According to the article, our MDs get paid twice as much thanks to AMA controlling how many MDs are produced. Can we lower the health expense while maintaining high pay?
Exactly! Our kids already had an advantage growing up in a financially stable environment provided by successful parents. Inheriting parents assets without taxation puts them too much ahead.
MDs in Europe don’t graduate with hundreds of thousands of dollars in debt for medical school tuition either. They also don’t work the long hours our doctors work.
Probably because there are more of them they don’t need to work so much. It’s a vicious cycle. People pay so much to attend medical school since they will be rewarded well later on. On the other hand, med school tuition could be lower if doctors don’t get paid so much. Yes, everyone in 9.9% believes they are entitled to what they got and more.
@Iglooo Can we lower the health expenses while maintaining high pay?
Maybe, there certainly seem to be many ways to improve the system. One thing is open up more medical schools. There is certainly a shortage of doctors, make medicine a 6 year program, get drug companies to compete.
I wouldn’t kid myself into thinking European universal health care has better outcomes. If you have cancer or a major disease you want to be in a US teaching/research hospital. Maybe for simple things Europe is fine , but for expensive and difficult procedures the US is #1 and that’s when you really need health care. A friend of mine’s Dad in England just recently died of cancer the options offered to him were not good nor were they timely. Take it or leave it you get what you pay for.
I believe the real constraint to the number of new doctors produced in the US each year is due to the number of residency slots. No doubt the AMA also has an interest, but that is not the main constraint today.
As an aside, given the enormous time and cost it takes to become a doctor in the US, I would argue that the primary care physicians are hardly over-paid. Back when my D was considering a pre-med track, I told her to only consider being a doctor if she loved the work, not with the expectation of making a lot of money.
This would certainly help with the time and cost aspect (leaving aside the massive bulge of students looking for limited residency slots when the 6-year program students finish at the same time as the 8-year students that started two years earlier).
But the US is actually going the other way, with many taking a year off between undergrad and applying for medical school to beef up their med school applications. So it’s often 9 years until the basic medical degree, then residency, then specialization in some cases. It’s insane.
A better way to account for inflation in capital gains/losses would be to index the basis of capital assets to inflation, rather than give a one year cliff to a much lower tax rate.
@hebegebe I agree. Not only are they underpaid but their career path is similar to that of someone opening a business: high expenses, and a long curve of low pay with a steep curve at the end. In addition, it is now very high risk to pursue an MD, given the high demand for universal health care and the likelihood of that happening in the next 30 years.
The article was interesting but the people who criticize people who earn say 300,000 a year at age fifty with three kids have not run the numbers and are very unfair. The numbers don’t work if they are paying full freight for college, even if they are frugal. Let me run through the numbers roughly. Take a couple, both 50, collectively earning 300,000, three kids, one a junior in high school. Everyone agrees 300,000 is upper income, but they have not earned 300,000 for eternity. Collectively, they were earning 150,000 at age 35, when their kids are being born. At that age, having paid off their college loans, and saving for a house, they have no significant savings beyond contributions to a retirement fund. Over the next fifteen years their income rises to the 300,000. During that time, they both worked extra hours, made they extra effort at work to raise their income. If they average 200,000 a year they earn three million gross dollars. Holy cow, that seems like a lot of money. Well, lop off at least one third for taxes. Two million. Now, if they can pay mortgage, car payments (have to commute), insurance, child care (both parents work), normal non luxurious family stuff (clothes, food, donations to local religious institution), and local property taxes for 6,000 a month that would be a low frills life style. That would require 72,000 a year for fifteen years or 1,080,000 dollars. Now they have less than one million dollars. Assuming that they have no obligations to care for elderly parents, take no vacations, but no new furniture and devote none of that money to retirement, they now have one million dollars to pay for college. Their kids turn out to be excellent students and they hope that all three can go to excellent private schools.
They run the cost calculator and with the equity in their home and the savings, and income they get ZERO in aid. That means that if all three go to private schools, and tuition does not increase over the 13 years of their kids expected time in college (unrealistic) they will owe 4X70,000X three or 840,000 dollars, or nearly all of the hard earned savings. If the tuition goes up, then the entirety of the savings is gone.
OK, i get it, people can’t afford some things. Some people can afford Mercedes and some can’t. But that is not what is going on here. College presidents are very open that to fund financial aid they raise tuition—there is not a limitless pot of money, even at very wealthy schools. So, this hard working family is being told that the college they want to go is charging them higher than the necessary rate in order to subsidize other families. That may be good policy, it may be fantastic policy, but it is basically telling this family that the fifteen years of extra hours, hard work, and dedication is going to pay for some else’s kid to go to fancy Ivy university. Meanwhile, the family down the street that makes 600,000 a year can afford to go.
My example and numbers are simplified. Harvard is drawing on its resources and not just tuition money. But I have also been conservative. I have assumed that elderly parents are not drawing resources and not placed my hypothetical family in California or New York. I have not allocated any money toward an expensive extracurricular, like hockey. My point is that just saying, oh, people making 300,000 a year should keep their mouth shut is grossly unfair. The amount of tuition money is so large that even a very well off family takes a huge hit.
I am not sure what the answer is. I am not suggesting that diversity is a bad thing or that financial aid should be cut. I am just noting that the push for more aid is on the backs of the some of the hardest working families in the country and their complaints should not be minimized.
