Doctor-Side Health Reform

Eyck Freymann

Ezra Klein quotes T.R.Reed's book "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care." He agrees that successful health care reform will entail cutting down the windfall profits of the private companies that are making care so expensive. Here's the quote from Reed:

It's hard to imagine any private general practitioner in the United States charging just $27 for an office visit, or any specialist willing to settle for $34 for a normal consultation. Most of the fixed prices set by the health ministry amount to one third, and sometimes one quarter, of what the same treatment would cost in the United States. Not surprisingly, the cut-rate prices are reflected in doctors' cut-rate incomes. Dr. Bonnaud said he works about sixty hours per week (although he does take the standard five weeks of vacation per year), and his net income has been about 40,000 Euros ($52,000) per annum...That's roughly the average income for French general practitioner...the average French doctor is making about a quarter of what his counterparts in the United States would earn.

There are a couple of problems with this - French doctors in no way get the short end of the stick. First of all, 40,000 euros is, at today's exchange rate, almost exactly $57,000. And the average American doctor, according to the charts here, is around $150,000-160,000. This is 275% of what a French doctor makes. That's a lot more, but a lot less than the 400% claimed by Reed.

Second, it neglects to mention the societal differences in income. Despite having a much lower per capita income, France is consistently shown to have a higher standard of living than the United States according to the Human Development Index. In other words, the French get better educations and live longer than we do even though they make less money. This is easily explainable; the French system of taxation, unpopular though it may be in the United States, is able to provide education up to the highest level, plus effective health care, for everyone at heavily subsidized rates.

In France, an income of 30,000 euros is considered high, but people have to do less with the money they make. Doctors in the United States, because of the nature of our health system, need high incomes. Many American doctors owe hundreds of thousands of dollars in student loans, and each year pay thousands more in malpractice insurance. When you factor in these liabilities and the much higher cost of living in the United States, the American doctor doesn't seem so much better off.
The lesson here is not to imitate the French system. Traveling around the country, I asked many people what they thought of their primary/secondary educational and health systems. Though they are strong (and stronger than ours), they have many problems of their own.

The two issues which have not been adequately addressed in this debate over health reform are

1. Scholarships for medical school
2. Tort reform

Doctors are more expensive because few can afford the crushing costs of a multi-hundred thousand dollar medical education. Eliminate this barrier, you widen the pool of doctors and create more and cheaper options for consumers. Free them from the burdens of protecting against frivolous lawsuits (but not legitimate ones), and you are left with a larger pool of doctors who can get more out of their slightly smaller paychecks.