Economics

The Evil-Mongering of the American Medical Association

Obama's cozy relationship with Big Medicine will hurt patients

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In his war against terrorism, President George W. Bush declared a simple, binary formula to judge the world: "Either you are with us, or you are with the terrorists." Now, Obama and the Democratic leadership have borrowed the same formula to draw the battle lines over health care reform, dividing the country into those who are for ObamaCare and those who are evil-mongers.

But the entities that will be most injurious to the nation's health are not so much in the evil-mongers' group but the first group, including the American Medical Association—a doctors' cartel that has controlled the medical labor market in the U.S. like its personal fiefdom for a century. Instead of "palling up" with it, President Obama should do everything in his power to break its choke-hold and bring physician salaries—among the biggest drivers of health care costs—back down to Earth.

The association has managed so far to escape the wrath of MoveOn.org and other Democratic apparatchiks by muting its opposition to their beloved public option—the proposed government-run health care plan—and joining a coalition of industry groups pledging to cut $80 billion in health care costs over the next decade. The president has been touting these savings as if they have been signed, sealed and delivered to the bank. But anyone who buys—even for a nano-second—that anything good can come for taxpayers or patients from an alliance between Big Government and Big Medicine should see a doctor.

The fact of the matter is that even if the AMA delivered its share of these "savings," it wouldn't begin to make up for the costs it imposes on the country—both in lost dollars and poorer patient care.

According to a 2007 study by McKinsey&Company, physician compensation bumps up health care spending in America by $58 billion annually,on average, because U.S. doctors make twice as much as their OECD peers. And even the poorest in specializations like radiology and surgery routinely rake in around $400,000 annually.

Doctors—and many Republicans—constantly carp about the costs of "defensive medicine" because it forces providers to perform unnecessary procedures and tests to insulate them from potential lawsuits. But excessive physician salaries contribute nearly three times more to wasteful health care spending than the $20 billion or so that defensive medicine does. "While the U.S. malpractice system is extraordinary," the study notes, "it is only a small contributor to the higher cost of health care in the United States." Meanwhile, other studies have found that doctors' salaries contribute more to soaring medical costs than the $40 billion or so that the uninsured cost in uncompensated care–the president's bete noir.

But how has the AMA managed to get away with such princely remuneration that ordinary mortals in other professions—even ones such as law and engineering that also require arduous training—can only dream of? After all, in a functioning market, a profession offering such handsome returns would become a magnet for more people who, over time, would bid down "excess" wages.

But that's not how it has worked in medicine since 1910 when the Flexner report, commissioned by the AMA, declared that a surplus of substandard medical schools in the country were producing a surplus of substandard doctors. The AMA convinced lawmakers to shut down "deficient" medical schools, drastically paring back the supply of doctors almost 30 percent over 30 years. Few new medical schools have been allowed to open since the 1980s.

Still, the AMA along with other industry organizations until recently had issued dire warnings of an impending physician "glut" (whatever that means beyond depressing member wages), even convincing Congress to limit the number of residencies it funds to about 100,000 a year. This imposes a de facto cap on new doctors every year given that without completing their residencies from accredited medical schools, physicians cannot obtain a license to legally practice medicine in the U.S. Even foreign doctors with years of experience in their home countries have to redo their residencies—along with taking a slew of exams—before they are allowed to practice here.

The upshot of all this is that now the country is facing an acute shortage of doctors that even the AMA and its sister organizations cannot deny anymore. Indeed, the Association of American Medical Colleges, a private nonprofit industry advisory group whose forecasts effectively determine how many new doctors will be allowed at any given time, reversed itself in 2002 issuing this belated apology: "It now appears that those predictions [of a glut] may be in error."

One way to relieve the shortage of providers that the medical industry has created would be for the AMA to abandon its aggressive game of turf-protection and allow nurses, midwives, physician assistants and practitioners of alternative therapies such as chiropractors, to offer standard treatments for routine illnesses without physician supervision. For instance, midwifery, once a robust industry in this country, has been virtually destroyed, thanks to the intense lobbying against it by the medical industry. In 1995, 36 states restricted or outright banned midwifery, even though studies have found that it delivers equally safe care at far lower prices than standard hospital births.

Similarly, the AMA long regarded chiropractory as tantamount to "quakery," and barred doctors from professionally associating with chiropractors or making referrals to them, something that the courts overturned as an illegal violation of antitrust laws in 1987. But the AMA is undeterred. Three years ago it launched something called the "Scope of Practice Partnership," a self-appointed watch-dog group, whose express purpose is to ensure that chiropractors don't offer any services that might be remotely considered outside their legal scope.

The AMA does all this in the name of patient protection. But Milton Friedman, the late Nobel laureate, noted in 1961 that the AMA's licensure and other efforts to control the supply of doctors and services had produced a net diminution of care. "Licensure has reduced both the quantity and quality of medical practice," he wrote in Capitalism and Freedom. "It has retarded technological development both in medicine itself and in the organization of medical practice."

