The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 14

According to the American Medical Association, physicians in family practice have experienced a decline in their average incomes in recent years, while medical specialists' incomes were rising. Surgical specialists have been doing best of all, and their average incomes are now about twice what generalists earn.
(a) Much of this difference in income arises from long-established differences in the fees paid by insurers for various medical services. The American Society of Internal Medicine claims that insurers' fee schedules are unfair. How would you decide on the validity of such a claim? What is a fair way to determine the relative worth of a successful surgical procedure against that of an accurate diagnosis followed by an effective prescription?
(b) Surgeons justify their higher incomes by claiming that they spend four more years in school than do general practitioners. Do four additional years in school justify higher fees because it's costly to attend school, or because those extra years in school improve knowledge and skill levels?