Hacker News Reader

Comment by manholio | Hacker News Reader

I always wondered: ok, the US medical system is atrociously expensive and inaccessible, but where does all that money go? Surely a surgery cannot really cost half a million dollars, can it?

Well, when a large number of patients are effectively outbidding each other over an insufficient pool of medical professionals, then yes, it really can cost that much, not necessarily by making doctors absurdly rich (probably some of that too), but in the sense that price gouging structures will surely emerge to capture that surplus.

View on HN

Most doctors aren't getting "absurdly rich" in medicine, at least not anymore, and certainly not by tech industry standards. (Source: I am a medspouse who works in tech outside of SV.)

Most of the money is going to private insurance companies and their non-med staff, as well as hospital administrators.

> Most doctors aren't getting "absurdly rich" in medicine, at least not anymore, and certainly not by tech industry standards. (Source: I am a medspouse.)

"Absurdly rich" is too vague to be meaningful. But on average, in the United States, doctors are better-paid than those in the tech industry. And it is not a close call. See https://news.ycombinator.com/item?id=30047116 for links to tables from the Bureau of Labor Statistics.

At Hacker News, we may overestimate tech salaries (thinking too much of FAANG salaries, for example). And like most Americans, we may underestimate doctors' wages.

Not to mention that doctors are paid in cash and not stock

As the parent mentioned, you need to consider their malpractice insurance and overhead, which isn't insignificant

You are not considering the cost of graduate school and the opportunity cost of medical school + residency + fellowship (7-12 years), as well as malpractice insurance costs, long working hours, and on-call burden.

You can’t overlook the fact that doctors also work about 1.5–2x standard work hours. About 60 hrs/week is on par for most doctors. Many surgeons will be putting in 80 hrs/week or else take a pay cut. Adjusting for that in addition to cost of medical school and time spent in school and residency (7–11 years after college), I don’t think the salary is really that substantially different.

These numbers are arguably biased high from a median point of view for comparison with tech salaries due to the long training required before anyone can start making money as a doctor. Especially for the high end ones that require fellowships.

4 years of undergrad, 4 years of med school, 2-3 years of residency, maybe a chief resident year, 2-4 years of fellowship.

So after 10-15 years of training, doctors get their first big paycheck. Meanwhile, smart high school graduates can start making tech salaries in their early 20s.

Median lifetime earnings would perhaps be a more useful metric.

The majority of people in Tech are making under 100k and most cap out under 150k.

The SV numbers tossed around roughly compare to the percentage of doctors making over 1 million per year which is very real, but again small percentage of the total.

Don't forget a large chunk of it is going to three or four layers of middlemen for everything that happens that need to get their cut.

The money by-and-large isn't going to the surgeon; it's going to the insurance company's layers of bureaucracy, and to the hospitals' fattened administrative staffs.

When the price of an end product (in this case medical care) goes up, all of the suppliers prices go up as well. When you charge a lot for something you tend to justify it by expanding your headcount, and to give them something to do you make things more complicated.

The money goes all over the place, everybody gets their cut, prices are almost never lowered because competition doesn’t properly exist, and things get more expensive.

Most of it doesn’t need to exist but almost nobody’s interests are aligned properly to want to lower prices and raise efficiency.

> The money goes all over the place, everybody gets their cut, prices are almost never lowered because competition doesn’t properly exist, and things get more expensive.

no quibble with the theme of your post overall, but to clarify: US physician wages have been decreasing in real terms since the 1980s.

So, prices go up, but the dollars go elsewhere.

Everybody accuses somebody else of gouging us. That's a sure sign that they're all gouging us. I wonder if benefit of a government system is just that it's possible to figure out where the money is going.

Reply on news.ycombinator.com