Citing an OECD study, Yglesias notes:
…America has the highest-paid general practitioners in the world.
Why is this? Presumably American MDs are great at using credentialism to restrict the supply of labor, but there’s another possible reason that deserves your attention.
Really, a combination of two reasons: Higher
productivity inequality in the U.S. plus the Law of One Price (LOOP). As another OECD study
The United States is the country with the highest inequality level…across the OECD, Mexico and Turkey excepted.
In this brief space let me take it for granted that in the U.S., smart people can become pharmaceutical researchers or Wall Street quants or corporate attorneys and
earn produce much, much more than they could in Western Europe. If a sharp, disciplined U.S. worker can expect to earn, say, $400K per year by middle age in one of these fields, the LOOP says that a person would have to expect to earn about the same amount as an MD. For instance, If MDing earned a lot less than pharma research, workers would shift over to pharma until wages (including the value of perks) were equalized across the two lines of work. So the wages of MDs are pinned down by the wages of comparable workers in other fields. Pushing down MD incomes means a big exit from MDing.
Yglesias anticipates this objection to an extent, noting that we can get by with fewer MDs:
What’s more, in the 18 states where lesser-paid nurse practitioners are allowed to do primary care without a doctor’s supervision, their treatment is just as good in terms of health outcomes and better in terms of patient satisfaction.
This of course is the long term plan according to some of ACA’s architects: “The doctor will see you now” is destined to become an antiquarian expression–instead you should practice saying “The medical care provider will see you now.” Perhaps little will be lost at the general practitioner level given the wastefully Hansonian nature of medicine; it looks like we’ll get to find out.
But my core prediction is a simple, testable one: As long as America has the highest income inequality in the world, as long as highly skilled, detail-oriented, disciplined workers earn vastly more in the U.S. than in the rest of the OECD, America will face a grimmer, crueler tradeoff between doctor wages and doctor quality compared to our friends on the other side of the Atlantic. The tradeoff will show up in some combination of quantity and quality: fewer doctors and more “doctors” as wages and payments to medical providers are cut over time.
The best hope for those who want the best possible American doctors in the future? Lower wages on Wall Street.