Why You’ll Never Get Rich In Medicine
Let’s assume that you’re a partner in a practice or an emergency medicine doc or a hospitalist somewhere. Let’s also assume that I own a pencil manufacturing plant. We’re also assuming that this is a scenario to illustrate a point. Thanks for playing along…
I get an order for 100,000 pencils. I fulfill the order and profit. I leverage my employees to create pencils for me and fill the order. If I need extra help for the order, I hire it.
You get an order for 100,000 patients.
You can only feasibly see 50 patients per day, so you tell approximately 99,550 patients to go elsewhere. You can’t hire extra help to see the patients because the extra help eats all of your bottom-line profit.
The Service Business
My point is that medicine is a service business. You can only do so much yourself when you’re serving others. If you want to progress beyond a certain income level, you’ll need to figure out a way to duplicate yourself. We can’t duplicate ourselves, so game over. Service businesses lend themselves to income caps. Income caps don’t play nicely with large (very large) incomes.
In other words, if you want to get rich, you need to get out of the service business. Which means, getting out of medicine. Sure, medicine will give you an incredibly “comfortable” life. I got tired of watching my parents be “comfortable” and decided to change. Will you?
There’s nothing wrong with banking a couple hundred thousand per year in medicine and living comfortably. But, you’ll never be rich so get used to that now. People all around you are making 5 times your income and working less than half of the time of your favorite attending. It may not seem like that or that cut and dry, but just trust me when I say that it’s true.
It’s all about passive income, and medicine alone doesn’t afford a passive income. You’ll always need to see patients or sign out a case to get paid.
And, that’s not the way to live. In my opinion, anyway.
Discuss.
For some people, several hundred thousand a year is rich enough for them. It’s all a matter of perspective, but you’re right.
Don’t do medicine if you want to make big money.
I don’t think the problem is that medicine is a services business. After all, investment banking and management consulting are also services businesses and people make A LOT of money in them. Services business can be very profitable. However, there is an issue of leverage. Most highly profitable services businesses can leverage the blood sweat and tears of associates who get paid pretty well but not the 7 figures you are alluding to, or that the partners in these firms earn. Where is the leverage in Medicine? It’s in the residents and interns none of whom physicians can actually leverage in any meaningful way because of the training structures in place.
But if you are a physician that owns and runs a large multidiciplinary group, my guess is you can make a lot of money if you run the business well as you are leverage the work of all the physicians under you. But there certainly aren’t that many opporunities to do so, and that kind of business thinking and risk taking is not found that often in physicians at the moment (IMO).
But the leverage will always be a problem.
Also, I think pretty much every one knows MDs don’t earn that much vs what other educated people can earn in business/finance. Anyone who wants to be an MD because of the money alone is a fool.
Just to play devil’s advocate: Another pencil manufacturer opens up across the street and offers a more competitive price than you do. Then, many national exams go to computer-based testing, meaning less need for pencils. Classrooms from grade school on up go to more computer based format, not to mention offices going to more computer based communication and less “paper and pencil”.
Next, China starts a pencil company operating at much lower costs due to their labor costs being much less. Now you have a market on the decline, many competitors. Forced to liquidate, you now have a lot of pencil manufacturing equipment no one wants to buy and very little cash, as you burned through most of it in an effort to advertise and keep your business afloat through the slower months. You go out seeking a new job, as you still haven’t paid off your loan from when you started the pencil company. You have no other skills, other than knowing the pencil manufacturing business which has just bottomed out. You would like an executive position, but your CV isn’t looking so stellar and you are your one and only reference since you were the boss of your own company, which just failed.
Meanwhile, your high school buddy started mowing lawns when he was 15. When he was 18 he was up to 30 lawns, expanding to offer more extensive landscaping services, hiring many other people, and watching his business grow—because services like mowing lawns are always necessary even when pencils become irrelevant.
