Posted by: erichosemann | August 17, 2011

Doctor Compensation–By Whom?

I started this post way back in October of 2009:

Every once in a while, I’ll listen to NPR’s Marketplace Morning Report on the way in to work.

They have a cute little feature called “The Marketplace Globalist Quiz.” Today’s question? How much do American doctors make compared to doctors in other wealthy countries?

Take a listen.

The segment begins at about 4 minutes 18 seconds into the broadcast.

This playful little discussion is confused, and the context of the quiz is misleading. The federal government spends a lot on health care. If you buy into the entirely plausible idea that the consumer determines the structure of production, then the federal government plays a role in determining doctor compensation proportional to the amount it spends on health care. The quizzer and quizzee should offer some caveats about health care budgets in “countries like Switzerland and France.” Perhaps they spend less than the U.S. government, perhaps more. There are assuredly more variables involved, but a cutesy little quiz comparing doctor compensation is the furthest thing from prima facie evidence that U.S. doctors are over—or under—paid.

When the consumer alone determines the structure of production, the consumer gets what he wants: iPods, Bluetooth devices, inexpensive footwear of high quality, hi-definition television and year-round supplies of cheap fruits and vegetables. When the government determines the structure of production, it gets what it wants, too. Only what government “wants” is much different from what consumers want, since governments can’t “want” anything, only people can. Government’s “wants,” in our case, are supposed to be what people want as expressed through the democratic system. What else do we get when government “wants” something? Three—make that four—wars. TSA groping. Bailouts. QE1, QE2 and possibly QE3. (There’s a federal register’s worth of more, but you get my point.) In short, doctor compensation is not purely the result of consumer demand. If it was, perhaps it would be lower, perhaps higher. Certainly it would more accurately reflect consumer desire for health care across a range of available goods.

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