https://mailchi.mp/27e58978fc54/the-weekly-gist-august-11-2023?e=d1e747d2d8

A recent National Bureau of Economic Research (NBER) working paper analyzed the individual income tax records of 965,000 US physicians between 2005 through 2017 to provide a comprehensive look at physician earnings. As doctors’ incomes are often a combination of wage and business income, earnings are commonly underestimated in survey data. Researchers found that the average physician earned $350K per year, which rose to $405K annually during the prime earning years of ages 40-55. However, researchers found a large gap between the lowest and highest earners: the top ten percent of physicians in that age band averaged $1.3M per year, with those in the top one percent averaging over $4M (and 85 percent of that income coming from business income or capital gains versus wages).  

The Gist: Many policymakers long believed that increasing the number physicians nationally would drive higher medical spending, and worked to constrain supply by freezing funding for residencies in the late 1990s, a move that has yet to be fully unwound. Recent research, however, has found that the impact of physician supply on excess treatment is small or nonexistent.

Meanwhile, the imbalance in supply and demand has led to relatively high prices for physician labor. Compared to other western countries, the US has far fewer physicians per capita, and we pay our doctors significantly more.

Case in point:

Germany has 69 percent more physicians per capita, and American doctors are paid roughly 50 percent more than their German counterparts.