Should US Doctors Take Pay Cuts?

It is now almost a sure thing that medical insurance coverage will be one of the major campaign issues during the US elections. Most of the candidates that have looked at it carefully are obviously aware that it is much more than dedicating more money to the problem. The uncontested fact is that the US spends a higher proportion of its GDP on medical care than any appropriate comparator within the OECD. In spite of this total expenditure, in certain respects the degree of medical coverage does not match.

Various reasons are readily given for this state of affairs and these include the fact that the design favours insurance corporations which are motivated to exclude many ill people on the one hand and the high prices of prescriptions drugs on the other. One factor that has not been mentioned very little has been the compensation for US medics. Alex Berenson's article in the New York Times argues with data that the compensation of US medics is at least double that of their colleagues in other high-income nations.

Even taking into account the fact that the compensation figures cited are probably based on conversions of prevailing exchange rates, it is likely that they would still be substantially higher were they to be adjusted by Purchasing Power Parity (PPP). I am at a loss as to why Us surgeons and other medical practitioners seem to exercise this degree of market power especially as medical skills are largely transferable across nations. the article states that the way in which compensation is structured moves doctors to recommend expensive procedures that may have cheaper alternatives and this suggests that US patients may be over-medicated already. One would have to look at the regulation of entry into the medical profession as I would expect that to moderate the upward crawl of wages. It appears instead to be distorting it towards the higher paid specializations.