Before you can fix a problem, you gotta understand it. The problem in this series is the cost of healthcare in the US: 16.4% of US GDP in 2013, compared with an OECD average of 8.9%. Healthcare insurance premiums are also projected to go up 22% in 2017. I’ve been focusing on four areas that seem to account for a big chunk of US healthcare spending: hospital services, salaries, diagnostic tests, and medical interventions. This post will address salaries.
In short: healthcare professionals are paid more in the US than in other developed countries. Usually a lot more. In this post I’ll focus on two of the highest paid healthcare occupations: physicians and nurses. First, physicians:
Source: Congressional Research Service (CRS) analysis of Remuneration of Health Professions, Organization for Economic Co-operation and Development (OECD) Health Data 2006, October 2006.
Yes, specialists get paid more in The Netherlands and Australia, but the healthcare systems in those countries use GPs as gatekeepers, meaning to see a specialist, your GP has to refer you to one. Gatekeeping is an important cost-containment measure, since specialists tend to over-test and over-treat and are paid a lot more than GPs (not counting Denmark). Gatekeeping is not nearly as widespread in the US. As a result, the US has too many specialists and too few general practitioners, with all the added expense that entails.*
Now, let’s look at a comparison of nurse compensation across the OECD:
You get the picture: US doctors and nurses are paid very well compared to other developed countries. The cost of their compensation is an important factor in out-of-control healthcare spending in the US.
Next: Diagnostic tests and medical interventions
* Plus specialty-dominated healthcare “leads to inadequate preventive health services, late detection of diseases, and difficulty managing common chronic conditions such as obesity, diabetes, hypertension, and heart disease.” Allen Frances