“People all around you are making 5 times your income and working less than half of the time of your favorite attending”
If you are a physician making in the 250K range, which puts you in the top 2-3% of all income earners in the U.S. if I’m not mistaken, how exactly is EVERYONE around you making more than you are???
And if you DO make 250K for twenty years, that’s five million dollars in lifetime earnings. In only 20 years. Not a bad chunk of change by the age of 50. Let’s just say you invested 20% of your income from day one. After 20 years and with interest on your investments, even in a money market account at 4% rate of return you should have 1.5 million or more (not an accountant and too lazy to calculate this but it seems reasonable). 1.5 million dollars, even if invested in a 4% money market (which wouldn’t be wise) would give you $60,000 annually in interest. So at that stage in the game, you could cut back to part time work, put in 20 hours a week until you’re sixty, and use the interest your money is earning when necessary.
The only reason most physicians, at least those in fields with good income, work so hard and for so many years is because they try to live like millionaires instead of being sensible.
Financial stability is actually one of the most attractive aspects of medicine, if you’re considering finances. Even though successful entrepreneurs can earn far more than any physician could, a staggering percentage of small businesses fail. So, unless you’re one of the few blessed ones whose business actually takes off, you won’t be living lavishly and you’ll certainly have no financial stability.
However, if you’re one of those guys whose sole dream is to own yachts and private jets, unfortunately, medicine won’t get you there. When you get into that realm, luck will inevitably play a large role in your success. And if you can stomach the idea that you can go bankrupt any day, then by all means, go for it. I think this was Hoover’s entire point.
From a few older lawyers I know in town, they joke that they don’t know any doctors who practice medicine. They’re all realtors. They’ve parlayed their medical income into more passive income ventures.
This may be oversimplified, but I figure if you’re making $250K a year, you can probably pull $50K out as investment money and not drastically impact your standard of living. If you’re making $50K per year, you don’t have that luxury.
There is some leverage possible in a medical practice, but it’s at most 2:1. A specialist can have non-MD’s, such as NP’s, do things like see patients, but there are many activities that can’t be done by others. Usally the key activity in a specialty (EGD/colonoscopy for a GI doc, cardiac cath for cardiologist, reading sleep studies in my case) can only be done by the specialist himself.
Although a businessman can use leverage to vastly increase his profits, there is a danger to too much leverage, as we have seen with the current financial crisis. No matter what corporate structure you choose for your business, at the beginning you will need to personally sign for any borrowed sum.
As others have noted, medicine offers a relatively stable income, while in other businesses there is much higher profit potential,but also more risk.
Michael Rack, MD
http://rebeldoctor.blogspot.com/
http://sleepdoctor.blogspot.com/
Medicine itself can be used as leverage for other ventures.
To make attending money generally takes about nine years from the start of medical school to the last day of residency. Those years are overworked slavery. However, the money one makes as an attending is virtually guaranteed, with amount differing depending on the field one is in.
Most people need to take out loans and find investors to start up a business. Unfortunately, loans accrue interest, and investors take control of company direction and profits. On the other hand, the money earned as an attending is 100% profit with no lender to pay back. Given a few years as an attending, one can amass a hefty start-up sum of around one million dollars if he avoids primary care medicine and lives frugally. With this large amount of capital, one could start up a business easily from which to accumulate passive income. If the business fails, then there is always a job to find as an MD.
This route may not be for everyone because it involves a hellish amount of patience. But it is relatively risk-averse compared to striking out on one’s own without a medical degree and certification.
The way to get rich in the U.S. is to create and distribute intellectual property (e.g., movies, software, books, etc…). If you can’t do that, the way to get rich as a doctor is to own the building you practice out of, lease space to other physicians, and then hire other people to run your tests. There is a pulmonologist in my area who owns a radiology suite and hires radiologists, owns a sleep center where techs perform the bulk of the work, and runs a telemedicine center from his home to the hospital’s ICU. He boasts an annual income over $1 million.
Sanger: Not to flame, but your post shows a lack of thought.
