to Mexico for all future medical treatments.Ask yourself why everyone from all over the world rushes to America for medical treatment?

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  17. Thank you for this article I needed a good laugh. You cant compare apples and oranges. My university billed 4X for my surgical services (4 years of college, 4 years of medical school all paid for now by yours truly and 4 year residency and 3 year
    fellowship)and the insurance company paid 0.9X. It maybe time to forgo taking what insurance will pay and let those social scientists with MBAs from Wharton see the Covid and surgical emergencies patients or do as our attorneys do take a percentage of their families income if the patient survives and nothing if not. All kidding aside until one has pulled 36 hr shifts every third night and handled tremendous responsibility
    how can they possibly know what a physicians time is worth

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  18. Greg Burnett MD MHCMSeptember 12, 2021 at 6:30 AM

    There are many valid points already made. Here's another:

    Its unfair to blame or equate physician salaries to the overall cost of healthcare in the US (which I believe is too expensive).
    Physician salaries account for 12% of each healthcare dollar spent, far less than insurance premiums, hospital care, and prescription drugs. On the last item, our government, despite being the largest purchaser of pharmaceuticals in the US, has historically not been allowed to negotiate any drug prices, and our prices are significantly greater than almost anywhere else in the world.

    One example demonstrating my point-
    https://www.ahip.org/health-care-dollar/

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  19. Has anyone explored the proposition that hospital CEO’s are, perhaps, overpaid? An online masters in HC administration and ACHE membership qualifies one for BONUSES greater than my annual income, all benefits included.

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  20. I think most hospital CEO's are reasonably paid, since the majority of hospitals are small-town struggling entities. However, the top 25% outliers are obscene. The CEO's for health insurance companies are even more outrageous.

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  21. There are some good counterpoints in the thread. I would not say your argument about debt and malpractice is that strong, considering average debt is ~200k and malpractice insurance is on average 7.5k/year.

    Malpractice insurance over a lifetime has been factored into worth, so its only an income adjuster while debt itself has no bearing on income, only net worth. Thus adjusting for those factors it just becomes 309k/yr salary and 1.5M net worth averages which are still painfully obviously above the other countries. So arguments shouldn't be focused on those elements.

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    1. Where is malpractice $7.5k/year? I'm in a low-risk, non-surgical specialty, 20 years claim-free, work part-time and get a part-time discount, and pay more than that. High-risk specialties in my state pay >$100k for malpractice.

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  22. This discussion is irrelevant as ALL salaries and wages are elevated in the U.S. versus most of the world. This very much depends on the value of the currency relative to the rest of the world. The relative value only becomes relevant when U.S. citizen spend their U.S. money overseas.

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  23. I have many relatives who are physicians in Europe. They had almost no debt coming out of school. They work less than half the hours I work during the year. There training lasts 6 years not 8 before residency and their residencies are not near as vigorous which is why many of their physicians have to retrain when they arrive in the US. Why did they leave out a comparison to Canadian doctors salaries?

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