medical economics

How much do they make?

 Versus how much they owe in loans for education!

The typical physician can count on a bill of nearly 400,000 for post secondary High School education costs.  While some educators may feel that this figure is high, many Physicians might argue that this is low because it does not factor in the costs of living during Internship and Residency.  Whichever, the true costs this is a high no matter which esoteric manipulation lowers or raises this number.

So what can a physician expect to make in the marketplace after the education requirements have been met?

Acording to a study by the Department of Health and Human Services the typical Family Practicioner can expect to make $138,000.00 in 2003 dollars [there are several studies which suggest that while physician billings have grown since that time real income has either remained stagnant or decreased slightly since 2003].

According to the American Academy of Family Physicians study on practice management the typical practice bills for 5720 total unique visits per year.  These visits generate average total billings of $483,500.00 [This represents billing of about $85.00 per visit].

But  the Physician only makes about $25.00 per visit in take home pay. Staff costs about the same amount [typically about 4 full time employees costing the practice with benefits about $33,000.00].  This leaves the overhead costs at about $35.00 per visit.

CME and CMS surveys and reimbursements confirm these figures.  Overhead costs include insurance, billing, collections, bad debt, reimbursement write-downs, rent, office supplies and equipment. 

But the real question is this?  Does a $400,000.00 dollar education investment for a $138,000 dollar job make economic sense?  How many patients will Doctors see per day after health care reform? 

Bill Carroll

Organized Crime?

Tim Allen of the online slightly Liberal opinion provider politico.com has written an article When the Exception Swallows the Rule  about the failures of the Campaign Finance law to regulate the fund raising behavior of elected officials in Washington.  

Then the Washington Post admitted that it has been selling access to Washington Lobbyists and their Union, Non profit, Special Interest and Corporate clients.  Access cost $250,000.00 per attendee at special off the books and record Salons which were held at the publishers home.  The "fee" provided the lobbyists clients access to White House top staffers along with law makers and staff from the hill.

How the fees were then distributed and "shared" is unclear and still developing.  But it is increasingly clear that as our system is returning to the ancient system of centrally controlled economic and political domination of individual activity with government power, our politicians use the power they have for their own financial gain.

One only has to consider two such politicians [one from each party] who started their political careers poor and worked exclusively in public office but then retired as multi millionaires.  Where did they get the money?

Consider the two Presidential nominees of the 1996 presidential election.  Bill Clinton, taught in law school served as the Attorney General of Arkansas, then was the Governor of the State, and ran for Federal Office as a multi millionaire.  Robert Dole was so poor that his family lived in the basement of a rural home in Russell, Kansas  After his education was completed Dole served in state and county office until he was elected to Congress in 1960. 

How did these two become millionaires?

No one really knows.  The Clintons expalined it by referring to Hilary's investment activity but almost all of the Clinton investments were losers.  One possible explanation is the above referenced news about selling access and politicians accessing their excess campaign cash for personal use.

Political campaigns are big business and those who are involved in them make millions in conducting them and in raising the campaign funds.  We all know that both Pat Buchanon and Ralph Nader have been perennial independent candidates for President.  Casual observers ask why?  But the news media with the Washington post being one of the longest lasting leaders have never dealt with the reasons.  Why?

If the candidate gets access to his funds and if a Presidential candidate gets access to Federal Funds as some have in recent years.  That is one explanation that has never before been probed.  Maybe the Washington Post will tell us what the politicians did with the unreported cash they raised in their Salons.

Olympics economics

Going For Broke

Why Politicians go for Olympic “Gold”

In 1976 the city of Montreal went broke sponsoring the Olympic Games. The event was such a disaster that the city ran out of funds to build the Olympic Stadium and it was never completed. The final debts were settled after 30 years of payments in 2006.

Athens, 2004 was even more disastrous. According to Money Week the total debt from the Olympic expenses that year equaled 4% of the total Greek GDP but that the Olympic debt equals 100% of the countries total GDP. As a result Greece was placed on economic probation and all lending to the government was suspended by the European Union.

The next Olympiad is scheduled for London in 2012 and indications are that there is a disaster looming there as well.

While we all are sorry that Chicago failed in its bid and we want to congratulate the citizens of Brazil some of us are privately saying its better to visit Rio in 2016 than to see our children burdened with more of this type of debt.

Why do political leaders place so much hope in these events? Why do they fail so spectacularly? And what turns the perfect plans into debacle?

One simple answer is the nature of planned economies. As the USA turns to a centrally planned economy we can look to the Olympic failures as one more reason that there are skeptics about the future. All of the cities and countries viewed the Olympic experience as a way to infuse capital into their systems. Then when they attracted the capital they diverted it to social spending and lost sight of the fact that the capital had to be paid back from revenue.

In effect the government planners spend the revenues twice. First they spend it on social engineering projects then they need even more cash to pay back the banks and other governments that made the original capital loans available. Many times the projected costs of construction triple as local governments struggled to comply with their own regulation on construction and private developers.

Finally tourism dollars actually go down during the event as the athletes and the teams crowd out the normal tourists. Thus the businesses in the host city actually lose money during the event.

Looking at London you can see the train heading for the wreck as many projects are well behind schedule and the London Development Agency is spending its capital on the development of “Green Jobs”. Their goal is to use the site after the Olympics leave to help replace the estimated one million industrial jobs London has lost since 1973. So far, the committee has developed a tourism project which provides tours of the area to London area Elementary school children. They must be tired of the same old “Tower of London” and all of the other British Museums. Now they are going to have a tour of the old Industry “thing?

It begs the question ...why not invest capital into new industrial jobs? Is hard work for the semi-skilled a “thing” of the past for London?

The other reason governments want Olympics is quite frankly it is a rich source of political pay offs for cronies. Dr. Frank Zarnowski, political economist has noted that even the so called “best run” Olympics”, The 1984 LA Games, was riddled with 73% of the overall costs going to nebulous “administrative” costs.

The Olympics are fun to watch but no one wants to pay the ticket price for them. If you want to see them live have a good time in London or Rio.