How can America cut its healthcare costs? The question is generating political heat in Washington right now. No wonder. Healthcare spending now stands at an eye-popping 17 per cent of US gross domestic product. And next year, President Barack Obama’s divisive “Obamacare” reforms will take effect, extending insurance to a much wider part of the population than ever before.

But as politicians trade ideas (and insults) about cutting costs – with proposals ranging from better use of information technology through to insurance exchanges – there is another issue that needs to be discussed: doctors’ pay.

In recent years, doctors in America have received relatively high levels of remuneration, running about 60 per cent higher than the industrialised world average, according to data from the Paris-based OECD. But the absolute pay level is not the key issue at stake. What really needs to be debated is the system of incentives.