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Comment by westbywest | Hacker News Reader

These data would be more informative, were they also paired with vocational costs MDs also incur, usually unavoidably. Malpractice insurance, prep for board exams, for example. Note that the latter can include having to travel to conferences, or similar events, to stay current in the field, and there may not always be an employer to reimburse such costs. Likewise, insurance rates will vary between disciplines, eg. higher for radiology vs psychiatry.

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I don't really understand this. I'm a small business owner and all the insurance, training costs, etc. are not money I make. Those are business expenses. If you work for a big hospital or group, the employer pays for all that. If you open a private practice, your business still pays for it. The doctor and their practice are separate legal entities for a reason. The doctor's salary comes AFTER all that stuff is paid for by the business. So you don't subtract the cost of insurance from their salary.

While this might be the case in many businesses, physicians generally pay their own malpractice insurance (which can easily be more than $10k a year) out of pocket. The litigious nature of the medical system as a whole in America drives these costs way up and it makes a noticeable impact in not only how much doctors take home but how they act to cover their asses from a lawsuit.

Conference expenses and the like are still often covered by the group though so that's at least something.

$10k doesn't seem so bad if you are billing at a rate of $2 million a year.

(Of course utilization isn't 100% and primary care doctors aren't billing at that rate, but that's often the rate for a not particularly expensive specialist visit)

http://www.aafp.org/news/practice-professional-issues/201505...

>On average, primary care physicians overall -- and family physicians, specifically -- earn $195,000 annually, compared with $284,000 for physicians in other specialties

Lots of doctors operate their businesses as sole proprietors, and not all firms that employ doctors provide malpractice. (Granted, that's a shitty policy, but it happens, and it's even a bit theoretically justified since it might cut down on moral hazard.)

Sole proprietors still have business expenses that are separate from their income, which comes after. Additionally, anyone making Doctor money who runs their business as a sole proprietorship is a fool for not protecting their personal assets from their business dealings.

Even if all the physicians were to decide to do their accounting the way you recommend, one would still need to make adjustments for the costs of doing business, when considering reporting of income like that found in TFA, which certainly does not include such adjustments.

It's not a matter of "decide to do their accounting." Business expenses are business expenses, even if you're a sole proprietor. It is a business expense, therefore it comes before your salary. Just like any other business expense, you could technically not choose to claim that business expense, but then you'd be paying income tax on that money. But you could also choose not to claim your office space rent, the salaries you pay your administrative staff, etc. Those things are all in the same category.

Private practices would indeed have their expenses arranged in the fashion you describe, i.e. with those qualifying expenditures counted as business expenses before pass-through. The caveat is that titling the private practice as the malpractice policy holder, so that the insurance costs become business expenses, exposes the corporation to lability, not just the individual physician. For practices involving multiple physicians, or which own/rent property to operate a clinic, this liability exposure can be undesired. Relating from a relative who is a physician, who has been a contractor and an employee, I have to stress the general point that professional expense accounting for doctors is quite unique, due to substantial involvement of insurance and regulatory concerns. It's not easily relatable to other professions. Likewise, doctors, despite making very generous compensation, are often still frequently struggling with their employers/contractees, or with 3rd parties like insurance providers, pushing costs onto them. Since telemedicine doesn't really exist in significant form, doctors don't always have the option of quitting and finding better work in the same city/state.

Also, it's probably helpful to factor in how much debt they're in starting out.

My fiancee is in (we're in) >400000 of debt. And as a resident she's effectively making ~-2 dollars/hour [0], because of the interest rate on that loan, location, and hours.

I can't find it immediately, but in a recent MedScape report, some ~5% of physicians are still paying off their med school debt at 60 years old.

[0] http://dotphra.se/

"some ~5% of physicians are still paying off their med school debt at 60 years old"

I bet that for a lot of these physicians it's because the debt has favorable terms, not because it's onerous.

I expect to be paying off educational debt well into my fifties. I could pay it off right now, but the rate is below 2 percent, so it's advantageous to carry the debt. In particular, if I die the debt is wiped clean...but if I have already paid it back, my heirs won't get that money back. No reason at all to pay off this debt until I have to.

Don't forget malpractice insurance. As high as $200k/yr for high risk doctors like obstetricians. That significantly reduces your take home pay.

When I read this 25 years ago (insane malpractice insurance for obstetricians) my thought was a good national health insurance program would probably fix that. If the US took better care of families with sick/special needs children they wouldn't have to go after the doctors when stuff goes wrong.

I think it's a more complex issue than either medicine, insurance, or the legal system can address alone.

The US which relies on free markets, insurance, and the legal system has worse outcomes than countries that do not.

Agreed. It would also put say, the Infectious Disease specialty in its proper context, as that involves even more extensive training than say, internal medicine.

Geography and type of employment also play huge roles. A clinical professor at UCLA earns far less than a private practice doctor in Ft. Worth.

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