Tuesday, February 26, 2013

American doctors are overpaid: Medicare is cheaper than private insurance

 
many American doctors do believe that they would be crushed if they were paid only Medicare rates. They insist they're hard-pressed as it is, barely getting by, and practically treat these Medicare cases as acts of charity. There's no way they could swallow those reimbursement rates without the whole system collapsing.

But that's not remotely true. The last time the OECD looked at this (PDF), they found that, adjusted for local purchasing power, America has the highest-paid general practitioners in the world. And our specialists make more than specialists in every other country except the Netherlands. What's even more striking, as the Washington Post's Sarah Kliff observed last week, these highly paid doctors don't buy us more doctors' visits. Canada has about 25 percent more doctors' consultations per capita than we do, and the average rich country has 50 percent more. This doctor compensation gap is hardly the only issue in overpriced American health care—overpriced medical equipment, pharmaceuticals, prescription drugs, and administrative overhead are all problems—but it's a huge deal.

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