Although Friedman's views were controversial at the time, they now enjoy an overwhelming consensus among economists. That's because it has become painfully clear that the net effect of AMA-type restrictions hasn't been to make better quality doctors available to more people, but to reduce existing options, especially in rural and other under-served areas.

Obama and his fellow Democrats blame the current health care mess on the free market. But a free market can't exist when a cartel with the ear of the government is allowed to control a key input for its own self-aggrandizement. If the president is serious about lowering health care costs instead of advancing an ideologically driven government takeover of the industry, he should be doing everything in his power to disband it—not cozy up to it.

Shikha Dalmia is a senior analyst at Reason Foundation and a biweekly columnist at Forbes, where this article originally appeared. Ben Tonkin provided valuable research assistance for this column.

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  1. Yeppers

  2. let’s not forget dentists, they make a truck load of money too.

    1. Wayne, you have definitely shown your ignorance. You have no idea as to the high costs of running a dental practice and show equal iqnorance of how long it takes for a new dentist to pay off education costs, plus the costs of new equipment, rent, utilities, employees, continuing education, malpractice insurance, supplies, etc., etc. Just where do you get the idea that dentists “make a truckload of money?” Many of them go broke unless they can at least make overhead and the thousands of dollars each month it costs to run a dental practice. I should know; I did it for 35 years, and the only money I made was what I saved and invested, and I did it by being frugal, not taking vacations, etc. You owe an apology to those who read the pap you wrote.

  3. The “you’re either with me or against me” ultimatum has always been an easy one for me no matter who you are or even if I agree with you.

    The doctor making making business has been a racket for so long it isn’t going anywhere. They will protect their price gouging from year one of medical school on.

  4. I forgot. The thing that kills me is that it’s harder to get into veterinary school than med school. Not because of a falsely suppressed process of producing vets, because of the number of schools and the competitiveness.

  5. I posted this earlier today at an earlier mention on Reason of this article:

    Her article was a poorly researched mess. Most egregiously, she writes as if the AMA is something more than what it is: a lobbying group just like every other rent-seeking trade organization jostling for position at the federal teat. Think SEIU, the AFL-CIO, the dairy farmers, the sugar farmers…you get the idea. The respondent who remarked that residency slots, not med-school slots, are the chokepoint in the doctor-supply pipeline, has it correct. And they aren’t even colluding very effectively to control numbers, given that most teaching institutions face severe service obligations that can only be met by increasing the numbers of low-paid trainees to do the work.

    That said, I’d be happy to have a TRUE free market in healthcare providers. I’m an internist and anesthesiologist with ten years’ post-college training under my belt, and almost two decades of practice experience. I have to believe that this skill-base has some value in a free marketplace for healthcare. Ultimately that, and not government fiat or cartel restriction, determines my salary.

    So let’s move to a REAL free market. No government licensing or regulation of ANY KIND. Let anyone who wants to hang out a shingle offer healthcare in return for full disclosure of his/her training, experience, and outcomes history. Let him or her purchase liability insurance coverage from anyone who’ll provide it; and seek facility privileges from anyplace that will offer them. Physicians should not feel threatened by any of this. Why should I give two shits if someone wants to visit a chiropractor, aromatherapist, or cosmic-wave healer on his own dime?

    But in return, any healthcare provider should be able to charge whatever the traffic will bear for his/her services, paid on mutually-agree terms between patient and provider. You want insurance reimbursement? That’s between you and the Ginormous Health and Casualty Company. I expect to be paid for my services; just like your plumber, I don’t work for free. No pay, no play.

    Patients and providers would be able to choose, or reject, any relationship between themselves, and to define that relationship. A provider should be able to reject anyone who refuses to submit liability claims to arbitration or to whatever dispute-resolution method s/he chooses, and the courts should enforce this private contract. Providers will have to consider, in turn, whether such a contract provision makes them less competitive in the marketplace to ply their trade.

    Similarly, I should be free to fire you from my practice if you become a pain in my ass by refusing to take my advice or abusing my office staff or generally ackkin’ a fool. You may also leave at any time with my blessing. Since under this system medical records are the property of the patient, and made available to treating doctors on an ad-hoc basis, there are no records hassles to deal with. And if you want after-hours, night, or weekend care, expect to pay accordingly. (Ever try to get a plumber out on Christmas Eve? It’s gonna cost you extra.)

    With surprising speed, all of this will sort itself out as individuals make informed choices, and bear the costs of those choices. People will have to do some research ahead of time to see what healthcare resources are available in their town, at what price and quality level. (I’d say most patients do more research before buying a car than they do before having their hernia electively fixed.) You can expect that quite soon, hospitals and doctors will figure out how to offer prepaid packages of services so that someone with an exploding gallbladder, for instance, isn’t haggling over price in the ER. Providers will compete on service and outcomes, and patients will get what they say they want.

    Time will tell how well they are served by this new system. But at least no one can say s/he was compelled to do anything.

