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I believe that health care providers aren’t paid anything close to what they are worth to society. I don’t mean this in the sappy emotional sense in which the “value of any human’s life is infinite,” or any other subjective standard. I am talking about real world, measurable economic impacts. Using the entrepreneurs’ 10% reward as a guide, health care providers create astronomical value for which they are paid a small token.

In 2016, self-made billionaire Naveen Jain asked and answered: “If you want to make $1 billion, all you have to do is solve a $10 billion problem.” That 10% reward for an entrepreneur’s creation is a useful rule of thumb: Jeff Bezos is worth $100 billion because he created a $1 trillion solution to retail sales.

I applied this scale to a hand surgeon using a real-world patient — me — and was surprised by the results.

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In 2017, I fell off a ladder and sustained a comminuted intra-articular distal radius fracture in my dominant arm — OK, I broke my right wrist. Without a functioning right wrist, my career as a pediatric orthopedic surgeon was over. No more slinging mallets, turning screwdrivers, operating drills, and the like. The result of a permanently nonfunctioning right wrist would be instant retirement.

I got lucky. One of my partners, an incredibly skilled hand surgeon, stopped his Saturday afternoon bike ride, met me at the hospital, and spent three hours putting everything back where it belonged with a plate and 11 screws. I healed in about five weeks and actually didn’t miss a day of work, even though I couldn’t operate until my cast was off.

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Let’s look at the total compounded cost to society if my injury hadn’t been treated or was mistreated. Each year, the work I do generates about $1.5 million in revenue for my practice. Ignoring the effects of inflation and assuming that I work at my current pace for another 15 years, the total earnings for my practice until retirement at age 65 would be $22.5 million. With an untreated wrist fracture, my fall would have given me a $22.5 million problem. But my hand surgeon completely solved it.

Had he been paid at the entrepreneurial scale of 10% of the value he created, he should have been paid $2.25 million to fix my wrist. Instead, after coding and processing the surgery, his bill was about $2,250, which would have generated a payment to him of about $1,000, or 0.0044% of the value of his work. How is that for being underpaid?

But it actually goes further, because that’s just the value of my work to my practice. What if I take into consideration the value of my work to society?

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I fix clubfeet, hip dysplasia, and other problems. I help turn potentially disabled infants and children into healthy, productive adults with entire careers of productivity ahead of them. On average, they can expect to earn nearly $1.9 million each over a 40-year work life. Then there’s a disability cost associated with not fixing these problems: Assume a cost to society of $20,000 per year for 75 years, and that’s another $1.5 million. So for each patient I treat in infancy with an otherwise totally disabling condition, I save society more than $3 million. Multiply that by the 1,000 or so patients I operate on each year, and multiply that by 15 years, and my future work has a total economic impact of $45 billion.

According to the entrepreneurial pay scale, my hand surgeon should have been paid $4.5 billion. But he was paid only $1,000, meaning his work was undervalued by a factor of 99.999978%.

I know there are limitations to this argument, including the difference between calculated and actual market value; assigning all of the value to the surgeon while ignoring the contribution of other entities, like the anesthesiologist, the hospital, and the implant maker, to name just a few; and not including other medical specialties. I recognize and at least partially concede all of these points, but have ignored them for brevity and simplicity. I look forward to seeing these points discussed in the comments.

Of course, there’s another way to look at the issue. Maybe the entrepreneurial pay scale is what’s completely out of whack, and my hand surgeon’s payment for fixing my wrist is the right way to look at things. Through that lens, Jeff Bezos would be worth $22,222 for creating Amazon, not $100 billion.

It is hard to imagine that Amazon would exist if that were the limit of the reward for creating it. Instead, it seems to me that health care is highly undervalued. While popular media focus on advancements in industrial capability when assigning credit for economic growth, it is important to remember that per capita gross domestic product in the U.S. grew from $8,342 to an inflation adjusted $52,591 between 1916 to 2016. During the same period, Americans’ average lifespan increased from 54.2 years to 79.1 years. A 46% increase in lifespan attributed to improved health care certainly deserves a large share of the credit for a 530% increase in per capita productivity — maybe even enough to justify the current health care cost of nearly 18% of gross domestic product — about $3.5 trillion per year.

My fall off a ladder had a profound influence on my understanding of value in health care. There is simply no doubt that I (and society) made out like a bandit in the exchange of goods and services between my hand surgeon and me. I try to make things up to him whenever we are out by buying him a drink and letting him know how much I appreciate what he did for me and for the thousands of kids I treat. His other patients, and society at large, should also show their gratitude. But they largely don’t.

In fact, not only was he not paid the $4.5 billion that my math shows he earned, he wasn’t even paid the $1,000: He never turned it in to billing. How’s that for professional courtesy?

Jay Crawford, M.D., is a pediatric orthopedic surgeon and the founder and CEO of a software company that optimizes scheduling for surgical practices and hospitals. He no longer climbs ladders and is grateful for the dedicated work of health care providers, but is particularly grateful for the work of hand surgeons.

  • There is only one Jeff Bezos but there are many surgeons who can treat your patients. Your marginal value is likely much less than even the $22.5M you’ll make so you should write a thank you article to the Specialty Society Relative Value Scale Update Committee (RUC) instead.

