They spend years mastering their skills and work tirelessly to help other people. In return, they often can enjoy a great life-style coupled with steady and generous flow of income. No wonder why being a doctor is one of the most coveted and well-respected professions in almost every country. Given the recent interest in health care costs due to the US election, we thought it would be interesting to dig into how much doctors make in different countries. This issue is particularly interesting because Singapore is a popular destination for “medical tourism” due to their high quality and low cost of medical services. Is healthcare cheaper in Singapore or other Asian countries than in the US? If so, why? Doctors in the US Make About 100% More Than Their Counterparts in Asia To answer this question, we’ve collected our data from various sources from each country. While comparison is not always apples-to-apples, we believe these provide some level of indication that real difference in physician income exists between the US and developed countries in Asia. Medscape is a leading website in the US that delivers medical news to physicians and healthcare professionals all over the world. It surveys thousands of physicians in the US each year to measure their compensation and working conditions. In 2016, their survey of almost 20,000 physicians showed that average annual income for physicians in the US ranged from $443,000 for orthopedics to $204,000 for pediatrics. Family medicine was also at the low-end at $207,000. Data from Payscale, a database of annual income by professions, also puts average income of physicians around $200,000. The average physician income in the US is about 100% more than what doctors make in other countries like Singapore, Korea and Japan. According to Payscale and Salary Explorer, general practice physicians in Singapore make about S$96,499-S$109,668 per year equivalent to around $70,000-$80,000 in USD terms. Not only that, Singapore Doctors Directory shows that annual salary for senior specialist doctors at hospitals is capped at S$300,000, equivalent to $217,517 in USD terms, less than half of what orthopedic surgeons make on average in the US. Survey result in Japan was similar. The Ministry of Health, Labour and Welfare of Japan surveyed 71,500 physicians in 2014 about their annual income, and it came to about JPY 11,540,000 per year, equivalent to about $111,571 in today’s USD terms. While data in Korea is less clear, a well-made documentary by TvN, a popular TV station in Korea, showed that the highest average income by specialty was KRW 225,360,000 ($200,194) for ophthalmologist (i.e. eye doctors) while the lowest was KRW96,000,000 ($85,280) for family doctors. GDP per Capita Why do doctors in the US make so much more than doctors in other countries? Difference in GDP per capita doesn’t seem to paint the full picture. For instance, Singapore has roughly similar GDP per capita as the US. Not only that, the ratio between average doctor income (for family physicians) and GDP per capita has significant difference between the US and other countries. In the US, family medicine doctors make roughly 4x the GDP per Capita, while same doctors in Singapore or Japan make 1.5-3x. Supply & Demand To examine whether supply of doctors relative to population is causing this discrepancy, we took at look at the density of physicians by country. Higher physician income in the US may be caused by shortage of doctors. Surprisingly, however, density of physicians was higher in the US than the other countries in our sample. As of 2013, US had roughly 2.7 doctors per 1,000 people, while the same ratio was around 2.2-2.3 for Singapore and Korea. Quality of Service One may think that the quality of service might be much superior in the US to other countries, leading to the difference in physician income. However, Quality of health care does not seem to be a factor either. According to the World Health Organization’s ranking of the world’s health care systems, Singapore ranked #6, Japan #9 and Korea 58, compared to the US at #37. Medical Malpractice Insurance Unlike their counterparts, physicians in the US often face huge risks in medical malpractice lawsuits, and spend quite a bit of sum in buying medical malpractice insurance. However, the cost of this insurance, which ranges from a few thousand dollars to $40,000 per year depending on location and specialty, does not fully explain the difference in annual incomes that can be as wide as hundreds of thousands of dollars. Other Possible Reasons One difference that we noticed about healthcare systems in these countries is that patients pay for their treatment at the hospitals at the time of their treatment. Because of the way healthcare systems operate in these countries, doctors and patients are in close touch regarding what treatment is going to be done and how much it is going to cost. The US healthcare does not operate this way, mainly due to the way healthcare insurance has been set up. Therefore, patients often leave hospitals without even knowing what their treatments actually cost because insurance companies have a huge impact on how much things cost and what patients need to pay out of pocket. It may be possible that this difference could explain why healthcare is costlier in the US (and physicians make more money consequentially)than in other countries. In Singapore or Korea, doctors have to compete not only on service but also on pricing because prices are very visible to patients. In the US, however, pricing is rarely visible to patients because of the way healthcare insurance & payments have been set up in the country. True, pricing is not the only important factor in choosing a doctor; reputation and level of service matter just as much, if not more. However, when patients don’t know about pricing at all, they are also more prone to select their doctors without much regard to cost. Source