    1. Well said. It is amazing how easily authors such as Shikha Dalmia can sway opinion and avoid facts, even though she publishes her opinion as if it were fact. The posts by some people here would suggest that physicians and dentists be paid a “fair” wage, but they have no idea what “fair” is, other than that it should more than likely fall in the realm of middle class wages.

      Obama and his cronies would like nothing better. The problem is that admissions to dental and medical schools would diminish to the point that there would be a real scarcity of physicians and dentists because no one in his right mind would want to risk a career in which he or she would be faced with almost certain bankruptcy at some future time.

  6. if Obama is really serious about reform, he should do everything in his power to break the American Medical Association’s choke-hold on the medical labor market

    Someone needs to spend a little time imagining what Obama believes is in his power…

  7. break the American Medical Association’s choke-hold on the medical labor market and bring physician salaries-among the biggest drivers of health care costs-back down to Earth.

    Come on… I mean, come one, you’ll never pass any reform of anything by telling the workers they need to earn less. Even if it’s true.

  8. Mike S. I scanned your post. AMA chokeholds aside, aren’t private certifying agencies part of a free market process?

    I mean, an ‘industry’ pops up and wants to let consumers know who abides by certain minimum standards and who doesn’t. So an industry group forms, publicly states some standards and allows individual players to apply and certify. If you pass, you get their seal, if you don’t, you can still do business, but you can’t claim their standards of performance.

  9. Mike S. I scanned your post. AMA chokeholds aside, aren’t private certifying agencies part of a free market process?

    They certainly are. The AMA, however, exercises its chokehold via medical school accreditation, graduate program capacity, and, of course, state physician licensing.

  10. On the accreditation front, the ABA does the same thing. Without that, every single American citizen would now be a lawyer.

  11. There are a lot of family practice docs that claim they’re currently having trouble making ends meet these days. Where does Shikha get the figure that 40% of medical costs are physician fees? My understanding as a physician is that physician fees make up less than 10% of medical costs. For example, President Obama recently made news by claiming surgeons make $30K amputating feet. Turns out $30K is what the all charges amount to, but only $1K goes to the surgeon.

    And why does Shikha think radiologists are among the least well paid specialists. They are among the best paid specialists.

  12. And even the poorest in specializations like radiology and surgery routinely rake in around $400,000 annually.

    I read that as “even the lowest-paid in very high-paid specializations earn very high pay.”

  13. Who in their right mind would bother with law unless they had a fairly solid way into a decent wage. New lawyers wages have been plummeting. Even the top slots at graduation are taking hits. There are so many fucking lawyers floating around you can’t swing a penis w/o hitting one.

  14. “princely remuneration that ordinary mortals in other professions-even ones such as law and engineering that also require arduous training-can only dream of?”

    Hogwash. Miss Dalmia’s history of typically cogent articles makes me quite disappointed in this one.

    According to payscale.com, most internal medciine doctors make around $180,000. Lawyers, who pend three (not four) years in school and don’t have to do a residency, make around $90,000. A difference of 90,000 doesn’t seem like a huge tragedy, as I think there’s a bit of difference between the job lawyers do and what doctors do. And, if we go down that route, shouldn’t we start bitching about how much actors and pro athletes end? Where does it end?

    I agree that Obama’s plans are not the best for our healthcare situation, but I do not think that writing articles demanding income re-distribution is the answer.

  15. Barack Obama is the bastard child of Malcolm X.

  16. “…demanding income redistribution…”

    That damn free market again!

  17. According to payscale.com, most internal medciine doctors make around $180,000. Lawyers, who pend three (not four) years in school and don’t have to do a residency, make around $90,000. A difference of 90,000 doesn’t seem like a huge tragedy, as I think there’s a bit of difference between the job lawyers do and what doctors do.

    I’m going to have to fly the bullshit flag high on this one.

    The starting avg. is 40 (which is high by most I’ve talked to) 5-9 years out is 90K. Take the price of a top law school and the return and doctors have it far better even with the larger debt. I know one attorney that landed a six figure job her second year out of school graduating suma from one of the top 10. The rest are grading papers for 30-40k a year or working their ass off for maybe 60k. A J.D. is barely worth the time and money when an MBA(retard with a piece of paper) with Masters in Accounting (3 years total for both) usually pulls high 90s to six figures day one. Although this economy has flooded that market as well. Just wait there will be a million PhDs in finance and other business subjects within 2 years.

    I know far more attorneys grading papers or working in business than actually practicing law. Most not making any return on the massive bill it took to get the JD.

  18. I agree that Obama’s plans are not the best for our healthcare situation, but I do not think that writing articles demanding income re-distribution is the answer.

    This article demanded nothing of the sort. It demanded an end to the guild protectionism practiced by the state for the benefit of the AMA.

  19. That $58 billion is just 2% of the $2.1 trillion total. While U.S. physicians may make twice what OECD docs do, their pay has only a tiny impact on the bottom line.

  20. There are a lot of family practice docs that claim they’re currently having trouble making ends meet these days. Where does Shikha get the figure that 40% of medical costs are physician fees?

