At i2g Consulting, we encourage people to think differently. Different perspectives lead to different conclusions. Let's start with healthcare.
Everyone knows that the cost of healthcare has gotten out of control. The average cost of employer sponsored healthcare is $20,000 for a family plan. We know that a portion of that money goes drugs, a portion to hospitals, a portion to home health and nursing. About 16% of the money spent on healthcare goes to doctors- approximately $550 billion a year.
To do some simple math, there are about 1 million physicians in the country. So, physician services average about $550,000 per year. Of course, doctors have to pay malpractice insurance, staffing costs, some office costs and other expenses. But, the average physician salary is still around $300,000 per year. Pretty good pay, right?
Right about now, the reader is checking the title of this piece and trying to connect "$300K per year" with "free med school". To better understand this, we need to answer 3 questions:
Why are physicians so well paid?
Physicians aren't necessarily well paid around the world. In the US, Western Europe, Australia and New Zealand, doctors are well compensated. However, in Spain, doctors make about $63,000 while in Mexico, doctors make about $22,000. These differences aren't in line with the difference in cost of living or the size of economies. Doctors in the US are well paid for a few reasons:
The simple answer is, no. In fact, the disparity between 2 doctors who may have gone to the same med school is pretty substantial. There are 2 primary reasons for this:
Medical School Role
By now, it should be obvious that the cost of medical school is part of this equation. The "pot of gold at the end of the rainbow" is one of the reasons that medical schools can charge what they do. The average annual cost of tuition at public schools is more than $30,000; more than $50,000 at private medical schools. But that doesn't capture the full cost. Students generally borrow for living expenses as well and often have to continue to borrow money through a portion of their training. As a result, the median debt for students at private medical schools is $180,000. That number drives behavior for years, from choice of specialty (higher compensation) to choice of location (cities or academic medical centers which pay more) to the actual practice of medicine (more patients, more volume, less personalized care).
This necessary appetite for higher compensation directly affects both the quality and the cost of healthcare in America:
Given everything we've discussed, free medical school may seem an illogical conclusion. An industry that generates $4 trillion in revenue annually seemingly has the money to pay high salaries and absorb high costs. However, the fiscal impact of medical school debt impacts what we pay for healthcare and where we can get healthcare far into the future.
With that in mind, consider this modest proposal:
Jim is the CEO of i2g Consulting