Why are doctors so expensive?

Discussion in 'Business & Economics' started by Roman, Oct 28, 2008.

  1. Roman Banned Banned

    Healthcare is expensive. We all know that. But why is the only cheap alternative to going to the doctor's not going?

    Having recently had to spend some time in dr.'s offices recently, I've noticed that the cost of doctors are all about the same, yet quality seems to vary widely.

    Why is this? How, in a free market, can you have good doctors and bad doctors* charging the same amount of money?

    I've been told several things:
    1) The free market can't provide everythings, and so the government has to step in (which it is not)
    2) Med school is pricey
    3) Doctors need to spend a lot of money to make money (equipment, nice clothes, cars, big houses), so charge money
    4) Lawsuits drive up the price, since doctors need lots of malpractice insurance
    5) Almost 50% of money spent on healthcare is from the government, in the form of social security for old people, which makes healthcare that much more inefficient since providers are free of market effects
    6) Most people buy insurance inefficiently, since it's paid for by their job, and they don't make the best choices for themselves, rather that their employer makes the best choice in buying insurance in bulk for themselves. Higher insurance prices result, and with the inflated cost of healthcare to begin with, insurance provided by the employer becomes necessary for most jobs to attract employees.
    7) The licensing process isn't efficient- there's no room for cheap, crummy doctors.

    1) Is obviously wrong.
    2) Seems reasonable, but there are a lot of doctors out there, and a lot of med schools. How much is med school, opportunity costs included? This is surely a contributor to the cost.
    3) The cost of equipment and the like seems reasonable, though I'd think I could go to a dr.'s that hasn't thrown tens of thousands of dollars at new gadgets, and thus charges less. Related to 5, I think, in that doctors are overly cautious, and need to cover their bases with technology.
    4) This is most definitely a contributor, but then, dr.'s should also be responsible for sawing the wrong arm off or confusing their 1 oclock with their 3 oclock.
    5) Almost half is a huge amount. Old people going to the dr. for every ache and pain (Fraggle_Rocker is known to do this), when they aren't paying for it, is easy to do. Of course, this increases the price for me directly (increasing demand), and indirectly, through having to pay social security (that I won't benefit from now, and won't benefit from later, since it'll be dead). This seems it would be a huge contributor to cost.
    6) Likely a symptom of 5, since it doesn't seem reasonable for it to be occurring on its own if free market forces were operating, since it means everyone is behaving very inefficiently.
    7) I'd like to see regulation of doctor's passed off to the private sector, so I could do a little price discrimination, you know?

    Anyway, your (socialist) thoughts? Tell me how I'm wrong, and we need the government to take over everything.

    *I recognize that laymen like me most often judge a dr.'s ability based on his bedside manner.
  2. Nasor Valued Senior Member

    It's a pretty good list, but you left one major thing off; people who don't go to the doctor when they have minor problems, which go untreated and eventually turn into major problems that require expensive emergency treatment.
    You hear a lot of noise about, but there have been several studies that found that all the costs related to lawsuits (insurance, lawyers, etc) only accounts for about 3% to 5% of medical costs in the U.S. I don't have a link handy, but you can probably find them if you google around for it. The whole thing about malpractice suits driving up costs is mostly a scam. And of course, you could argue that the 3-5% increase is actually worth the cost if it means that the doctor is more careful because he knows he is facing a big lawsuit if he screws up badly.
    We've also regulated who can do what in medicine to the point where we're forced to see doctors for things that probably don't really require a doctor. A highly trained professional with 10+ years of advanced education could reasonably demand $150/hour for his time, but it's not clear that this is the sort of person I need to see when I have strep throat and just need some antibiotics.
  3. Roman Banned Banned

    If I have what I think is a minor problem, though, I really cannot afford the $75 dollar bill, and missing work. If screening was cheaper, I'd do it more often.