    Family doctors are at the low end of the pay scale among doctors, despite the fact they handle a huge majority of medical care in the US. Another artifact of our third-party insurance regime.

  21. Sorry hmm, but you’re full of shit. Anyone graduating summa cum laude from a top 10 law school will have their pick of large law firms to work for. Most big law firms are still starting at $160K. Those that have reduced 1st year associate salaries are still paying well above $100K. I realize that market is tanking, but your anecdotes are total baloney.

  22. “I’m going to have to fly the bullshit flag high on this one.”

    Well, I’ll have to apply the same to your post.

    The average starting salary for a doctor for their first year out of medical school is about 40,000. That would be what most interns make. The next 2-5 years are spent making about 2-10K per year. No doctor has ever landed a six figure job within 2 years out of medical school, regardless of class rank or which school they went to.

    “I know far more attorneys … working in business than actually practicing law. ” This is missing the point. If you receive a job in business with a high salary, and you were chosen over other applicants because of a JD, then you are receiving a return on your bill. Likewise, there are many MD’s who do not practice medicine (ie they work for pharmaceutical companies), highly unlikely they are making a low salary.

    “an MBA(retard with a piece of paper)” Well, there’s probably a neurosurgeon somewhere thinking the same thing about lawyers.

    The point is that fomenting class warfare, where everyone bitches that individuals in another career field (be it law, medicine, pro football, etc.) are making too much money, is not productive at all, and seems quite out of place on this website.

  23. I have a med school test tomorrow, so I’ll keep it quick. Any self-interested person considering entering medicine would gladly trade any potential increased salary in order to work in a genuine free market (aka ER docs not being enslaved to the Holy Underserved, pre-med students not having to waste years of their lives and potential earning careers in the Peace Corps and other bullshit orgs, medical students not kept out of certain competitive specialties due to artificial shortages). Three primary factors prevent this:

    1. A misplaced sense of altruism: far too many of those entering the profession are fed the liberal dogmatic bullshit that a doctor exists only to serve others, in which case universal cadillac-level health care must be considered mandatory. A side effect of this altruism is the ego boost that comes alongside false altruism, in which case the physician considers himself the only one capable of delivering the best quality care deserved by the uninsured.

    2. Paternalism: Many doctors believe they know better than their patients or potential patients, in which case a free market is a genuine hindrance due to its effect of allowing people in rural areas to decide when to go to the doctor instead of following mandates from public health officials living in the suburbs and working at universities.

    3. Those who have beaten the system want to stay on top: This is the one Dalmia touched on. While the vast majority of doctors and potential doctors are unhappy with the system, (here I include those who spent years applying to medical school but never got in, those who couldn’t afford the thousands of dollars typically needed to apply to medical schools, primary care docs who wished to enter artificially supply-depressed specialties, etc), a certain percentage benefit and unfortunately this group is the best-organized due to its intense personal interest in the status quo.

  24. The story brought up some important points, but it was highly biased. It also omitted a key point.

    First, the AMA does not have the amount of political power implied by this article. Dalmia, like many other writers on this topic, portray the AMA as having more power than many governments. It is a ridiculous belief. The AMA would love to have just half the power investigative reports think it has.

    Second, the closure of deficient “medical schools” in the early 1900s was NOT an AMA project only: responsible physicians across the country wanted these poor excuses for medical schools closed down. They were producing half-trained quacks, not physicians. They had no admission standards except the ability to pay tuition. Some students didn’t have high school diplomas but managed to get MDs.

    The AMA is not trying to prevent competition to drive up charges. The average physician works more than 65 hours per week. More doctors to carry the load would be welcome, and they would not drive down charges. (Lots of patients who are paying for their own care will drive down charges. Nothing else will.) The federal government has been the 900 pound gorilla halting the expansion of old and creation of new medical schools for over 30 years. The federal government believes there are too many physicians, and particularly too many specialists, providing unneeded care to Medicare and Medicaid patients. The federal government believed that strangling physician supply and reducing the numbers of specialists would lower Medicare and Medicaid costs. To achieve that goal, the federal government decreased funding of specialist residency programs and increased funding of primary care programs. The AMA, and most other medical groups, opposed this action. (In an era of increasingly complex medicine, we need more specialists, not fewer. The myth of Marcus Welby, M.D. needs to be buried.)

    Third, the AMA is NOT the voice of American physicians. Dalmia failed to mention that fewer than one-fourth of practicing physicians are AMA members, and that some of the AMA member physicians disagree with AMA policies and actions. The reality is that a minority of physicians support the AMA’s political positions. Most of us dislike how cozy the AMA is with the federal government. The AMA’s approval of Obamacare is opposed by a majority of licensed, practicing physicians.

    Stories that demonize the AMA are just cheap shots by reporters who are either biased against physicians or who are too lazy to discover the truth.

    Disclaimer: I was an AMA member for three years (1989-91) to qualify for their great disability plan. That was the only great thing about the AMA: I had voted against almost every policy stance it adopted.

