I know why the discussion about heath care has been so poor. It is because so few people know anything about 4th grade math. This blog will use 4th grade math to reveal the truth about the state of our health care cost.
One of the main reasons that healthcare costs so much in the United States is because our doctors cost too much. Why do our doctors cost more than any other country in the world? It is because of two factors. Those are the cost of cost and time required to become a doctor and the time that the doctor has left to work to get back the total cost of their education. Simple isn't it? Here are the numbers.
Let's say that we have two doctors, both started medical school at age 20 and one graduated at age 25 and the other graduated at age 35. The cost of medical school was $100,000 per year for each. Each borrowed the money at 5% interest from their local bank. When the first one graduated after 5 years, they owed $552,600 and the other second one, after 15 years owed $2,157,900. Don't believe my numbers? Do your own!
The next step is, "how are these two doctors going to get their bait back?" Let's assume that both work to age 65. That means the first doctor will work for 40 years and the second doctor will work for only 30 years. Again, let's figure that they are still paying the same 5% like you would have with a mortgage on your home. Next, let's figure that both doctors work 2,000 hours per year which is about average for most people. Now, how much "extra" will each doctor have to charge per hour to cover the payment on their education. The first doctor will have to charge $16.13/hr and the second doctor will have to charge $71.05/hr. Is this more than you thought? There is more.
The extra cost that the doctors charged did not make the doctors any richer. It just paid back the money that they had to borrow. We now have two doctors who expect to earn the "same" amount during their lives as doctors, but one only has 30 years to do that while the other has 40 years, from age 25 to age 65. If you were the doctor who had only 30 years of possible working as a doctor, wouldn't you want to earn as much as the other doctor? Yes! If that first doctor expected to make $150,000 per year, then the second doctor would have to earn $200,000 per year to be equal. Does that sound logical? To earn that extra $50,000 per year, the second doctor would have to charge $25/hr more. Now, let's add that to the $71.05/hr above and we get $96.05/hr. Compare that to the first doctor who only had to charge $16.13 in total.
In most countries around the world they allow high school graduates to go directly into medical school and graduate by age 25, like the first doctor. I think that if we were to allow doctors to "specialize" in a limited medical discipline from the start, it would have an even bigger impact on lowering the cost of doctors. In a prior blog, I pointed out that a doctor who only does carpal tunnel surgery was not able to practice until they were over the age of 35 when they could have easily been qualified for that limited surgery by age 25. Even Henry Ford figured this out over a 100 years ago to build cars cheap enough for most people to "afford". Why can't our medical system figure this out?
PS--Have you noticed that there are "no" federal medical schools? The cure for our health care cost situation is not in Washington DC, it is in the state capitals. What is needed is for our state governors to step up and over haul our medical schools. Is is the states who license medical doctors, not the federal government. It is the same with the predatory lawyers who plague the medical industry and drive up cost for all of us. If you want change, start putting the pressure on your governor, not President Trump!
One of the main reasons that healthcare costs so much in the United States is because our doctors cost too much. Why do our doctors cost more than any other country in the world? It is because of two factors. Those are the cost of cost and time required to become a doctor and the time that the doctor has left to work to get back the total cost of their education. Simple isn't it? Here are the numbers.
Let's say that we have two doctors, both started medical school at age 20 and one graduated at age 25 and the other graduated at age 35. The cost of medical school was $100,000 per year for each. Each borrowed the money at 5% interest from their local bank. When the first one graduated after 5 years, they owed $552,600 and the other second one, after 15 years owed $2,157,900. Don't believe my numbers? Do your own!
The next step is, "how are these two doctors going to get their bait back?" Let's assume that both work to age 65. That means the first doctor will work for 40 years and the second doctor will work for only 30 years. Again, let's figure that they are still paying the same 5% like you would have with a mortgage on your home. Next, let's figure that both doctors work 2,000 hours per year which is about average for most people. Now, how much "extra" will each doctor have to charge per hour to cover the payment on their education. The first doctor will have to charge $16.13/hr and the second doctor will have to charge $71.05/hr. Is this more than you thought? There is more.
The extra cost that the doctors charged did not make the doctors any richer. It just paid back the money that they had to borrow. We now have two doctors who expect to earn the "same" amount during their lives as doctors, but one only has 30 years to do that while the other has 40 years, from age 25 to age 65. If you were the doctor who had only 30 years of possible working as a doctor, wouldn't you want to earn as much as the other doctor? Yes! If that first doctor expected to make $150,000 per year, then the second doctor would have to earn $200,000 per year to be equal. Does that sound logical? To earn that extra $50,000 per year, the second doctor would have to charge $25/hr more. Now, let's add that to the $71.05/hr above and we get $96.05/hr. Compare that to the first doctor who only had to charge $16.13 in total.
In most countries around the world they allow high school graduates to go directly into medical school and graduate by age 25, like the first doctor. I think that if we were to allow doctors to "specialize" in a limited medical discipline from the start, it would have an even bigger impact on lowering the cost of doctors. In a prior blog, I pointed out that a doctor who only does carpal tunnel surgery was not able to practice until they were over the age of 35 when they could have easily been qualified for that limited surgery by age 25. Even Henry Ford figured this out over a 100 years ago to build cars cheap enough for most people to "afford". Why can't our medical system figure this out?
PS--Have you noticed that there are "no" federal medical schools? The cure for our health care cost situation is not in Washington DC, it is in the state capitals. What is needed is for our state governors to step up and over haul our medical schools. Is is the states who license medical doctors, not the federal government. It is the same with the predatory lawyers who plague the medical industry and drive up cost for all of us. If you want change, start putting the pressure on your governor, not President Trump!