Depends on which other nations. The US is generally regarded has having greater intergenerational economic mobility than the UK, China, and many nations in Latin America, but less than in many other rich nations including many in Europe, Canada, Australia, and Japan.
https://inequality.stanford.edu/sites/default/files/Pathways-SOTU-2016-Economic-Mobility-3.pdf
https://www.epi.org/publication/usa-lags-peer-countries-mobility/
https://www.brookings.edu/wp-content/uploads/2016/07/02_economic_mobility_sawhill_ch3.pdf
Or, you know, you could be working extra hours and making extra effort at work and supporting your three excellent students on $40k a year, less mortgage, car payments, insurance, child care, and normal non-luxurious family stuff.
Note also that in your example, this family has $72k a year in excess net cash flow. There’s your college funding; no need to tap savings.
It’s ironic that colleges, universities and professional schools all claim to be progressive and their leaders claim to want to produce a more equitable society. But…tuition keeps going up and up. Do they cut down on staff? Do they cut bloated salaries? Do they stop building? Do they make the monetary requirements to apply to college easier? No. They don’t recognize that THEY are part of the problem of making college less and less affordable and thus they are helping to create the social stratification they claim to deplore.
If you can pay for it. It is likely that the top-end US teaching/research hospital care is too expensive for most people to self-pay, and out-of-network for a large percentage of people who have medical insurance.
@manyloyalties This isn’t about hating people who make a lot of money. I’d love to make a lot of money. I would love for my kids to make a lot of money. This is about recognizing that there are certain classes in this country that have huge advantages that others do not. These are serious, important advantages like access to a decent primary school education, tutors, coaches and special care for kids with learning disabilities, enrichment opportunities, contacts for internships etc. We know quite well that kids raised with educated parents succeed regardless of the income of the parents and so that needs to be accounted for. It is possible to love the capitalist system and still understand and want to remedy these inequalities. Some of this is better financial aid so that low income families can actually send kids to college. But much of it has to do with programs and opportunities that need to be in place along the way as kids are growing up. They need books in the libraries, guidance counselors who can help them plan for and attend college, the kind of enrichment that middle class families take for granted.
Also your example of the family making 300,000 misses much of the point. Your family has an extra 1 million saved to send three kids to college. Those kids will have a wide array of decent schools to choose from which don’t require full pay. They will have in state options and private schools that offer merit aid. They will have the benefit of a good education and supportive parents. I honestly don’t care if they can’t afford to pay for NYU and have to go to Suny Binghamton instead. I care about the college ready kids who can’t go at all.
Edit because I missed this before:
So you are saying its unfair for them to have to pay for the private college of their choice even though they can do it and still have some savings left? No loans, but some savings? I believe that your example separated out retirement savings so this is in addition to their retirement savings? Isn’t this what they were saving for?
@allypho you did not read my example carefully and entirely missed my point. They dont have 72,000 a year in free cash flow,that is the money used to fund mortgage food, etc. If they don’t spend the 72,000 they don’t eat or have a house. The balance of the money was saved for college. But my bigger point was that the million dollar in savings is paying a RETAIL rate for college when others are paying a wholesale rate. Yes, they saved the money but it is not being used to pay for college for their kids, it is being used for grants for other kids. But the other kids are not really getting grants, they are getting a different price point for the same services. If you can’t understand why that is disturbing, we have an unbridgeable gap in empathy and understanding.
Even at $150,000 income, they were earning almost three times what the median household in the US earns now. Surely, they could still save aggressively for both their retirement and their kids’ college while still living comfortably. If they carefully put all of their income increases into additional savings (rather than ratcheting up spending like many people in the US do), they should have plenty of savings plus investment gains from those savings.
Also, the “one third for taxes” is less than one third for federal income tax + state income tax + payroll tax for many locations (including in many high state tax states), based on https://smartasset.com/taxes/income-taxes .
Another irony is that governmental administrations that decry income inequality and social stratification hire people for decision making jobs in their own administrations largely from the Ivy League. I read somewhere that 40% of those positions were filled by Ivy Leaguers. Surely there are qualified people from state universities with excellent qualifications to fill those positions.
There are all sorts who talk income inequality but when it comes to doing things to ease it, are hypocrites. (Like the Silicon Valley billionaires who hide their money in tax dodges rather than doing anything to help the homelessness in their area). See the other thread.
@allyphoe That 40K family is going to get aid so no out of pocket there. Reality check is that even full tuition scholarship with food is not going to cover some things so that can be painful. But the point made is that the 300K family has to ante up all that tuition, so there big numbers in savings and income turn into basically nothing despite the really hard work.
@ucbalumnus Well in the US, most can check themselves into ER ward of a major teaching hospital and go from there. Even if they are out of network they’ll likely leave themselves with a large bill rather than exit and chose different hospital with higher chance of death. It’s the pretty rare person who is only going to go to a hospital in their network if they are faced with serious disease. That’s not an option in Europe ( except Switzerland). Plus in Europe you might wait 6 months to a year for a hip replacement ( or you might chose to pay for it yourself to skip the line) Or, they might decide that you are 93 and too old. Not a system of choices made by the patient but set by the government. It’s certainly more affordable but not optimal for the very sick, those with rare diseases and others. There is a reason why US medical care is so expensive. Here we do a lot of research and development which is very very expensive.
@gallentjill you confirm my point exactly. You “honestly don’t care.” You don’t care at all that a family that worked extra hard for many years is forced to pay a higher price for the same services, consuming 100% of their savings. That’s just sad. It is always cool to spend others people’s money.