  25. jacob, I work in the finance office of a lower tier medical school (we aren’t even in the top 100 research hospitals according to US News). Our residents make $40,000+. I imagine residents at places like Harvard, JHU, and UPenn make much more than that. I don’t know where you get this 10,000-20,000 figure, but I have a hard time believing that is the norm.

  26. Mark

    I agree with much of what you wrote, and I think you have a good understanding of the big picture at a fairly early stage. Having been through the whole process, I’ll have to qualify one of your statements:

    “pre-med students not having to waste years of their lives and potential earning careers in the Peace Corps and other bullshit orgs”

    I didn’t exactly understand this statement, but I took it to mean that “pre-med students have to join the Peace Corps and other bullshit orgs to get into medical school.”

    Pre-med students don’t necessarily have to do this. The good ones can either get in while still in high school (combined BS/MD programs), or can get in right after the 4 years or college.

  27. No, skeptical. What I meant is that you add 2-10K per year after graduating. For example, a PGY 1 makes 40K at University of X hospital, then a PGY2 would make 43K, etc. Re-reading my post, I realize I wrote that poorly..

    ” I imagine residents at places like Harvard, JHU, and UPenn make much more than that.”

    No, they don’t.

  28. I agree with the author that the AMA and the bureacrats need to go but her defense of the govt and placing the blame on doctor’s making to much money is right out of the Dem’s attack lines. Doctors like execs and CEOs make a lot of money because they spent the time to study and work up to the position they are in Consider two cases. My dad is doctor and it took him 8 years plus his residency to complete school and another 5 to find a place that paid a wage to support our family. He makes more but why should he be punished. Or case 2, my uncle is a radiologist and once again he spent years and years in school studying and working. Once he got out he had over 200 thousands in loans and just 10 years ago paid the last of them off. Punishing doctors by decreasing their wages and trying to say to others come on in is not free market, it is govt intervention once again. One who writes on this site I would think could understand that. Guess not.

  29. Doctor salaries are not as high as it seems if you considering their working hours. From the Bureau of Labor Statistics website: “Many physicians and surgeons work long, irregular hours; more than one-third of full-time physicians worked 60 hours or more a week in 2006.”

  30. This article seems very out of place on Reason.com.

    First of all, I’m not sure why the author singled out the AMA as an interest group that has the President’s ear. The hospitals, insurers, and pharmaceuticals have much greater clout, as measured by their campaign contributions. Shouldn’t we be upset about the bigger picture – that interest-group liberalism is once again trumping free market principles? Principled reform is never going to happen as long as politicians are in bed with the interest groups of every size, shape, and flavor, all of which have a narrow scope of interest – their own, while disregarding the system as a whole.

    Furthermore, as noted by previous comments, $58 billion is a mere drop in the bucket when compared with the overall amount we spend on health care: $2.4 trillion. It’s also a drop in the bucket compared with the $650 billion of “higher-than-expected” spending on health care identified by the McKinsey Report cited in the article. If 75% of health care costs are controlled by physician decision-making (a fact), it seems to me that instead of talking about how physicians are making too MUCH money (and pissing them off in the process), we should instead be talking about how to incentivize them to manage those costs more effectively.

    It would’ve been much more interesting if the author of this article had delved into the details of why physicians make more in the US – and why they still aren’t happy about it. Might it be that socialized medicine (in the other countries to which the US is compared) artificially holds DOWN physician salaries? How does the level of pain-in-the-ass regulations with which physicians must deal in this country compare with those of other countries?

    For some interesting data on physician salaries around the world, check out http://www.oecd.org/dataoecd/51/48/41925333.pdf. From the first several figures, you may be surprised to discover that it is actually GENERAL PRACTITIONERS in the United States that are doing relatively much better than their global peers, not specialists. In fact, GP’s in the US make $25K/year more than in any other country, while specialists in the US make $54K/year LESS than in the Netherlands, which has the highest salaries for specialists.

  31. This article seems very out of place on Reason.com.

    Drink!

  32. Personally, I don’t place much faith in “alternative” medicine. But it’s pretty absurd that, while they are safe as long as they continue practicing unproven, unscientific, procedures they are fine, but as soon as they offer treatments that are scientifically proven to work, the law comes down on them. Fucking priceless.

  33. The federal government believes there are too many physicians, and particularly too many specialists, providing unneeded care to Medicare and Medicaid patients. The federal government believed that strangling physician supply and reducing the numbers of specialists would lower Medicare and Medicaid costs.

    Yeah, because restricting supply always brings down prices.

    The overwhelming economic stupidity of politicians never ceases to amaze me.

  34. Jacob. You must know different MDs than I do. I have one podiatrist and one heart doc in the family, both in-laws. Neither of them coroborate your salary assertions. Each claims 100K by year two. You are cherry picking the general physician to make your 40k point. Pretty lame tactic. Did you think I wouldn’t notice that? The flag is still flying high.

    Internal
    Family

    BLS per specialisation

    Sorry hmm, but you’re full of shit. Anyone graduating summa cum laude from a top 10 law school will have their pick of large law firms to work for. Most big law firms are still starting at $160K.

