Last month was the National Bureau of Economic Research Summer Institute, a three-week research-fest where economists from around the world come together to unveil and discuss hundreds of new studies. One of the most interesting to me was called “Who Values Human Capitalists’ Human Capital? Healthcare Spending and Physician Earnings” by Joshua Gottlieb, Maria Polyakova, Kevin Rinz, Hugh Shiplett, and Victoria Udalova.

The authors combined administrative tax records from the U.S. government with information on nearly all of the more than 800,000 U.S. physicians to do the biggest study ever on how much physicians earn and how government payments influence their earnings. Not surprisingly, docs make a lot of money, and how much depends on their specialty and location. They found a lot of other interesting things in the data too, including estimating that if doctors’ salaries were reduced to match those of lawyers, it could reduce national health care spending by about 2%. (You can read a non-technical summary of the paper’s full findings here).

The most exciting thing for me about this study is that these data come from all doctors in the U.S., not just a select sample of doctors who choose to respond to surveys. With such detailed individual-level data on doctors’ salaries, questions about gender and race differences in physician income can now be definitively answered; the impact of hospital, physician and insurer consolidation on physician earnings can be rigorously studied; and we can study how income shocks affect the treatment recommendations that doctors make. 

Bapu Jena is an associate professor of health care policy at Harvard Medical School, a physician in the Department of Medicine at Massachusetts General Hospital and a member of the 2021 Tradeoffs Research Council. His research interests include the economics of physician behavior and the physician workforce.