However, there are some weaknesses with this argument. To start with, physician compensation makes up just 8% of total healthcare costs in the US:
https://www.jacksonhealthcare.com/media-room/news/md-salarie...
So, if they were somehow cut in half, that would net a savings of just 4%. That assumes there wouldn't be a corresponding drop in quality as a result of loss of physicians from the occupation. Keep in mind that this is an occupation whose supply is so tight that one of the primary ways being discussed to increase supply is by lowering the credentialing requirements for primary care by having Nurse Practitioners and Physician Assistants provide primary care, unsupervised by a Physician.
I think that's really the rub in terms of talk of lowering physician pay. The barriers to entry in the field (in the US) are so high that if physician pay were significantly reduced without a corresponding reduction in the barriers to entry, it would disincentivize our smartest, and hardest working people from becoming physicians. Which would lead to a significant decrease in the quality of healthcare in the US.
In the case of my wife, she is both smarter and harder working than I am. She spent her 20's and early 30's working 60+ hour weeks doing work that is very taxing mentally and emotionally. She went through four years of undergrad and four years of medical school. She exited medical school at 26 with a significant amount of student debt (though less than many, and at a lower interest rate due to smart decisions on her part) that started capitalizing immediately. She then spent four years in a residency program, making $50,000 a year, and then another four years in two different fellowship programs also making $50,000. When she finally got to a point where she started making a Physician's level of compensation, she was almost 35 years old with $240k in student loan debt and a small amount of savings and retirement built up. She could have dropped or failed out at any time and, if she had, she would have taken on the full cost of the student loan debt without the ability to repay it. This level of debt represents a significant personal risk for physicians that shouldn't be discounted. If you were to compare our financial situations independently, as a software developer, I'm in a better position financially. I've had the opportunity to invest my earnings in my 20's and 30's and haven't had to forfeit so much of my later earnings to debt. As a result of this financial head start, even though she makes more than twice what I make, she doesn't have a chance to catch up with me in terms of wealth accumulation until she's in her 40's, assuming she's financially disciplined and doesn't succumb to physician lifestyle inflation.
If she had instead aimed to become Nurse Practitioner or Physician Assistant, she would have been looking at a low to mid 100k job in her mid-20's with maybe 40k in debt. This would have been a much lower risk in terms of debt, it's much less work to go into one of these fields, and I would argue it may be a better move financially because of the ability to put her money to work earlier from an investment standpoint.
So, if the carrot of higher compensation later down the road is eliminated, I think we will see less quality people entering the field. Physicians are some of the smartest and hardest working people in the US. They'll be able to weigh the cost benefits and will choose alternative fields that have better financial renumeration or lower risk. If the student loan burden were reduced for physicians, you might be able to get away with lower pay without disincentivizing becoming a physician. But I don't see the government providing more assistance to cover the cost of medical school.
If we really wanted to cut down costs for healthcare in the US, the first place to look is administrative costs. We pay more than twice what other countries pay in administrative costs as well. And administrative costs make up a greater percentage of the total money spent on healthcare. Administration costs are mostly waste in that the reason it exists is to keep the gears turning so people can receive healthcare. One of the reasons administrative costs are so much higher is b/c of the complexity of the private insurance system in the US. As others have noted, some of the administrative burden would be simplified by a universal healthcare system.
http://www.commonwealthfund.org/publications/in-the-literatu...