You know when you hire that contractor and they quote an hourly price of $85 an hour, outrageous isn’t it not – especially when you make $35 and hour ($72,800).
Well no, it isn’t.
The erroneous perception is that the contractor puts the $85 in his or her pocket which is not accurate.
That self-employed contractor has to pay the bills too like several forms of insurance, double Social Security taxes, license fees, bookkeeping, a vehicle and equipment costs, fuel, and more.
Individuals who work for corporations pay half the SS taxes, and likely have an employee benefits package that adds 30% or more to their compensation – generally tax free and pay no part of the operational costs associated with their job.
Bottom line, that $85 is a lot less in terms of equivalent wages to the worker and most of us would not take the risk of no work, no pay on any given day and no paid vacation.
Now I bet you never thought about this in terms of health care because we have been condition to think that all of health care is a lucrative deal.
Consider this perspective from a physician.
“Health care costs are rising every year, and I recognize that health care costs are significant and a challenge for many families,” Dr. Scott said. “One of the myths is that physicians, who are the face of the health care encounter, collect all those charges themselves when, in fact, they are often only a small part of that health care spend.”
“Most patients would be surprised to learn that physician pay is actually less than 10% of the total health care expenditure. Yet many times it’s the physician who the patient sees as the cost factor in health care,” he noted. “Take my practice, for example. If I perform a tonsillectomy, the bill will be for thousands of dollars and yet my practice receives about $300 for performing that surgical procedure. And that includes 90 days of postoperative care.”
“Another myth is that that $300 goes directly into my pocket. No, out of that $300, I pay my rent, the salaries for my staff, the expenses for my medical equipment, all of which are going up every year,” Dr. Scott said. “And yet that $300 is actually less than my partner earned for the same tonsillectomy 25 years ago. It’s simply an unsustainable situation.”
AMA.org
QUINNSCOMMENTARY 
The model that is unsustainable is changing, at least in my experience. For example, I go to the dermatologist office twice per year because I’m old and the sun did a number on me over the years. I’ve seen a dermatologist twice in the past 7 years, in total less than 30 minutes. That includes the time spent removing a skin cancer on my scalp. The other visits are with a PA or NP. The office I go to now, I’ve never seen an MD. I suppose he is there but I can’t prove it. I get along fine. The same goes for the orthopedic office I went to for arthritis in my back. I see the PA and Physical Therapist. I get along fine. My last annual check up at the primary doc was with a NP. I get along fine.
My view is the model has changed, or is changing because the annual pay of a PA or NP is less than an MD.
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You clearly explained why comparing one’s own hourly wages with the hourly charge a contractor bills you for is apples and oranges. For many practices, like mine before I retired 6 years ago, overhead consumes about half of gross receipts. According to the Center for Medicare and Medicaid Services, about 20% of health care dollars flow to physicians. After they pay overhead, doctors on average keep about half that amount, or 10% of all health care dollars.
A comparison of mean and median physician total compensation for US-based versus international will generally show the US doctors at or near the top. I wonder whether such a comparison were made for other professions, like dentists, business executives, professors, CPAs, etc. wouldn’t show similar rankings. The range of total compensation even within each specialty in the US is quite large, owing to numerous factors, such as how many hours the doctor works each week, what the demographics of his or her practice may be, whether they are in solo-, small group, or a large practice, and many others.
My point is not to criticize nor defend what doctors make, but rather to put the matter into perspective. When looking at ways to reign in the cost of healthcare, it is useful to also consider where the other 90% of those healthcare dollars go.
We are inundated with all sorts of claims which are misleading, incomplete or just plain wrong. Such as: the “rich” don’t pay their fair share, corporations are greedy and evil, that billionaires achieved their success by ripping off their employees and customers, etc. You are performing a useful service when you pick any number of topics, and paint a more fair and accurate picture. We’d all be much better off if each citizen strived to learn the facts for himself, rather than depend on politicians, whether they be from your side or the opposition. Thanks for being a force in helping to provide these facts!
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Country Average doctor salary
Switzerland $388,623
United States $316,000
Canada $194,777
Germany $183,000
United Kingdom $138,000
Saudi Arabia $133,320
China $116,377
Japan $115,092
France $98,000
Italy $70,000
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There is more to it than just income, not all salaries either. Take out the highest paid specialists from US and look at the others.
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For example. In Germany, however, the vast majority of medical universities are tax-funded and, for this reason, free of tuition.
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I would be curious to know if these countries provide free medical school tuition or malpractice insurance. Also the average pay for physicians is very dependent on your specialty. Pediatricians often get paid less, while surgeons substantially more. And also how long you have been in practice affects your salary. Many doctors work very long hours for that pay
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Some do fund medical training. The highest paid doctors are typically radiologists and anesthesiologists.
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