    So, like I said? For the record she cleared 160K easy her first year.

    I know one attorney that landed a six figure job her second year out of school graduating suma from one of the top 10.

    Those that have reduced 1st year associate salaries are still paying well above $100K. I realize that market is tanking, but your anecdotes are total baloney.

    As anecdotal as my statements were. They fall in line with every other data I have seen.

    50K

    BLS stats

    I’ll keep both flags flying high both anecdotally and statistically until someone posts something to refute that with more than I know such and such and it’s total bullshit or an outlier.

  35. The average starting salary for a doctor for their first year out of medical school is about 40,000.

    Bull. Fucking. Shit.

  36. @Nooge
    That’s not unreasonable. The average person coming out of med school is going to go into an internship, not straight into attending. If anything, I’d think $40k is a little high.

    Anyway, I refuse to read any article that uses the phrase “Big X” to describe any institution. I’d have thought Reason would have been better than to use this tired leftist attack phrase against the free market (which is what “Big X” is always referring to, you never hear anyone say “Big Medicare” or “Big Regulator”.) I was wrong. Not saying that medicine is a free market, but that they’re trying to imply that the market is screwed up precisely they define “free” to be “not completely controlled by the government in all forms”.

  37. “-even ones such as law and engineering that also require arduous training-”

    I beg to differ on this one. I’ve worked for and with doctors, business executives, engineers and lawyers. The vast majority of the things lawyers do can easily be done by a paralegal or experienced legal secretary. Before moving to IT, I spent seven years as a paralegal. I see no reason why law school should take 3 years or why it should cost so much. About the only thing that most students seem to get out of law school is an incredibly inflated ego.

  38. Personally, I don’t place much faith in “alternative” medicine. But it’s pretty absurd that, while they are safe as long as they continue practicing unproven, unscientific, procedures they are fine, but as soon as they offer treatments that are scientifically proven to work, the law comes down on them. Fucking priceless.

    Next time you get the chance, ask a doctor what they think about an oil monopoly, or a monopoly upon steel, cars, public education, etc, etc. They will almost undoubtedly be educated enough to know that monopolies screw people and reduce quality but will they will also be so intellectually dishonest as to fail to think that a monopoly on medical licensing does the same things.

  39. “The average starting salary for a doctor for their first year out of medical school is about 40,000.

    Bull. Fucking. Shit.”

    As an average, yes that is congruent to my own experience.

    My year of internship I was paid $35,500 and the subsequent 4 yrs. I was paid $38,500 each year while doing a general surgery residency.

    This is the reason why “moonlighting” during residency is greatly frowned upon as the work week (including studying and skill practice easily exceed 70 hrs. per week). Policy where I completed residency mandated no more than 30 hrs per shift with a mandatory 8 hr break in between shifts (which is laughable as most, including myself used that time for aformentioned study/skills practice).

    My base salary at five years in practice is $110 K, which is not enough to cover my malpractice insurance, let alone repayment of my educational loans.

    A quick word about pricing: whenever a physician is employed by a hospital network or a similar provider (this is especially true of PCP’s) they have no control over the price scheduling for an office visit/consult.

    For an example, my network sets the schedule based on the level of the consultation, i.e. whatever the chief complaint (and secondary complaints if related to the DX) presenting will determine the level of the consult. If you come in for an annual physical w/ a chem 8 panel, that would be a level I (approx $80); now, if during the consult you mention symps consistent with exogenous depression and it is appropriate to start an anti-depressant, you are at a level II (approx $110). Suffice it to say the more complex the complaint, the higher the level of the office visit (office visits/consults are level I through IV).

    Medicine has no “set” price schedule as each person is different, it is left up to the discretion of the examining physician; therefore, price determination of a complex case is determined AFTER you have the visit/consult. Exceptions to this is Medicare/Medicaid as Congress determines this and reimbursement rates, and physicians in private practice (no hospital affilliation but has hospital privileges) as they determine their own pricing schedules.

    Disclaimer: I renounced my AMA status in 2008. They don’t speak for me AT ALL. It should also be noted in the 30’s the AMA lobbied vociferously against FDR’s proposed programs as they felt it would lead to “socialized medicine” and impede the autonomy of physicians and patients (from Wiki – AMA).

  40. The thing that kills me is that it’s harder to get into veterinary school than med school.

    And you may not know how to be a veterinarian when you leave. My father has been a vet for almost 40 years and he says the new ones don’t even know how to neuter a cat, arguably the easiest procedure they will ever do. Fortunately for him, his salary has gone up a lot due to the ineptitude of his colleagues.

  41. Not to mention veterinarians have more than one species to be qualified to treat. Unless they specialize in a species or type of veterinary medicine.

  42. My own feeling is many procedures that are regularly performed by doctors could easily be performed by nurse practitioners or even RN’s. What EllisWyatt says about paralegals strikes me as convincing, also. And it doesn’t stop there. I know a lot of college courses that don’t need to be taught by professors, but could easily be taught by lecturers or even grad students. But we loved our over-trained, overpaid experts.

