Among the more enduring legends of American folklore is the rise of the physician - studying for years, sacrificing, working long hours and, ultimately, cashing in.
A recent survey by the Department of Health, Education and Welfare of hours worked and reported incomes earned for physicians in 1975 found that those in five specialities - general practice, general surgery, pediatrics, obstetrics/gynecology and internal medicine - worked an average of 58 hours a week and earned an average net income before taxes of $53,614 a year. The highest earners were obstetrician/gynecologists, who averaged $64,562 a year.
What doctors make and how they make it is a subject likely to come under increasing scrutiny as the Carter administration moves to restrain the rising cost of medical care - $139.3 billion and 8.6 per cent of the gross national product in 1976.
Even though the number of physicians has grown in the last decade, the amount spent per capita on physicians has grown faster - an average of 15 per cent a year between 1965 and 1976.
Some economists believe that physicians have the unique ability to influence the demand for their services.
"Many within the American economy attempt to influence demand," according to a recent report of the National Commission for Manpower Policy. "Few, however, succeed in doing so in as effective a manner as is the case with independent health professionals. It is not surprising that physicians are able to succeed where others can only wish for success. Consumers bring a high degree of concern, even fear, to the encounter with the physician. The physician sits as the supreme expert on matters of great consequence to the patient."
Among economists the theory is known as "supply-induced demand for their services in order to increase their income.Adherents of the theory point to higher rates of surgery in communities and countries where there are more surgeons per capita than in others, to studies showing that physicians with X-ray equipment perform more X-rays than physicians who have to have an independent laboratory to the work and to the ability of some physicians to maintain a relatively high income despite a relatively light work week.
Uwe Reinhardt, a Princeton economics professor who has written extensively on the subject of physician supply and income, has observed that in West Germany, where the physician-population ratio has increased rapidly in the last decade, the incomes, has observed that in West Germany, where the physician-population ratio has increased rapidly in the last decade, the incomes of physicians have not lowered.
In fact, according to Reinhardt, the incomes of West German physicians are higher than those of American doctors. "Increases in fees account for only a part of this . . . growth in physician incomes," Reinhardt said in a paper delivered last fall. "The bulk of this increase has come from the delivery of minor medical, X-ray and diagnostic procedures per patient treated."
German physicians have shifted away from time-consuming procedured toward laboratory and diagnostic tests "at an astounding rate," - a 257 per cent increase for diagnostic procedures and a 90 per cent increse for X-rays between 1965 and 1974 per patient treated by physicians in private practice began to equip their offices with technical equipment or joined with colleagues in the establishment of profit-making, physician-owned lab-cooperatives," according to Reinhardt.
As Reinhardt and others have pointed out, however, an increase in the use of physician creating demand for their services but rather their filling a previously unsatisfied demand.
Thus, the theory of supply-induced demand as an explanation for the behaviour of fees and incomes for an entire medical sustem remains only a theory, although it is widely held one.
The HEW survey of physician income conducted merely to get more accurate information on what physicians earn, may also provide some support for adherents of the theory of physician-induced demand.
The survey confirmed earlier findings that reported physician fees tended to increase as the number of physicians per capita increased.
Thus, where fewer than 50 physicians per 100,000 persons practice, the average reported fee was $9.20 for an office follow-up visit. The fee increased steadily to an aaverage of $23.28 in areas where there were 150 to 200 physicians per 100,000 persons. On areas of 200 physicians or more, the average fee slipped to $11.97, below the 150 to 200 physician level but higher than the $11.11 charged in areas of 100 to 150 physicians per 100,000.
An HEW economist took into account the higher costs of living in metropolitian areas where physicians cluster and found that fees still were higher in those areas.
The HEW survey breaks the earing down into a number of categories; group and solo practic; incorporated and unincorporated practice.
According t the survey, 70 per cent of the physicians inthe five specialties reported earnings between $35,000 and $75,000, with about 22 per cent saying they earned between $45,000 adn $55,000.
Urban doctors earn an average of $54,184 compared to $45,465 for ural physicians.
Of the total, 3 per cent worked less than 40 hours a week and earned an average of $52,500. Another 24 per cent worked 41 to 47 hours and earned $55,500, 57 per cent worked 48 to 50 hours and earned an average of $53,300 and the remaining 16 per cent worked more than 50 hours and earned $52,200.
Rural pediatricians worked the most number of hours - about 65 - while urban pediatricians worked the least - about 54. The average number of hours worked for all doctors was about 58.
Physicians practicing in groups of between two and five members reported earnings of about $62,000 a year; those in groups of six of more earned about $49,000 for solo practioners. The highest earnings of all were reported for obsterician/group - 5,000.
The survey found that general surgeons worked more hours (about 60.6 per week) than doctors in other specialities, pediatricans worked the least . . . 55.5 hors per week - according to the survey.