Physician Remuneration: Boondoggle or Bust?

Abstract

Factors that determine what people get paid for their efforts and talents are obviously complex. In a free market economy the price of any product or service becomes the level at which the demand just keeps the marginal producer in business. Scarcity, quality and the economic productivity of the item all tend to raise prices. Whereas competition and abundant supply tend to keep prices down. In a controlled or socialistic economy, on the other hand, these factors are distorted or superceded by political pressures to provide artificial price supports and subsidies. Rate controls may be imposed to keep prices below what might be paid in a market of scarcity. More often, however, these so-called controls keep prices elevated beyond what would be sustained in free competition. The extent to which the consumer/taxpayer should be expected to underwrite above-market prices for the sake of society’s broad interests is a matter of endless debate.