Inside Health Insurance: Part 3—Controlling Provider Costs--Doctors

There are lots of factors which go into our overall expenditures on heath care, but the amount we pay doctors is why we so quickly judge our health providers as greedy people who are getting rich on the backs of ordinary people. Everyone knows that doctors are at the top of the economic and social strata in their communities, but before you get carried away with income envy, let’s put some perspective on it.

No one would disagree that advanced education is a major contributor to higher lifetime income potential. Exceptions do occur, where people with unusual drive or talents find a way to rise to the top, in spite of limited education, and many highly educated people end up only earning average incomes; but statistically, this conclusion is a proven fact. Given that doctors must go through seven years higher education, plus several more years as interns or residents before they can practice general medicine, and even more if they want to specialize, that means that most doctors end up with up to two to three times the higher education of the average college graduate, and this alone can account for much of the increased income they ultimately earn.

Another consideration which affects income is value of service. Most people do get paid what they are worth, at least in economic terms. No matter how well you do your job, if there are hundreds of potential people who can step in and do the same thing, your job value is going to reflect that lack of demand. Whatever your job, if you work for a company which produces a product or service for profit, your value will also be adjusted to a relative proportion of what your task contributes to the revenue potential from the sale of that item. Whatever part of your salary and benefit cost that goes into the production of your company’s product or service, must be recouped in the sales price, thus significantly impacting the value of your time to what the market will pay for products in your industry.

Professional sports figures can get paid an exorbitantly high salary just to play a game, but what they really get paid for is their ability to help make millions for their team owners in ticket sales, sponsorships, and TV revenues. Similarly, well known celebrities, who can increase movie revenue potential by tens of millions, are rewarded handsomely by those who stand to profit from their public appeal at the box office. We readily accept the imbalance in these celebrity salaries, but we judge as unfair the income of the doctor, who spent over twenty years in educational preparation for their profession, but can save our life, increase our longevity, and treat our sicknesses to improve our quality of life.

Do doctors get paid too much for what they do? That is a matter of perspective. If you are in need of a specialist or a surgeon who has the training and experience to cure your disease and save your life, what is the value you place on your own life to have the best medical care possible? How much would you pay to live another year, or two, or ten? Do you want a second class doctor to take care of you, just to save a few bucks, but possibly risk your life? The path to become a doctor has been made incredibly hard, and many eager college students begin that path, but only a few complete it. This difficult journey ensures that the doctors who do end up in practice in your community are the very best that our country can produce. And no matter what you may think about their fees when you are well, when you are in need of their services in a critical way, their value to you suddenly becomes priceless.