Health Care Protectionists Cannot Even Envision Trade
Imagine a front page Washington Post article that talked about how the United States had a shortage of small cars. The article would talk about the limited capacity of the various small car assembly plants in Michigan, Ohio and elsewhere in the country. It would then discuss the amount of lead time needed to build new plants. It would also talk about the need to raise small car prices because it is so much more profitable to build big cars.
Imagine that the article never once mentioned the possibility of importing small cars. That's the front page Washington Post (a.k.a. "Fox on 15th") editorial warning readers that: "Primary-Care Doctor Shortage May Undermine Reform Efforts."
Yes, the United States already has a shortage of primary care physicians. Any serious reform plan will make this shortage worse by cutting back our excessive reliance on specialists. However, primary care physicians can be trained (to our standards) anywhere in the world. There are millions of very smart people in the developing world who would be delighted to train to U.S. standards and work for the $170,000 year (net of malpractice insurance) that our primary care physicians. (Developing countries could train 2-3 physicians for everyone that came to the United States if we placed a modest tax [e.g. 10 percent] on the earnings of foreign-trained physicians and repatriated it to the home country.)
If the Post were not such an ardently protectionist newspaper (don't they know about Smoot-Hawley and the Great Depression?), it would be writing about the potential to increase the number of foreign trained primary care physicians in the United States by removing legal and professional barriers. However, trade never even enters the Post's discussion. It was only interested in telling readers about problems with President Obama's health care plan.
--Dean Baker
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COMMENTS (22)
"Any serious reform plan will make this shortage worse by cutting back our excessive reliance on specialists."
Maybe the plans currently being considered would make the shortage worse, but a really serious plan would address this shortage, for example by training more primary-care physicians. Lots of Americans would like to make $170K/year, so lack of people aspiring to be physicians is not the problem. Could it be that the influence of the AMA prevents the expansion of education for physicians?
Actually, this situation is an indication of how little physicians' compensation is determined by a free market. If there is a shortage of primary-care physicians, their compensation should go up and more should go into the field. But physicians don't compete on the basis of price for their services, or really on quality either since there is no way to rate physicians' performance. Health care is just not a field in which markets work well, even without the distortions of patents, protectionism and other things that Dean frequently discusses.
Opponents of unions, by the way, rarely include the AMA in their criticisms. The AMA is a kind of guild whose primary objective is the financial benefit of its members - it is not a public-service organisation.
Posted by: skeptonomist | June 20, 2009 9:45 AM
There analogy of cars doesn't quite work because the dirty secret of specialists is that the majority of them are also trained as primary care physicians. Thats why they are appropriately termed "sub-specialists" - they (we actually) have taken our speciality training in internal medicine, done a little more training and now only see lucrative patients.
A better analogy is if there weren't enough mechanics to do general repairs on commuter vehicles- but there was a huge number of mechanics tweaking Porches, BMWs and Mercedes. Those same "specialty" mechanics could fix a GM pickup, but as long as there is work that pays twice as much will choose not to.
Loosening up immigration laws will only work if it comes with a prohibition against allowing those same foreign physicians from moving into specialty care, otherwise they will simply gravitate towards lucrative procedures like everyone else. Should we allow landscapers to immigrate, but only as long as they cut grass and weed, but stay away from complex tree-trimming?
Posted by: Foobear | June 20, 2009 10:19 AM
I'm thinking along the same lines as Skeptonomist. How is it that foreign countries can produce two or three physicians for every one we produce? The fact is, the AMA and accreditation agencies are cartels empowered by the government to limit the number of doctors.
It seems strange to argue for importing doctors rather than actually strike at the root cause of our shortage. We should reduce barriers to entry for both medical schools and doctors.
Set the standard, and then let competition figure out how to meet that standard at the lowest cost.
Posted by: Steve | June 20, 2009 10:57 AM
Ah, but Dean, you have to remember that you're never allowed to win these arguments (BTW, you're getting almost Friedmanite in your dismissing of the AMA, well done!).