    I do hear a lot of grousing, but it's reassuring to hear that the numbers are so low. I don't really like the idea of removing a professional's responsibility for causing some really terrible damage. Do you know what the upper end on that range is, though? I'm sure there are studies that show that it's a much higher cost.

    Prescriptions are also very expensive, given that the doc sees you for 15 minutes and scribbles on a piece of paper.
  4. Dr Lou Natic Unnecessary Surgeon Registered Senior Member

    Somewhere along the line it just got decided doctors should be really rich (I always figured it was completely at random), and no doctors have betrayed the others by starting a competitive pricing war.

    Also most people don't go to doctors enough to get a feel for the good and the bad and noticabley favour the good ones, which would force the bad ones to be cheap (not to mention the fact most visits to the doctor won't expose them as bad- anyone could sit there and go "yep... oh ok, hmmm, sounds like you have the flu, take it easy").

    Dominoes pizza succeeds on a similar basis, people get pizza a lot, but not really, it's like "hey let's get PIZZA!" and everyone's like "haha, yeah! Pizza! How zany?!" and then they just order pizza from the first place they can find the phone number too, dominoes constantly puts brochures and vouchers in everyone's letter box so most people can find their number after a quick scrounge through the kitchen. The fact dominoes is consistently hellishly awful, with bad ingredients sparsely splattered over a disgustingly unpleasant crust all grossly over or under cooked, doesn't matter. The people who buy it will just be like "this pizza isn't very good" but then forget by the time they order a pizza again.
    You can see how this is exactly like doctors, only not really.
  5. Roman Banned Banned

    But that's just it. I can buy cheap, crummy take out, or some really fancy Californian shit. With doctors, I'm still paying premiums for "yep... oh ok, hmmm, sounds like you have the flu, take it easy".
  6. Dr Lou Natic Unnecessary Surgeon Registered Senior Member

    Yeah, the fact dominoes is cheap almost ruins the analogy.
    But, it's no cheaper than pizza hut, which (while not great) is way better.
    Dominoes still competes with pizza hut, because there will always be people saying "hey! let's get pizza!" with no knowledge of how bad dominoes is compared to pizza hut due to how rarely they get pizza.
    I know what you're saying though, with food you can choose between cheap shitty pizza, and really good expensive food. I guess doctors can't be compared to the generalised category of "food", as a group they can only be compared to the specific category "shitty pizza". Like shitty pizza they're, for the most part, only called up on special occassions. Across the population those special occassions are frequent, but individually they aren't. So shitty doctors can compete with good doctors, because the bad doctors will always have new people calling them with a sore toe or whatever who have no idea they are bad doctors.

    There needs to be a doctor review database on the internet, that everyone knows about and uses. Then you would start to see good doctors being in higher demand and thus able to charge more while shoddy hungry for work doctors would have to charge less, and you could choose to go to them when you had to get a prescription for something not too serious.
  7. S.A.M. uniquely dreadful Valued Senior Member

    You could always outsource medical care and do it through call centers. "Hello, I yam docdor Bobbie, houw cain aye helb you?" :D
  8. Roman Banned Banned

    I hear many cases of Indian doctors immigrating, but failing to pass their licensing thingies. It'd be great if I could go see them, and pay less. I mean, physical therapy is physical therapy right? Besides, you eastern types know all sorts of hoodoo magics to ease pain with your opiates and acupuncture.
  9. cosmictraveler Be kind to yourself always. Valued Senior Member

    Their wives are always out at the mall shopping for stuff!;)
  10. joepistole Ordo Ad Chao Valued Senior Member

    Roman your observation is very astute. The reason physicians charge the same and there is no rating system or scale for physicians is because the American Medical Association have been and continues to exercise a huge influence over state and federal governments. Their abiltiy to buy "access" in state and federal government has allowed them to control the supply of physicians. This is why physicians act like and in deed are a oligopoly.

