post by Paul Kelleher
Here is a Exhibit 14 from the McKinsey Global Institutes's Nov. 2008 report "Accounting For the Costs of U.S. Health Care":
This seems to suggest that there is something unusual about the U.S.: somehow physicians in America have a higher earnings-to-per capita GDP ratio than the OECD average.
But this is just one metric one might use to compare U.S. physicians' earnings to those in other countries. Here is a table from a recent paper by David Cutler and Dan Ly:
The updated 2010 data used by Cutler/Ly still reveal a higher-than-trend ratio of U.S. physicians' earnings to per capita GDP. However, if one instead compares the ratio of earnings to the income of other high earners (i.e. income earners in the 95th to 99th percentile of the income distribution), the U.S. is actually below the non-U.S. OECD average. This is true both for specialists and general practitioners.
I was directed to the Cutler/Ly paper by a recent paper in Health Affairs by Miriam J. Laugesen and Sherry A. Glied, in which the authors argue that:
[T]he medical care delivery sector cannot be fully separated from the rest of the economy: Physicians everywhere are drawn from the peak of the educational distribution, and their earnings reflect the cost of drawing highly skilled people to the profession in an economy where the rewards for skilled individuals are higher than elsewhere.
ADDED LATER: To state it explicitly, Laugesen and Glied seem to be suggesting that instead of seeing the U.S. as the outlier (in terms of earnings/per capita GDP), you could see it as right there in the pack of all OECD countries (in terms of of earnings/high earners' incomes). The U.S.'s outlier status on the first score might then be a side-effect of (1) docs' salaries keeping up with high earners' as they do in all OECD countries and (2) the U.S.'s outlier status in income inequality.