Start with one word: loans. Don’t forget that even your MD-awesomeness, you’ll still have to pay those back. And like the business loans you reference, those will have accrued interest.
Once you’re making that fat attending cash and you’re ready to be all business-savvy, don’t forget that you’ve spent the last half of your life learning medicine … not business. Entering the equation simply as a “money bag” is how a lot of doctors lose their ass.
Actually Anon what Sanger says makes a lot of sense, just seems a tad bit exaggerated because it takes a long time to build up $1 million for capital to start any other business venture. Unless you’re a plastic surgeon, or a neurosurgeon, radiologist, maybe dermatologist, or if you live in a very small apartment and WAY beneath your means and go into any other field, coming up with a million will take a long time.
But you don’t need a million to start buying real estate to rent out, or invest in countless other things. Don’t need anywhere close.
Medical school loans are definitely a burden for us. Very frustrating to deal with. I borrowed a hefty sum of money and I’m already tired of paying on it. Got a long way to go. But the reality is, what I pay on my loans every month is about five hours worth of work for me in a given month. Put in that perspective, it’s not that bad. Got interest rates locked in at really good rates too.
Having an MD degree is a great thing to “fall back on” if you build enough money to start a business and choose to go that route. That being said, it would be foolish to go through all those years of training with the goal to start your own business, if that is not going to be a medically related business. And if you’re out of medicine for a few years, it would be hard to jump right back in and you’d be a little out of date and out of practice.
Best approach is to pick a field with a good lifestyle and decent/flexible hours, live beneath your means and save in your first few years out of training, then start to invest in a few things as a “hobby”, doing so with a little caution and a lot of research, still staying focused on medicine, not investing more than you can afford to lose or are willing to lose if things don’t go well….
The average salary is 40 grand a year where I live. So, for one to earn a couple hundred grand per year is considered rich, stable, and comfortable. Yes, people who start up businesses will make more money than doctors but some won’t. Medicine is a secure, honest and growing field. Business however is hit and miss. Sometimes playing dirty in business will get you far, Ex Conrad Black. I am not saying that people who invest their life into business are dirty over people who invest in medicine. When you hit a gross in business, most likely you’re going to gross more than a doctor and it’s probable they spent less time in school. But you’re right, medicine is a service business. But, you can make money in medicine. If one knows how to save money by the time they retire they can become millionaires. What doctors get 5 grand per month, put 500 in the bank when you are 28 and by the time you retire the he or she can be rich. And I think having a million is considered rich. So do you make money in medicine, sure. And depends what is considered “rich” to you right?
“And I think having a million is considered rich”
Making a million a year is considered rich. Having a million at retirement will barely fund a middle class lifestyle, especially since social security will no longer be present when most of us reading this blog retire.
Michael Rack,
Retiring with a million dollars is more than enough to support a middle class lifestyle, if you don’t include real estate assets. By the time you retire, you should have paid off the mortgage on your house. Without a mortgage to pay, a middle class couple can easily live off approximately $40k a year (assuming your life expectancy is 90). If you include investments (which is smart to do if you have $1 million) and the projected returns on these investments, a million dollar can sustain for even a longer period of time.
bronx 43: I agree, you can live a middle class lifestyle with a nest egg of 1 million. But it definitely isn’t rich. And there are plenty of retired persons right now whose investments aren’t doing to well.
Medicine is the career that comes closest to guaranteeing a top 5% income and the job stability beats anything out there.
As far as owning a business being the path to riches, the fact is that 9 out of 10 businesses fail. Just because a business “succeeds” doesn’t mean it’s making a ton of money.
As for Wall Street, that’s a very small world. Look how it’s doing these days.
Forget about being a CEO. The average med student has better chance of winning the lottery than becoming a Fortune 500 CEO.
It’s amazing how people these days have grown so incredibly obsessed with… money.
I was an economics major in college. Money is a known quantity to me. I could probably spend 99 pages in an arcane discussion of it.