  • I am a retired cardiac surgeon & absolutely agree with your assertion about the undervalue of Physician’s.we need to look at the whole structure of the medical education and the training & subsequent practice.There are physicians who refuse to provide care for the Medicaid patients,well knowing that society paid for their education & now they shun those vulnerable members of society.
    When I was in private practice there were several cases of aortic dissections that commercial insurance inadvertently sent me the payment of $15,000 but having signed up with managed care group they paid me $2000 after I returned the original cheque to them.They pocketed the rest while I did bulk of the life saving procedure.I never complained because it gave me a great pleasure to save a precious life & the family was greatful.Surgery was not about money but it was a calling in life to care for anyone who is in distress.
    I am a firm believer that to keep an active license it should be mandatory to treat all patients, whether one has commercial insurance,Medicare,Medical or uninsured.Since the society as a whole paid for the physician’s education,the least thing to do is to return that favor in turn to society.Sad that too many physicians think it is below their dignity to serve the under or non insured members of our society.Tragic & sad state of affairs.

    • Society did not pay for my education and training. That was all me. And I am currently paying for the education and training of my daughter in medical school at the rate of about $100,000 per year.

    • If the hand surgeon only would have gotten paid about 1,000, I am trying to figure out how Dr. Crawford, generates about 1.5 million, and not only that, feel so entitled to it. Obviously his fees must be very high, and to generate that revenue, he only treats those who can pay them. That is the essence of our nation’s healthcare problem.

    • Society did not pay for my education and training. That was all me. And I am currently paying for the education and training of my daughter in medical school at the rate of about $100,000 per year.

  • Your colleague is your friend, and you also have professional courtesy. Yes, you are one of the lucky ones. This touches on the current debate on health care, where our nation had the most advanced health care in the world, and the fewest number who have access to it.

  • Yes, this was your colleague who treated you for free, and you get professional courtesy. Yes, you are one of the lucky ones. This preferred treatment you got does not even touch upon the problem of access Americans have to reliable health care in this nation. Our nation has the most advanced health care in the world, and fewest people who can access it.

  • This is a very basic misunderstanding of economics and not understanding that societal value does not equal economic value. By his logic teachers will be millionaires. What about the mechanic that fixed his car so he can get to the hospital; the road worker that kept the highway clear?

    Alternatively, should he be paid $10 for the same procedure that is done on an addict that will potentially contribute nothing to society.

    Here is a better idea, we pay doctors like a lot of other professions – set salaries.

    • Dr. Crawford, why don’t you respond to his (and basically everyone else’s) overarching comment: that this article demonstrates a fundamental misunderstanding of economics and reeks of elitism.

    • As someone who early on tried to engage you in (what I thought) was a respectful manner, only to have you not address any of my points, frankly I’m happy to see the level of criticism you’ve gotten from your column since then. Your “$10 for washing out an addict’s pus-filled arm would actually be a $10 raise” comment here truly does illustrate your contempt for people in need. Do you feel the same way for nurses aides that clean patients or other kinds of work in the health care field? I was way to polite to you. Jay is completely correct, you do reek of elitism. You fit the stereotype of a Doctor with a God-complex, having an ego that thinks your overall contribution to society is $45 billion and you deserve a 10% cut.

      Yet your incapable of addressing the fundamental criticisms aimed at your opinion piece: That things are very complex and far, far to many factors determine one individual’s “societal value” for a specific act.

      It is ironic that you wrote what I’m sure you knew would be a provocative opinion piece, but you feel there is “no purpose” in defending it against both thoughtful and spiteful criticism. For those of us who feel your opinion amounted to nonsense, we will feel very smug in believing that you got schooled and your unable to defend your silly ideas about your self-worth.

  • Yes he was paid but more appropriately saying it was nullified similarly I read your article but wasn’t paid a dime. The education s/he was earned largely because public money is associated with it. The chamber/building s/he was sitting/living wasn’t paid high enough that the labor was supposed to get. Largely because class based capitalistic society. I request you not to become short-sighted and consider your own professional benefits. See through the lens of whole and give holistic view.

  • jay, it’s a provocative thought and the whole thing seems wrong. Where does the extension end for you. Do you tell your wife that you won’t be changing any more diapers for fear of transmitting infections. Can opener… no, cutting the thanksgiving turkey, outsourced. I guess my point is that you’re not special. You didn’t fall off a truck armed with these skills. Someone taught you. Aren’t they also valuable? Yes you can do the procedures but what if your complication rate is higher than another orthopod. Just because it’s what your charging, it may or may not be what you’re worth. And finally, I don’t discount that the MDs should be paid more. It’s our feeble and clunky health care insurance system that is adding to your billions in charges since your office staff has to talk to the staff at the insurer. It’s a Byzantine system that spends more on hospital admin than on either patients or MDs. Last comment, the nurses and PAs they have an even larger claim on underpayment.

    • Why not compensate physicians like any other professional, by time spent at a rate determined by their specialty, experience, and reputation? It would be much more efficient to track my time than code a visit and patients would understand the bill!

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