Salaries For US Physicians Contribute To High Health Spending

Armen Hareyan's picture

Salaries for U.S. physicians are two to three times higher than salaries for physicians in other industrialized nations.

Many health care economists maintain that the"partisan fight" over whether to "force cuts in prescription drugprices and insurance company profits" to expand health insurance tomore U.S. residents is a "distraction from a bigger problem: therelatively high salaries paid to American doctors, and even moreimportantly, the way they are compensated," the New York Times reports. Salaries for U.S. physicians are two to three times higherthan salaries for physicians in other industrialized nations. Accordingto surveys conducted by medical practice management groups, U.S.physicians on average have annual salaries of $200,000 to $300,000, andspecialists on average have annual salaries of more than $400,000.Physicians in Europe in 2002 on average had annual salaries of $60,000to $120,000, according to a survey conducted in 2004 by the Britishgovernment.


In addition, most U.S. physicians "are paidpiecemeal, for each test or procedure they perform, rather than a flatsalary," which provides them with "financial incentives to performprocedures that further drive up overall health care spending," the Timesreports. Physicians also receive limited reimbursements for preventivecare and "cognitive services," such as research into alternativetreatments or advice provided to patients that does not involve medicaltreatment.

Alan Garber, a practicing internist and the director of the Center for Health Policyat Stanford University, recommends that U.S. physicians receive flatannual salaries, as well as bonuses based on the health of theirpatients. Peter Bach, a pulmonary physician at Memorial Sloan-Kettering Cancer Center and a former senior adviser to CMS,said, "I don't have a view on whether doctors take home too much moneyor not enough money. The problem is the way they earn their money"(Berenson, New York Times, 7/29).



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