But give me a break. People who go into medicine, or any field because of “money” are guaranteeing themselves a life of unhappiness. If money is really what your world revolves around, that’s a very sad world you have indeed!
Let me ask you this. What could you buy on a $500,000 salary that you couldn’t buy on a $150,000 salary??
More square footage in your house? Well that’s nice, but you’ll never use it unless you have 12 kids.
A slightly faster car? Awesome. But you’ll get tired of the Ferrari in 1-2 years, and they’re not made as solidly as an Acura that costs 10x less anyway.
There’s probably nothing truly worthy of your time in this world that a guy making $500,000 can do and a guy making $150,000 can not.
I dunno, $200K more staff to handle the scut wouldn’t suck. Neither would earlier financial independence, or the ability to buy enough land to be able to look around and declare yourself master of all you survey. But I think the staff would be nicest. Honestly, from what I’ve seen, the kind of help a dermatologist can afford compared to a primary care doc, and having that resulting ability to just focus on the fun stuff and leave the mind-numbing bureaucratic/legal crap to others really isn’t anything to sneeze at in the least. Maybe it’s partly a matter of organization, but I can’t imagine the amount of money traveling through your office based on the vagaries of the market and gov’t/insurance company mandates have no impact on how pleasant a work environment you can create for yourself.
The majority of these posters are clueless. 1 million dollars a year is a joke, believe me, you will wish in the not so distant future that you had set your sights higher financially, because you will still be working hard the rest of your life with that kind of income (unless you plan to be single and childless). I have pretty much wasted my twenties pursuing a bachelors degree in science + medical degree (which it took forever for me to do since I was never really passionate about it in the first place, but could never admit it to myself because like many people brainwashed by their parents/society, I needed the reassurance of medicine for my self-esteem). I plan to quit after completing internship and go into healthcare business (technology, devices, pharmaceuticals, etc) as an ENTREPRENEUR while pursuing my real passions. Good luck to all those of you still lost in the maze.
sickofmedicine said: “The majority of these posters are clueless. 1 million dollars a year is a joke, believe me, you will wish in the not so distant future that you had set your sights higher financially, because you will still be working hard the rest of your life”
Since you’ve spent your life in school and are still a student, I don’t think you have much experience being surrounded by people who earn $1+ million per year. It’s obvious that you do not.
I’ve seen and heard enough investment banker friends “living the dream” to know that people who make $1 million a year (or even $500,000) have absolutely nothing worthwhile to spend it on. NOTHING. They just throw it away on crap like Maseratis that break in 3 months, or they want to “see a celebrity” (OMG! It’s Brittney!) and pay $1000 to get a table at some supposedly “exclusive” club that Fredo just opened last week.
The ones that are happy aren’t the ones making more. It’s the ones who truly enjoy their field (in this case, corporate finance). If you love what you do, you don’t think about money much after that. It’s just something you buy cheeseburgers with. Ask Warren Buffett.
Your mistake in life wasn’t “not setting your financial goals higher” but “choosing a career based on money or prestige instead of what you enjoy doing.” Sorry that happened to you, but the first step is to stop misinterpreting your failings.
To BenLunsford:
You are misleading the posters on this forum by putting the phrase in quotations that did not appear anywhere in my previous comment “choosing a career based on money or prestige instead of what you enjoy doing.” That is your own conclusion, and NOT why I chose medicine. As I wrote earlier, I chose medicine because, “like many people brainwashed by their parents/society, I needed the reassurance of medicine for my self-esteem.” Don’t misinterpret what I’ve said and don’t try to pass on your misinterpretation to others.
I am convinced from other medical students, residents, attending, and physicians in practice that what I have gone through is not a rare experience. Medicine is put on a pedestal in this society, and if you are raised from birth to look up to the profession like I was and like many children of physician parents are, your identity is already wrapped up in it before you’ve chosen your major in college. It has nothing to do with money, but more to do with psychopathology, dysfunctionality, and the prevalence of narcissistic personality disorder which is rampant in the personality types within that profession. BTW, I take full responsibility for entering the medical profession–no one ever at any moment put a gun to my head. The closer I get to the end of this road, the gladder I am that I went through this, because if I hadn’t, I would have never seen it for what it really is, and I would have still been insecure about it. If that’s failing, then I am glad I failed. Failure is a prerequisite to success.