  43. @Nooge

    My first year salary was 36.5K. That’s what an intern makes. Care to prove me wrong?

    Sorry Hmmmm, you’re wrong again. NO INTERN ON THIS PLANET makes 100K. But again, please try and prove me wrong.

  44. This is one of the few article that I have even seen on what is usually a good site, which contains more glaring factual errors than the comments that follow–and that is saying a lot!

    AMA a cartel? What a joke. The AMA is a historical footnote that politicians and lazy journalist use for their own purposes. Few docs join and many of those are institutional types whose employer pays their dues automatically.

    The ridiculous comparisons made are disingenuous or show a complete lack of meaningful research. The average chemical engineer with 4 years of college makes nearly as much as the average family physician, internist, pediatrician or psychiatrist in their middle age earning years–but while the chem e was earning a good salary while the doc was still paying tuition because after 4 years of college, the doc had 4 more years of med school and then 3-4 years for 80-120 hour weeks at low wages in residency before he could start earning professional wage at age 30 or later. Sure lawyers don’t do so good on average, but that is because it is a lot easier to get into, still a quicker pop out of the educational morass, and the lawyer has the possibility of making really really big money–they trade off a high guaranteed average for that. Besides, most of my friends who couldn’t hack premed went to law school. So did the troll kicked out of med school for cheating.

    And the ridiculous implication that 400,000 a year is a poor salary in medicine, when that is more than double the average, just takes the cake for yellow journalism

    This piece should be in the Onion

  45. A few clarifications:
    Residents make a set salary as determined by each program. Rarely is this much above 35K per year. Your salary increases each year during residency but rarely exceeds 45K. Not bad for 80 or more hours per week and 200K in student loans. The best residencies often pay LESS because they are more sought after (Harvard, Mayo, etc). Once you are done with residency, your wages increase markedly.

    Radiologists are some of the highest paid specialists with the best working environment and hours. Yes, I am jealous. But, putting me in that dark room I would be napping……..

    The author lists engineers and lawyers as having arduous training. Does that include 4 years of undergrad, 4 years of med school then 3 to 10 years of residency? I guess not…..

    Have you been to a vet before? I have numerous times. I ask them rudimentary medical questions and have gotten the “deer in headlights” looks. Pre-Vet is not Pre-Med. Different coursework and student population. Comparing the 2 is like saying it is harder to get into Beautician school than Dog trimming school.

    What exactly is a Chiropractor suppose to do? Does the author understand the difference between DCs and MDs? They have little knowledge of pharmacology and standard medical practice. They certainly have a niche but treating your heart disease isn’t one of them.

    Many nurses are fantastic. How can increasing the responsibilities of nurses equate to better outcomes? Especially when physicians make mistakes. Would you expect someone with less training to be better at a job? Seriously folks. If you decrease the standards of the people taking care of you, don’t be surprised to see outcomes plummet.

    Society pays me a good wage because it values what I do and that few people have the desire to sacrifice their 20’s, their health, family and personal relationships to achieve this goal. If you decrease what we make, YOU WILL GET WHAT YOU PAY FOR.

  46. Lol at hypocritical ‘libertarians’ standing up for a monopoly.

    If the AMA is as insignificant to health care price inflation then you needn’t fear having their trust busted and provider supply returned to the free market.

  47. To Faithkills,

    Adding more providers to a geographical area does not decrease prices. Myriad studies have shown that it has the opposite effect. More costs for little gain.

  48. @Chris

    I have no interest in adding anything.

    I’m interested in subtracting a government enforced monopoly, and I’m a bit disgusted that everyone in both parties dances around the elephant that’s been in the room for a century.

    I don’t want to tell doctors what to do or what not to do. I don’t want to tell anyone what to do or what not to do.

    Health care prices have clearly become decoupled from overall inflation since the advent of the AMA. In the last century, the population has tripled but the AMA, via the LCME, has managed to restrict the number of medical schools by a third.

    This has predictable, and intended, results and it has reverberated through the economy. Prices became too high for most people to afford them, so the insurance companies got involved, and they got tax subsidies. Big business made sure the tax subsidies were only through them so they could hold employers in fief. All that money attracted the legal parasites trial lawyers. Government loves selling all this market intervention to the profiting parties. All this on the backs of taxpayers and health care consumers.. ie everyone.

    This is all managed market crony capitalism bullcrap.

    The market needs to be freed. That’s the only ‘reform’ that will do any good. You have no sympathy here for rationalizations for continuing the monopoly.

    “No one hates capitalism more than capitalists”

    I know you fear a free market. But what you better understand if they finally get the public to swallow socialized medicine, in significant part because of the inflation because of your monopoly, no one will have any sympathy for you when they set your wages.

    The AMA has a lot of money, but you’re not singular, nor easy to deal with by the powers that be. Eventually you will get cut out of the deal.

  49. Having been in medicine for about 40 years I can speak with a little experience on this issue. First, the AMA is not the organization that you believe it to be. Less than 30% of physicians are members. They do not speak for physicians and most doctors disagree with the stands they do take. In fact, they have been advocating socialized medicine since 1910.

