Define cheaper. If you mean cheaper per person or something like that, yes. If you mean that we would spend less on healthcare if we went to a universal health care system -- well, link please. Note that one of the arguments about American health care is that doctors make too much money. Fine. We'll get to that in a bit. But when people bake an assumption about doctors' salaries into the model, it's not sound methodology. You can't say, "if we had universal healthcare, we'd spend less overall because doctors would make less money in my system." That's changing a parameter.
There are two major problems with the idea that "doctors make too much money and we could reduce health care costs by reducing doctors' pay":
1. Education in the US is so expensive for would-be doctors. I dated an Austrian woman for a while, who was 25 or 26 and already had her MD, and had been doing research in the states for a year or so when I met her. So, was she some sort of genius? Not really. It's just that you can study medicine as an undergrad in Austria. I don't know if that's true everywhere in Europe, but it is in some other countries as well. And in most places, undergrad is subsidized to a cost not unlike UNC in the 1980s or 1990s.
So she had zero debt coming out of med school. Again, not because she was super-brilliant or had earned scholarships or anything of the sort. She just lived in a system that made her education inexpensive.
Compare to physicians in the U.S., who have to complete a four year degree to the tune of 100K+ or more, and then pay $200K for medical school. My wife is a psychiatrist and she was still paying off her med school loans after age 50. In fact, she never finished paying them off; she benefited from Biden's first loan forgiveness program (which was styled as a "fix" to an error in the income based repayment program but was really a forgiveness). She would not have been able to make ends meet with a $150K salary, and she's not a big spender.
If we want doctors' salaries to go down, then we have to fix the education costs. Ain't nobody going to pay for an undergrad degree, then a med school degree, then do a residency, only for the opportunity to make $120K after all that. We really should consider whether an undergrad degree is necessary, or if universities can offer hybrid programs that do undergrad and medical at the same time. A 6 year plan, instead of 8. This is definitely true for law school, which does not need undergrad in any way and is probably too long in its own right. Law could easily be a 5 year undergrad major.
2. There's also the Baumol effect. I've mentioned it elsewhere, but I'll recap. Jobs requiring roughly equal skill will end up with roughly equal compensation. It doesn't have to be the same, but roughly equal. Otherwise, nobody goes into the lower compensation field, and then there are shortages, and that causes prices in that field to rise. I've seen it with psychiatry. My wife's compensation has gone way up in the last 6 or 6 years, because for years and years psychiatrists were paid much less than other physicians. They were paid especially less well than dermatologists and cosmetic surgeons, which has always bugged the hell out of me. Well, anyway, med school grads weren't going into psychiatry, so there are shortages everywhere, and now psychiatrists make more. Not because their productivity has increased, but because competitor fields have.
This is true within the medical field, and just as true (or perhaps more) when comparing with other professions. Even with today's salaries, a lot of doctors feel as though they are underpaid, which is why they leave the profession and go into business. Private equity has been investing heavily in medicine, and there are always doctors as CEOs or top execs in these firms. Doctors can make more money going into pharma, or as professional expert witnesses, etc.
And while there's not a lot of doctors who take up law, that is absolutely a choice that many people make when they are young. If you want to be wealthy or even borderline wealthy, law is a much better choice than medicine. It's not even close. Keep in mind that med school admission is more selective than law school admissions for a number of reasons. So we can't compare the salaries of lawyers from Tier 4 schools to doctor salaries. Anyone who can get into med school would be able to get into a Tier 2 law school at a minimum, and probably Tier 1. And in that cohort, law definitely pays really well.
So, ironically, it's hard to lower doctor salaries if we don't lower lawyer salaries. If we wanted to reduce health care costs, one way to do it would be to eliminate income taxes for doctors, while decreasing reimbursements that they receive. Basically, pay them $150K a year instead of $300K a year, but the $150K is tax-free and so that helps equalize.
3. Unless we fix our doctor compensation issues, we aren't going to make a huge dent in our medical costs. There are plenty of other costs in the system, but doctor compensation is a huge reason why health care is more expensive than in Europe.
When I was much younger, I used to disregard this effect. Oh no, I would think, a doctor has to make do with a $200K salary instead of $300K -- how will they ever survive? That's true on an individual level for sure. My family would have been just fine if my father the surgeon had make 75% of what he actually made. But as a public policy matter, asking doctors to just eat lower pay is a bad solution. It won't work.
www.ncbi.nlm.nih.gov