Regarding work experience, how do you know I have never worked? I have worked many jobs, from minimum wage to salaried professional, during highschool, college, and after college/before medical school. I have plenty of experience being around people who make well over $1 million a year, within and outside of the medical profession and the healthcare industry and believe me, seriously wealthy people don’t chose medicine, and when they do, they get out of clinical practice fast (if they are not already independently wealthy and are trying to continue building their wealth). I admire the ones who manage to leverage their education and experience if they can (see what Holly Branson, the daughter of Richard Branson, has been up to these days).
Regarding medicine itself, I am so grateful to have received a medical education. Even if I never save anyone’s life directly, I am already aware every day of the choices that I often make without thinking about it which improve my physical and emotional health, which I never really took seriously before. And this at a young age, and not at middle age when I probably would have made those choice reactively from the fear of losing my health.
The people overly obsessed with money just haven’t realized yet that the reality of having obscene amounts of money isn’t all that. I used to be caught up in the usual “I’ll never make as much money as…” kind of thinking, having seen family and friends go into other fields that made far, far more money.
Thing is, I’ll bet most of the people thinking that a million a year won’t ever be enough don’t actually know that many people who actually have net worths 8 or 9 digits long. Because while they have really nice homes and can take really cool trips, most of the time they’re not actually out there relaxing and spending their money-they’re stressed out because they have the pressure of the livelihoods of thousands of employees on them, pressure from customers, pressure from family problems (made much harder to handle when you have to deal with so much prsesure at work).
All this before seeing the toll the current financial meltdown has taken on the psyche of just about every single person I know with a high net worth. To see that kind of money disappear after working decades of 100 hour weeks is worse for the psyche than probably even the most malignant of residencies. I know someone who worked the last 20 years and finally made it to the level where they had just hit 7-8 figures a year (most of it in stock options), only to see those same stock options become completely worthless-options they weren’t able to sell due to multi-year vesting requirements. To top it all off, they don’t even know if they’ll have a job next week.
I wouldn’t trade my life, miserable as it is right now, for that of the 7 figure a year people I know, or even the 8 figure a year people I know-because I finally get that having all that money really won’t be some cure-all that makes me any happier. It’s nice to dream of $20 million manhattan apartments (although, most people who bought those apartments really just bought them to sell for more money-look at 25 CPW) and private jets, but the flip side is trashing your health (way too many top wall streeters have awful cardiovascular health), your youth, putting off family life then later regretting not having had kids earlier, realizing that a divorce is going to cost you obscene amounts of money, and having to be on your blackberry (or even TWO blackberries) about 130 hours a week.
And while my post is largely about bankers, there’s just as much pressure on CEOs of other companies-when you don’t make the numbers and you have to lay off 20,000 people it’s not exactly fun times.
BTW? If you think that you’ll feel rich when you finally make that 10 million a year, please realize that people worth even a hundred million just compare themselves to people worth even more. There’ll always be some hotshot billionaire hedge fund manager, silicon valley kid, or whatever to compare yourself against. So unless you realistically think you can have more money than Warren Buffet and Bill Gates combined you’ll never, ever, feel rich enough if you don’t get over it.
Once you have enough money for a nice car, a nice home, and money for the kids to go to decent schools (probably the most expensive thing on this list if you want to go private all the way), all that extra money really doesn’t do a lot. Find a neighborhood with good public schools and life will be just fine whether you make 150K a year or 900 million a year.
Seriously, most of the people obsessing about money just don’t realize that when you actually get all that money nothing changes-if you’re miserable you’ll still be miserable, and half the people who make it big up their expenditures with ridiculous crap that keeps financial pressure high anyway. Spending less money is about the only way to make financial pressure disappear, as many a bankrupt popstar can probably prove.
