Column: Overpaid doctors?

Many people outside medicine envision doctors as working four days a week (if it doesn't interfere with their golf schedules), exploiting tax shelters to finance their Porsches, all the while pulling in 300K annually just for a few extra years of school. Oh sure, they say. Medicare is sticking it to them and malpractice premiums are rising, but so what? They can spare a few bucks. An M.D. costs many times the cost of a law or business degree, yet medical students pay roughly the same tuition as other professional students. Supply of physicians is artificially restricted through medical schools in order to keep wages high, and I have to wait long enough to get an appointment as it is, so let's open the floodgates and bring down those overblown wages. And then the final pronouncement: Doctors are overpaid.

Given the space, I can't address every misconception contained in the above paragraph, but I can tell you this: Doctors are not overpaid.

Before I continue, I should probably issue a disclaimer: I have been accepted into medical school for next fall, so my interest in the subject is more than merely intellectual. What follows, however, is an economic argument, not a political or emotional one.

Labor economists explain some differences in income through compensating wage differentials. Jobs that are dangerous or unpleasant offer higher wages. Otherwise, people wouldn't take them. In our age of infectious disease and violence, I probably don't need to explain that medicine can be dangerous or that medical practice isn't a bowl of cherries. Holding the responsibility for another's life is, put mildly, stress-inducing. Some areas of medicine are more unpleasant than others; some specialties have more paperwork, higher litigation, sicker patients or worse hours. Among the specialties, we do see some differentials according to these factors.

However, productivity is the most important factor in wage determination. Broadly, a worker's fair wage is equal to her marginal productivity. More productive people make more money. Doctors tend to be pretty productive, intelligent and hard-working with aptitudes for science. If a particular physician weren't a physician, there's a good chance she would be well-paid in some other field such as research, engineering, business or law. To determine the amount by which she is "overpaid," you need only look at the difference between her second-choice job's salary and her compensation as a physician.

Intensive training often results in high marginal productivity. With respect to the medical field, most grossly underestimate this component of compensation. The real difference between other professional training and medicine comes after medical school. Lawyers and business people tend to step into well-paying jobs after graduation. Their hours are bad, but not as bad as the average intern's, who used to work around 100 hours a week and usually makes less than $40,000 per year. Work hours recently have been limited by law to 80 hours per week, but the "overpaid" doctors who are practicing now commonly worked in excess of this amount while training.

The heart surgeon who saved your grandmother's life was a general-surgery resident for five years before beginning a thoracic fellowship for another three. Her salary is not a reward for four years of medical school. Her medical education lasted 12 years: four years of medical school plus eight years of graduate education.

There's evidence that a tradeoff exists between income and public service ; people who take jobs with a large component of service are willing to trade some income in exchange for feeling good about what they do. This perhaps explains why teachers, nurses and public defenders make so little while oil company executives and stock brokers do so nicely. We don't have enough of these public servants as it is. But can you imagine how few we'd have if their jobs required a minimum of seven years' graduate education without a salary adjustment?