The ‘filthy rich doctors’ explanation for high U.S. health care costs

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One Fred Jones, in the comments to an earlier post on health care, makes the following claim:

The real problem is not insurance, or lack of it, but the skyrocketing costs of the underlying healthcare itself. Why isn’t young Klein concerned with why doctors are pretty much guaranteed to become millionaires in the US and why they are allowed to self-refer patients to facilities that they have equity positions in, all at the expense of the insurance companies??

This reminded me of something Tyler Cowen wrote a while back about the French health care system, which is currently very much in vogue among liberal American health-policy wonks:

As of 2003, the average income of a French physician was estimated at $55,000; in the U.S. the comparable number was $194,000.

A visit to a GP’s office (half of the doctors in France are GPs) had a reimbursement capped at 20 Euros, again circa 2003. It is not hard to pay ten times that amount in the U.S.

Did I mention that health care is a labor-intensive industry?

This is the major reason why French health care is cheaper than U.S. health care. France also spends less per unit on other inputs, such as prescription drugs.

Somehow I don’t think this explanation is going to get the AMA’s endorsement.

Update: Okay, so it isn’t quite the AMA, but here’s what an anonymous commenter at Kevin, M.D. Medical Weblog (thanks for the link, Kevin!) had to say:

The U.S. is not France. We don’t have a French school system, a French university system, a French legal system, a French culture. Picking some figure–and an altogether not-too-believable one at that– and saying that is somehow a reasonable alternative to what we compensate doctors for in the U.S. is just ludicrous. It would never ever work. That Time even gives this kind of stuff print inches is a sad testament to how cynical that magazine has become and how stupid and gullible they must think their subscribers have become.

I more or less agree with the first part, and would add that we also don’t have places where you can purchase wine in bulk using something that looks very much like a gasoline pump (I’ve seen this done in Burgundy). As for the “sad testament” of giving “this kind of stuff print inches,” is it really so hard to tell that this thing I’m writing here is a blog? B-L-O-G. No trees or paid subscriptions involved. Also, I’m not saying U.S. doctors’ incomes should average $55,000 (neither was Tyler Cowen, by the way; I’m not so sure about Fred Jones). I just thought this would make for an interesting discussion topic. And it has.

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