It’s like being President-it sounds nice, but I personally wouldn’t want to have to make decisions about what to do with the wars you have to fight (and the people that’ll die), know all the horrible secrets of the CIA that you probably would rather not know, deal with millions of people hating you, have everyone expect you to be able to fix things you really have little control over, having to fight congress to get anything done, and the obscene pressure and stress it all adds up to. For most people it’s better left an elementary school fantasy.
If you really do dislike medicine and realized you got into it for the wrong reasons, that’s fine. But this ridiculous obsession with money being some cure-all is pretty ridiculous. Learn how to save your money (like maybe not buying that Porsche first thing after residency) and life will be comfy no matter what specialty you do.
A lot of wisdom in the posts from tek and Lunsford, and then there’s sickofmedicine…..
Sickofmedicine, if you grew up around physicians how in the world did you NOT know what you were getting yourself into? All this talk about “needing medicine for my self esteem” and “being brainwashed by parents and society” is nonsense. My father is in medicine, told me NOT to do it and I did anyway. My mom told me countless stories about the way he was worked into the ground as a resident, before I was old enough to remember.
One of the reasons many med schools LIKE applicants with MDs in the family is that they know what they are getting into. Then again, every now and again is a smart kid whose family put pressure on him/her to be a doctor and they wind up miserable. My class had one or two just like you.
If you think $1 million/year is NOT a decent salary, you are the only one truly brainwashed. It sounds to me like you are headed for the treadmill of consumption, already eluded to by tek, where no matter how hard you run it’s never going to be quite enough. The irony is, you think you are escaping that by getting out of medicine. All you really have to do is change your mindset. If you don’t do that you’ll never be happy, no matter how much you earn or what the future holds.
And if you think narcissism is unique to MDs, I’m sure anyone in the business world would tell you that CEOs and other corporate big wigs have just as much, if not MORE of those traits.
If medicine’s not for you, good luck in your other ventures. If being an entrepeneur makes you tick, go after it and chase your dream. But if you think you’re going to get super wealthy without as much time and effort as a venture capitalist, I’d say the odds are against you but I hope it works out.
And maybe you could drop me a few secrets before you go public so I can make a little cash for myself:)
Tek, my favorite quote by you:
“Spending less money is about the only way to make financial pressure disappear”
That consumption treadmill is a bitch. I’m already watching a lot of my peers (year and a half out of residency) get on that treadmill. Salary goes up 5,6, or 7 times what it once was. What do you do? Buy the biggest house you can afford. Travel once a month at 2-3K per trip. Nice new sportscar/luxury car. In a big hurry, you find you HAVE to work harder just to support the lifestyle. But the lifestyle is never enough, someone is always making more and spending more and there’s always something new to spend it on no matter how much more you make.
Life is about being happy with what you have, while still striving for better/investing for the future and not being complacent. Not an easy task and I’m still figuring it out myself……
This is one of the funniest threads ive read… lets focus on how to make more money as physicians instead of arguing whether we make enough. Does anyone know any good websites that focuses on physicians and how to manage a successful business, i know that medicine out for helping people and talking about making money is a taboo, but im tired of this bullshit and would like to know where i can learn what the best options are for managing a clinic, practice, etc. Thanks for your help, by the way yes im tired and studying right now so i hope i didn’t offend to many people.
It all depends on how you define rich.
To me rich = hot, big-titty, stripper pussy. Therefore, I am the richest motherfucker on planet earth. When I become a doctor I’ll still be the richest motherfucker on planet earth. However… some other dude might define rich by the number of cars he has… and then I wouldn’t be the richest motherfucker on planet earth… but probably number 3 or 4.
If you define rich by the size of your bank account the you’re an idiot b/c your gonna die with nothing… just like the rest of us.
Lesson learned… love your car and go get some pussy.
