Parija Kavilanz recently published an article on CNN called Doctors Going Broke. The article itself was pretty good, focusing more on issues running private practices than the physicians' personal finances. I review it here. The real revelation in the article, however, is found down below in the comments. I'd like to respond to a few of the themes notable in the comments.
Doctors Don't Pocket The Bill You See
Last time I was at a doctor the bill was $125.00 for 5 minutes. When my husband saw an oncologist it was over $200.00 for 10 minutes. A chemo treatment is over $2500.00. And you're telling me doctors aren't making money? Sorry, if they aren't it's their own fault. No sympathy here when they make in 5 minutes what I make in an entire day.
A few misconceptions here. First, just because the doctor was only in the room with you for 5 minutes doesn't mean he only spent five minutes on your care. For example, in the emergency department for every 10 minutes I spend with the patient I spend 10 more doing paperwork and another 10 interacting with the lab, x-ray, or a consulting physician.
Second, charges are very different from payments. Due to our dysfunctional insurance system, it is not uncommon to receive only 40% of our charges from an insurance company. Government payors such as Medicare may pay far less. For instance, Medicare pays us about 20% of charges and Medicaid pays 10%. And about 15% of people don't pay us at all.
Third, these payments are business revenue, not physician salaries. The physician must pay the rent, the utilities, insurance, employee's salaries and benefits, pay for capital expenditures, pay the accountant, coder, and biller etc. What he gets is what is left after all that. If the practice makes $1 Million in revenue, and he has $700,000 in expenses, then his salary is $300,000. If revenue goes down 20%, his salary goes down by 2/3rds.
Doctors Don't Have Money Coming Out Of Their Ears
All of the doctors I see don't drive anything less than a new Mercedes, so they all can't be suffering as much as their patients.
Oh right, well maybe some of them should move out of their McMansions and get a home like most Americans can afford. I am making $100,000 a year less than I was a year ago when I was making $500k I am going broke boo hoo.
Poor little doctors having to live off 1 instead of 2, 5, or 10 million per year. Your greed caught up with you and now it is time to pay the price!
[Canadian doctors] make a respectable living, though they likely don't pull in the millions that some American doctors do.
I drive a $4000 Durango. My last car was a 9 year old Mazda 626. Now you know one. If the goal was for everyone to suffer equally we could put Kim Jong Il in charge. This particular commenter makes a mistake that even many doctors make, that you are what you drive. Anyone who drives a Mercedes MUST be rich, no? The average physician makes $200K, not $500K. With an average medical school debt of $156K (and rapidly rising), and high marginal tax rates, $200K doesn't go nearly as far as many Americans think, especially when you consider that private physicians have to pay for all their own benefits, including retirement. Most doctors aren't part of the reviled 1%. They just don't make enough money.
There Is More To Healthcare Than Doctors
Doctors are overpaid, they manufacture prices for services out of thin air (had an MRI that they actually had the balls to bill for $10K–I asked the doctor how he slept at night, he admitted it was ridiculous but said he could get away with it), and there are simply too many of hem. If it takes the doctors going broke (like the rest of the world) to illuminate the myriad problems with the healthcare industry, I say THANK GOD.
Doctors in America are highly overpaid. In most other countries they just make a middle class wage. In America there are many millionaire doctors.
The radiologist's portion of this bill is likely ~$200. From that, he needs to pay his overhead and might be left with half of it. Where does most of the money go? To the hospital that owns the MRI and who employees the technician who performed it. There are approximately 954,000 doctors in the US. At $200,000 a piece, that comes out to about $191 Billion dollars. The cost of health care in the US is about $2.5 Trillion. So doctors' salaries compose about 7.6% of total. Our health care crisis can hardly be blamed on high physician salaries. Look to insurance companies, hospitals, pharmaceutical companies, and bureaucracy if you want somewhere to place the blame.
Many Doctors Run Their Business Poorly, and Do The Same With Their Personal Finances
The only way docotors are going broke is if they spent their money stupidly. Doctors make alot of money much more than the average person. I will be so bold as to guarantee that most doctors are millionaires (unless they jsut squander their money like some broke hollywood celebrities.)
They have the potential to cure cancer… but can't balance a check book?
Sadly, I have to agree (somewhat) with these statements. While most doctors are NOT millionaires, they should be (eventually). The reason they're not is that they squander their money like “some broke Hollywood celebrities.” Hopefully this website can help with that.
A more important lesson for doctors is this- Perception is more important than reality. The general public assumes you are rich and does not care about your ability to generate a good income, or even keep your doors open. Many people fail to see the connection between reimbursement and access to care. The long-term trend for your income is not reassuring. Run your business as best you can and live off much less than you earn so you can get through the rainy days ahead. Make hay while the sun shines. There may come a time when your income will be only $50-100K (or the equivalent.) Make plans now for what you will do in that scenario. Hopefully you'll never need them, but you never know.