Why Don’t Female OB/GYNs Make More Money?

There is a nifty paper out looking at the compensation of female obstetricians and gynecologists. Many woman prefer to be seen by a female OB/GYN, but less than half of such specialists are female. To an economist’s way of thinking, those women should be able to command much higher prices.

So, do they? Somewhat surprisingly, not really — or at least they don’t charge as much more as would equilibrate the situation. What happens instead is that the market for female OB/GYNs adjust via two mechanisms: prices for services, and waiting times. And given the how difficult it is to raise prices, especially in managed care settings, the main impact is on increased wait time for patients who want to see female OB/GYNs. You wait and wait and wait …

The trouble is, of course, while the market might be adjusting, it is in a form of little value to female OB/GYNs. After all, you can’t buy LCD TVs with patients’ waiting time.

The upshot: It’s worth remembering that while markets tend to respond to via price — and we have a tendency to assume that is the first and best way — it ain’t always how it happens.

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Comments

  1. Ryan Coleman says:

    I think part of it also has to do with the suggested idea that women tend to charge less then men do for the same services (Study Announcement – August 2006). It suggests women are less likely to be agressive in their pricing especially in sympathetic contexts.

  2. Kyle S says:

    I dunno – to me this sounds like yet another symptom of the broken healthcare system in the US. Here’s my theory:
    Pregnant women usually don’t call up OB/GYNs and ask for price quotes; instead, they choose among the doctors their health insurance will cover. OB/GYNs thus negotiate with insurers rather than with their customers over pricing. The insurer has no incentive to respond to demands from female docs for higher rates; they can just choose male docs and stonewall their customers (most of whom don’t choose their own health insurance, getting it as a bundle with their job instead). Thus, female OB/GYNs are forced to match rates with their male counterparts, despite providing additional service their customers value.
    The equilibrium outcome (longer wait times) emerges when the benefit to having a female OB/GYN is outweighed by the additional time cost incurred. Women who have a high time opportunity cost will choose to see male OB/GYNs because they don’t have to wait. My guess is that if patients paid directly for OB/GYN services, you’d see female OB/GYN rates rise.
    But I haven’t read the paper, so what do I know.

  3. Ken Dyck says:

    Maybe those OB/GYNs could ‘go all Web 2.0-ish’ and get their LCD TVs by blasting ads at their waiting patients.

  4. I believe you are very misinformed about billing and charges in the medicine. While Doctors may want to set a high price tag on their services, they are not in control of reimbursement. Today insurance companies set the fees a doctor is paid for a specific diagnosis. They are prohibited by contract from charging their customers, (and the doctors patients,) more money than the standard deductibles and office visit fees.
    You may want to check out the Maze of Crap we healthcare folks do to get paid starting over at Dr. Bob’s Blog at http://docisinblog.com/archives/2006/07/01/maze-pt-7
    Also you are naive because OB/GYNs practices malpractice train wrecks waiting to happen, because they are usually dealing with 1. Young women in the prime of their life, and 2. Pregnancy. The insurance premiums are normally in excess of $100K per year per doctor. Add to that loan payments for Medical School, a house, car and daycare for their own children and many female OB/GYNs take home less than $40K a year.

  5. Mary Lu — Thanks for the note. Assuming your comment is directed to me, I’m not sure why you think we disagree.
    The whole point of the article and of my post is that the paper points out OB/GYNs don’t have total control over pricing their services. As a result, and given scarcity and demand, the problem shows up in a long wait for female OB/GYNs who are paid less than a free market might dictate.