^^^^^^^^^^
LAWL O.o.O
Agreed fully! I still love medicine but yes, I agree whoever pursues this for money alone is a total fool. This career requires a lot investment in terms of finances, emotions and energy, and time. You better love what you do or else you’ll regret like no other.
Unfortunately, there is still a popular perception, especially in those who do not work in healthcare, that this field gives easy bucks. As a result, such a perception also attracts people to possibly pursue it. My cousin’s father keeps pushing my cousin to become a doctor even though she really could care less. Her dad says that because inpatient services are so much more expensive than outpatient, he seriously wants her to build a hospital right after graduating from medical school. According to him, once the hospital is set up, she’ll never have to work a single day, all she has to do is hire some doctors and nurses and she’ll be super rich…omg…the STUPIDITY. BTW, he is DEAD serious, he saved up 2 million dollars so far to start up this so called hospital and thinks that should be enough, apparently the bills you charge patients should help give you money to keep expanding and profiting. Oh the pity…
I got news for all the people out there who are complaining about how hard they worked (or are working) and how much it isn’t worth it in the end, I have a question for you. ESPECIALLY in the economy the way it is now, do you think there is anyone out there who is going to be a success in life without years of hard work? Years of long hours and tears? There may be a few special cases of people who get really lucky, but thats all they are, REEALLY lucky!
In the end, yeah Med school is a more grueling process than others, but (to steal words from Tom Hanks in “A League of Their Own”):
“Of course its hard! If it wasn’t hard everybody would be doing it. It being hard, is what makes it great.”
Check out this article, it is very relevant to what’s being discussed here:
Why doctors don’t get rich?
Come on..this is nonsense…number 1, the pencil maker may get an order for 100,000 pencils OR may not get any order what-so-ever…so he is compensated for the risk he takes.
A doctor on the other hand will never run out of patients to see…even with the amount of people who are losing health benefits…show me a doctor with a good track record who is having trouble keeping his schedule filled.
Number 2; the profit margin on 100,000 pencils is still probably lower than a doctor seeing 50 patients.
And to say that people are working less and making more…this i also disagree with; financial investment bankers who were making crazy money were also working 70 80 hours a week. Business owners are tied to their companies, email, blackberries, etc…so to say they work LESS…hard to imagine.
In an efficient market, people are paid for the value they provide. I do agree however that things like medical insurance, government regulations interject inefficiencies into the market which shifts income from the doctor to the patient.
Well, many of these arguments are very flawed. I think the original one is very flawed. Let’s say that you can hire enough people to treat the 100,000 patients. If each doctor is seeing 50 per day (let’s assume that is a 12 hour day), that is 4 pts per hour. The average patient primary care office visit is $155 (according to the AHRQ http://www.ahrq.gov/news/nn/nn042507.htm). That is $620 per hour. The average contract primary care doctor gets paid $92/hr. (from personal experience). That is a $528 per hour profit. If you take 50% of this to cover overhead (which is very high) you are still left with a $264/hr profit margin.. per physician.. which is 2000 physicians, $528,000 per hour, $6,336,000 per day. Take that by 5 days a week for let’s just say 48 weeks..you get over $1.5 billion per year.. in PROFIT.
To some real numbers that I know.. take a doctor who delivers 30 babies a month. Average reimbursment is $2,000. So, just in delivery collections you have $60,000 a month, $720,000 a year. Now, let’s add in chech-ups, STDs, Family planning visits, and other gyn problems, lets just say 30 visits per week, at an average of $155…$4650/week or $223,200 per year (on 48 weeks). So we are at $943,200. However, we haven’t even added in the collections on Gyn surgeries. Let’s assume just 10 per month at an average of $2,000… another $240K a year. So.. over $1 million a year.. for an Ob/gyn doctor.. and this is not out of the ordinary.
I know so many doctors who are practicing good medicine and they gross well over $1 million a year doing it.. some in 4 days a week. The problem is that most MDs don’t know how to do it and they are just trained to see small volumes of patients and only bill global office visit codes.