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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.

  • Right on, Brother! Compare your earnings to the pay received by hospital administrators, insurance company execs and government bureaucrats. We phyisicians drive the whole thing, and these parasites make more money than we do.

  • Was it worth risking $45B (not to mention the children whose lives would not be helped because of your disability) to climb up the ladder from which you fell? If you were climbing up the side of a burning building to save people from dying, then good for you. If it was to change a light bulb, you might have been wise to pay somebody to do that, and continue to save the world through your work.

    Lots of people work hard and positively impact hundreds of lives. That is, in part, its own reward. We all (even family doctors) get paid well. Go cry in your bucket of money for not making more. And be careful not to slip on your tears — you may break your other wrist.

  • Provocative article. Another take: Jeff Bezos’ comment is not actually how people get paid. Yes, the problem you solve is a big factor determining whether or not someone is willing to compensate you. But more important is the business model in which one works. Bezos owns a company that solves problems for millions of people each week. He sits atop a giant pyramid of problem-solving. (I don’t begrudge him for this. He created the company.) Somewhat similarly, the NBA basketball player, pop musician and movie star are all creating entertainment for a large paying audience. Their problem-solving is highly leveraged in that they perform a task once and lots of people buy that performance.

    The clinical physician is embedded in a very different business model, that of an individual craftsman. They solve problems one person at a time and have to be present to do so. There is no leverage to their work. With only so many hours in a day, this model is a constraint on compensation. I’m not suggesting there is a way to change the model; the individual craftsman will always be constrained by the one-at-a-time structure. Sure there are ways to tweak one’s compensation as a craftsman. You can step outside the insurance payer system. You can lobby lawmakers to shift money to primary care. But the model will always be a governor.

    The only way for a physician to earn anything like Bezo’s pay is to work outside of the craftsman model, such as a physician owner of a large organization (think Dr. Tom Frist) or create a wildly popular website with a large paying audience or physicians who invent successful medical devices (and maintain ownership or royalties). The author, Dr. Crawford himself is the CEO of a software company. Chances are, if he is really successful within his software company (meaning lots of folks buy his product or service…and I’m assuming he has an onwership stake), his compensation could be dramatically greater than his orthopedic craftsman practice. It’s the model.

    • You hit the nail on the head, Dave. So many read the article (which was intended to be very provocative, not literal, from the beginning) and responded with their gut, not their brain–which is fine because it earned a huge audience. Thanks for the mature and intellectual response.

  • I too treat children with congenital and developmental deformities (of the Craniofacial region). I find the proposition presented unconvincing. However the issue presented in a slightly different context has disturbed me for many years.
    The issue is one of profound significance. It is incontrovertible that we live in a world in which we make judgments every day of the relative valued life issues. This is incontrovertible eg. the monetary system. Each decision we make is based on a value scale.1dollar, 10 dollars a million dollars. One hour ten hours of my time. Essentially what is it worth to me. And in this mix we can include if you like the essence of fair share of obligation.

    I assume everyone reading this agrees so far. If you do not please tell me what world you live in.

    The greatest amount of volition spending goes to entertainment gambling and sports. All of the money and TIME devoted to these endeavors is made freely and with full choice. There are many other areas of our lives that share the same circumstance regarding our daily CHOICES. They are examples of our value assessment. Think about a person upon graduation being offered 15 million dollars to play for a professional sports team. All of that money is contributed from the volition spending of the population.
    It represents a vote of our relative values.

    Every one should contribute their fare share. OK. If I render a service such as surgical care for a person who in not in a position to pay for what ever reason the accepted fair fee, say 30 thousand dollars, but is mentally and physically capable of rendering a service such as gardening contribute such a service for me in return or is that demeaning while my service, working for nothing is not?

    You may disagree with some of my examples. But explain to me your relative value construct. There is no doubt you have one and you use it every day in the way you spend your money and time.

    Thank you for reading this.

  • The money is there, it’s just being taken by “executives”. The surgeon is supposed to get $50,000 for his/her services. By the time that meat is dragged across the piranha-filled river, they get the $1,000 bone while hospital administration, insurance execs, and politicians and lobbyists get most of the money we generate. There is only one solution. You have to separate yourself from the system. Very difficult, especially for specialists. I generated $2 million in one year recently on my back alone for one of the many greedy pigs we work for. I was paid less than 7% of that. I took that beating for 15 years. Opened my own private practice – cash only, no medicaid, no medicare, no insurance. My services are 70-90% less than hospital charges. My second year in, I’m on pace to make 5 times what my highest salary was. It can be done, but we all have to quit being bullied by the system.

    • GREAT! Just what I needed to hear. I agree with you, every word. I too will be going cash only very soon and I know it can be done your words are pure encouragement. Best to you….

  • It is so rewarding to place a newborn on a Mother’s tummy after caring for and delivering her! This, and caring for those in need is of such value as to cause many physicians to enjoy helping others in spite of the shortfall in many cases! What is sadly negative is the legal attack for those efforts for sometimes the most minor infraction that can occur! Go for the good as Dr. Jay Crawford has done, because it blesses so many!

  • so once again interesting a surgeon gets all the kudos. but we in the trenches of family medicine get bumpkus and using that formula, how healthy do we keep many pts upright to do their jobs, make income and pay taxes. healthcare is broken it pays too much for some stuff and not enough where the real meat of medicine is. is it any wonder at primary cares’ demise. I say let it continue and lets see if the market fixes this conundrum. but for now lets continue to reward our fine specialist[oh wait I am one too] and celebrate them. want a conversation stopper when one finds out what kind of physician I am and I say family medicine .conversation over….but when I sit with colleagues in derm or orthopedics the conversation flows. plus add the terrible ROI on primary care and its demise will only accelerate………… and I am sad at that.

    • I had a patient in his mid-50’s come in last month who suffered a heart attack earlier in the year, and underwent emergency bypass surgery. His cardiac output is poor due to the damage, and he may or may not last a few more years; we’ll see.

      The interesting part is that when he was in his mid-30’s, he had seen a cardiologist due to some palpitations which proved simply due to too much caffeine, and the cardiologist had told him his LDL of 63 or so was ‘great’, his homocysteine of 18 probably didn’t matter, and he was fine. I disagreed that he was fine, because his LDL-P was 2300 or so, and we were learning that homocysteine was indeed a risk factor and should be controlled. I persuaded him to take a statin and folic acid, which brought his LDL-P down to 900 or so, although it was a few years before I learned through more testing that he needed methylfolate instead of folic acid, finally dropping his homocysteine below ten.

      His wife, at the last visit, could not stop singing the praises of the cardiologist – “he saved my husband’s LIFE…!”

      Yeah – he added a few years, maybe more, but no mention of the decade or more that my less-dramatic treatment probably delayed his disease becoming severe.

      Like in the cartoons, the glory and gold goes to those who untie the damsel just before the train runs her over, not to the ones who keep her off the tracks.

  • Excellent perspective on how we providers are being under paid and under appreciated. Looking at the consequences from another angle, in the last 15 years the mortality of white males aged 35-65 has increased 15 %. You get what you pay for when the best and the best and the brightest figure out what you just articulated and vote with their feet.

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