One of the ways that the NHS (for those who don't know, the UK's Government run near monopoly health care system) does indeed work is that it imports huge numbers of already trained doctors into itself (and nurses).
They do tend to be specialists rather than primary care (what we call GPs) for language reason perhaps, but it's a significant portion of the total.
And quite rightly, as you point out. For it's beneficial to the Doctor and to the general population.
However, what we then get from the roughly equivalent point on the ideological spectrum to yourself (ie, a good few paces left of centre) is that we are denuding Africa of doctors, that we are stealing their human capital and their training budgets.
As I said, you're never quite able to win these arguments. Whatever position taken will always be subject to attack.
Posted by: Tim Worstall | June 20, 2009 11:28 AM
Like a secret society, the medical profession, the AMA, the government, and the educational system operate behind the scenes. I recall a few years ago the government paying some eastern medical school $17 million to entice and compensate them for reducing the medical enrollment at the behest of ... the AMA.
As the people gnash their teeth and run around in a frenzy, the monopolist quietly goes about it's work, maximizing profit by increasing price and reducing supply.
The first step is to realize we are dealing with monopolies and oligopolies, not competitive markets. Reducing cost will require competition, forcing the market toward MR=MC. All the rest is so much foo foo.
Importing Doctors is one way. Changing and expanding the closed shop educational system is a better way. Why not have a B.S. in Medicine, like an engineering or nursing degree. I think it would improve the quality and the cost of medical care in the US.
Posted by: zinc | June 20, 2009 1:36 PM
You could increase the supply of doctors by increasing the opportunity cost for other alternatives. Maybe taxing lawyers.
I do not know if giving people a B.S is Medicine (and allowing them to practice) is a good idea. I do think you need at least an intelligence of 1.3 standard deviations above the mean to be a good doctor. We need ways of weeding out those dumbies. Perhaps certain medical services can be delivered through people through people with lower intelligence (such as cleaning teeth), but I think you do need to have smart people to diagnosis problems.
Posted by: Aki_Izayoi | June 20, 2009 3:08 PM
I like taxing lawyers and other professions than Dean's suggestion of importing doctors (I am implying that those doctors are underqualified). To the contrary, Dean seem to be advocating brain drain from other countries. This would be more ethically appealing to me if the countries that are importing the doctors have an overcapacity of medical professionals. I see brain drain as a largely zero-sum game on an intercountry perspective.
Does anyone know the correlation between the "g" factor and medical competency? How could we allocate doctors to the more "g" loaded medical tasks (such as diagnosing patients) and interpreting data, while given medical assistants and nurses less "g" loaded tasks such as cleaning teeth.
Posted by: Aki_Izayoi | June 20, 2009 3:19 PM
But how good at diagnosis is the average GP? You've heard of the problem of the 18-second diagnosis? Not good practice, but quite common, I believe.
I myself recently developed a somewhat obscure health problem, a proceeding I recommend to all health policy analysts. I visited a variety of GPs, and heard one silly, split-second diagnosis after another.
If you want intelligent analysis, I recommend specialists and the internet.
So I suggest that the real answer is to permit more specialized advanced practice nurses.
Posted by: Jorge | June 20, 2009 5:11 PM
Unfortunately, reading information on the Internet is a highly "g" loaded task too. Given the IQ distributions, half the population has an IQ of 100. Of course, even if the population was a group of geniuses, and the IQ tests were standardized with that population, half of them would have an IQ below 100. However, an IQ of 100 with the current standardization does not indicate much intelligence.
Posted by: Aki_Izayoi | June 20, 2009 8:24 PM
Aki_Izayoi,
To your comment "I do not know if giving people a B.S is Medicine (and allowing them to practice) is a good idea. I do think you need at least an intelligence of 1.3 standard deviations above the mean to be a good doctor. We need ways of weeding out those dumbies."