    Next is the issue of doctor salaries. They are high and high for good reason. You do not start making money till you are 30+ years old. It now takes about $250,000 to become a doctor in addition to the years of training. No other profession has this situation. Your earning years are only about 20. That means that at 50 you are too old and out to pasture or making substantially less than when you are younger.

    Simple economics do not apply to medicine. You produce too many doctors, the price does not go down. It goes up as they are working on what is called an economic profit. That means that if you go into medicine with the idea of making a certain amount of money, you will do so no matter what. The money is compensation not only for your time but also for the crap that you have to put up with from patients, other doctors, the government, nurses, and lawyers, as well as assorted regulators.

    The answers is fewer doctors and quit thinking about what others make.

  50. Simple economics do not apply to medicine

    False. They applied perfectly prior to government intervention.

    First, the AMA is not the organization that you believe it to be.

    The history of the AMA is readily available, I suggest you avail yourself of it.

    No other profession has this situation.

    And neither did physicians prior to the AMA.

    The answers is fewer doctors and quit thinking about what others make.

    Ok I had assumed lack of economic understanding but you’re clearly run of the mill intellectually disingenuous.

    There are too many people on Reason who understand economics for you to even try floating this bilge.

    Go back to DC and buy your monopoly there. We’re not having any.

  51. Heath care prices increase because our population is increasing in age. The older one is, the more likely he/she consumes care.

    How does one “open up a monopoly” to inexperienced providers without hurting people? Well trained MDs make mistakes. Opening up medicine to poorly trained mid level providers without supervision will be disastrous. Sorry faithkills. We are talking about people here. Also, I am not an AMA member. Don’t you think in the 80 or so years of the AMA, costs would increase as our life span increases and our quality of life improves? Health care is not free my friend.

    I would love to see transparency in the true cost of care as most employees care is paid by their employer. Remove this subsidy and allow insurance to be free of mandates and traded across state lines would be a good start. What you don’t understand friend is that we negotiate with insurance companies to provide services. How is this not a free market when the insurance company will instruct their patients to go to another provider? This does lower what we charge and is at least partially a free market. The choke point is the insurance companies and their regional monopolies.

  52. Anybody who looks back at the early 1900’s as a golden age of medical treatment is smoking crack. Any jackass could wire up a set of magnetic electrodes to cram up your butt and claim it cured arthritis. Root beer was advertised as medicine. Heroin was released to the public without clinical testing as a “non-addictive” alternative to opium (woops!) People still went door to door selling patent medicine. It may have been a free market, but it was a lemon market that killed people. In the inverted world of the libertarian, people who didn’t want this anymore are the “evil-mongers.”

  53. ~”President Obama should do everything in his power to break its choke-hold and bring physician salaries-among the biggest drivers of health care costs-back down to Earth.” ~ Shikha Dalmia

    Not a bad idea. But how about bringing the profits of insurance companies back down to Earth as well? Also, how about regulating the absurd cost of medical procedures and medicines? Because, as I’ve suggested to my representatives, nothing short of the latter will bring the cost of health-care down to a manageable level.

    Ultimately, whether tax-payers pay for health-care, or whether it is individuals or employers who pick up the tab, it will bankrupt the nation even if costs were to stay stagnant starting today. That is, of course, unless we just continue to cover less people and less medical conditions. Which is precisely what we’ll get if liberals whining about their precious public-option, or the selfish, right-wing screamers at Town Hall meetings get their way and shoot down reform efforts. It’s time for moderate, reasonable voices to speak up.

    ~”Doctors-and many Republicans-constantly carp about the costs of “defensive medicine” because it forces providers to perform unnecessary procedures and tests to insulate them from potential lawsuits. But excessive physician salaries contribute nearly three times more to wasteful health care spending than the $20 billion or so that defensive medicine does.” ~ Shikha Dalmia

    True. But then that’s what for-profit systems generally create – inflated value. Without regulations, which libertarians despise with a blinding passion, how are we to bring those excessive profits “back down to “Earth”?

    And yes, there is a lot of carping about Tort reform from many Republicans and doctors. Why? Because holding doctors, hospitals and insurance companies accountable for the care (or lack thereof) they provide their patients costs them money. And Republicans have a constituency to protect here – the wealthy.

    Lastly, far be it from me to defend the AMA, but Erik is quite correct about what “free market” medicine will get you.

  54. When you go to the hospital 5% of the bill goes to the doctors, 40% to nurses, and the rest to the hospital and insurance. I don’t see how 5% can be a “major cause of rising costs”.

  55. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane

  56. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won’t get the full deal by just doing regular skill english reading for those books. In other words, there’s more to the books of the Bible than most will ever grasp. I’m not concerned that Mr. Crumb will go to hell or anything crazy like that! It’s just that he, like many types of religionists, seems to take it literally, take it straight…the Bible’s books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on…the Bible’s books were written by people with very different mindsets

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