    As you point out there is no valid reason that physicians are needed for every incident, every illnes or injury. I was a corpsman in the United States Navy. It was part of our job to diagnose; prescribe drugs and do minor surgery...all things that only a physican can do in civilian practice. And we did it with a fraction of the training.

    In the United States access to medical training is severely curtailed by the influence of physicians on federal and state governments. And of course state governments define what physicians and other professions can and cannot do. Physician training in The United States is excessively long compared to physician training in any other country in the world...at least an extra two years (and that trainng is not medical related).

    So by using government to restrict the supply of physicians and errect barriers to competition, the government has created an oligopoly for physicians which allow them to demand and receive extrodinary incomes.

    ** By the way it has been my experience that Indian trained physicians are the best.
  11. John99 Banned Banned

    Post deleted by John.
    Last edited: Oct 29, 2008
  12. joepistole Ordo Ad Chao Valued Senior Member

    Here is more information on The American Medical Association:


    They have historically opposed socialized medicine fearing it would adversely affect physician incomes. They have also been convicted of violating the Anti-Trust Act. They have done well for physicans but not so much for patients.
  13. Dr Lou Natic Unnecessary Surgeon Registered Senior Member

    Well that's a peculiarity. They're infamous globally for being the worst, and it's because they're forced to go through med school by their parents despite no real passion or genuine talent for the practice. They are able to study extremely hard and pass even when they aren't particularly intelligent, and then they spend their career resenting the fact they have to take care of humans (which they consider unclean).

    I'd rather a negro doctor, you know that guy had to REALLY want to be a doctor and had to have an exceptional talent for it.
  14. joepistole Ordo Ad Chao Valued Senior Member

    I think I detect a thread of racism. I work with Indians and have found them to be very talented and a good and kind people. Nobody is forced through schools in India. Getting into a government school is very competitve and based on skills and abilities. Those who do not qualify for public schools go to private schools.

    Two, a few years ago I experienced a pulmonary thrombosis up close. The lay translation, is I had blood clots in the lungs...a life threatening condition. I was taken to the emergency room and treated by American trained physicians and they failed to correctly diagnose my condition. As I lay in the bed listening to the exagerated and contorted explanations they were coming up with to explain my condition, I was just dumbfounded. I could not believe people with so much education could come up with this crap. And to make maters worse this was a trainning hospital. A hospital trainning physicans, and a trauma center.

    At any rate it was not until 24 hours later that an Indian trainned physican correctly diagnosed my condition and began treatment. There for a while I thought I was going to have to call an ambulance to rescue me from the hospital. It was a very scary experience. And a pulmonary thrombosis is not hard to diagnose. It is not an uncommon condition...but a life threatening one.
  15. John99 Banned Banned

    I think i detect senility.
  16. joepistole Ordo Ad Chao Valued Senior Member

    John if you had a brain you would be dangerous. Thank God you don't have a brain!
  17. John99 Banned Banned

    There is nothing wrong with being senile. It is part of life so it is not like i was insulting you.
  18. joepistole Ordo Ad Chao Valued Senior Member

    How can one be insulted by a Troll? How can one be insulted by someone who makes stupid posts and then subsequently realizes how stupid their post was and goes back and deletes their posts? How can some be insulted by someone who does not even understand the meaning of the words they use?

    How can one be insulted by someone who responds to questions like this:


    So how could I possibly be offended by you or anything you have or will write in the future? For you just keying in a few words is an effort. I pitty you, because you do not even understand the meaning of the words you use.
  19. John99 Banned Banned

    I delete quite a few posts. Never because they are stupid. That particular post in this thread answered a stupid question quite succinctly but i deleted because it may have hurt another members feelings. Some of my best posts i delete because they are too profound or cut too close to the bone.
  20. joepistole Ordo Ad Chao Valued Senior Member

    Yeah John, I read the post before you deleted it. It was hardly profound with 99 percent of the words miss spelled. And we can all see you compunction for not offending others. You must think we are all koolaide drinking Republicans. One would have to be in order to believe your crap.

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