I post FYI the following:
"In a paper titled "Engineering Education Research Aids Instruction" in the 31 August 2007 issue of Science, Norman L. Fortenberry, of the Center for the Advancement of Scholarship on Engineering Education at the National Academy of Engineering, in Washington, D.C., and colleagues report that on average about 56 percent of engineering undergraduates complete their programs. In some schools, such retention rates can be as low as 30 percent -- in other words, two in every three students who begin an engineering program won't get their diplomas."
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=06&year=2009&base_name=health_care_protectionists_can#comments
Posted by: S Brennan | June 20, 2009 9:21 PM
I love you Dean, and I get your general point about the b.s. of selective protectionism and phony free trade. But this is a terrible idea:
It would be a worsening of the immoral 2nd and 3rd world brain drain we are already committing on other countries such as India & Phillipines. They support education of their best and brightest to be doctors and nurses, etc... and then we import them with prospects of higher pay, via several existing special visa programs, 5th pathway, etc. And then their people suffer from lack of care. Howe about we pay for training more of our own.
shame on you in this one instance.
Posted by: DrSteveB | June 21, 2009 1:33 AM
Re: DrSteveB.
Well, told you Dean, you cannot win these arguments.
Posted by: Tim Worstall | June 21, 2009 5:02 AM
it has been long since time to drop the fiction that doctors can deliver a large part of the health needs of this country.
Public health measure have yet to even get off the ground here. And for that we do not need primary care physicians----
The last thing we need incidentally, is more foreign doctors---we need reform of our own system
E. G. Indian doctors are migrating to the uS because of the outrageous for profit nature of our medical system. They neglect their own country and their own country's dire need.
Let's not continue to keep our system on life support by supposing that more of the same type of doctors from international countries are somehow magically going to save our system.
Posted by: Evergreen | June 21, 2009 7:58 AM
It's been a long time since a physician could know everything there is to know about medicine and make an unassisted diagnosis in 15 minutes (and those diagnoses were often wrong or useless anyway). Modern medicine is not a creation of practicing physicians but of scientific research and technology, yet the medical profession has managed to retain for itself a disproportionate share of the rewards.
The rigorous selection and extensive training that physicians receive may be more for the purpose of impressing patients and limiting the number of master practitioners (as in the old craft guilds) than reaching correct diagnoses. It will probably be more efficient to make better use of information technology than to turn out more of these overpaid medical priests. Probably a lot of what physicians do could be done by computer programs, which when properly written could subsume all medical knowledge without the need for memorization (which is what a lot of medical training is).
Posted by: skeptonomist | June 21, 2009 9:35 AM
Doctors in developing countries are not in finite supply. They can train more.
Maybe what I said was not clear, so let me say it three different times, three different ways.
We will pay countries to train 2-3 times as many doctors as they send to the U.S.
The United States will cover the cost of educating 2-3 times as many doctors as come to the U.S.
It is far cheaper to train doctors in places like China (just as it's cheaper to make clothes) so everyone can benefit if we pay to educate many more doctors in the developing world.
Okay, so I am proposing a plan that will get poor countries MORE doctors. We have a lot of immoral people on this list who don't want people in the developing world to get good health care.
Posted by: Dean Baker | June 21, 2009 9:36 AM
Dear DB:
If everything you proposed would/could actually happen, then I certainly have not problem with it. I just suspect that it will be a lot more likely to open up the spigot for more 2nd & 3rd world doctors and nurses coming here, and far far far less less less likely that there will serious support for the expansion of the U.S. dollars supporting training of 2nd and 3rd world training on get 1, pay for 3 basis. It is a lovely fantasy, but in the real world the former will happen (is happening); the latter makes for a good think tank report that goes no where. It reminds one of the H1B and tech worker labor issue. If tech firms would invest in training U.S. labor supply in tech, starting with equal better education in grade school, through university, and pay worker more, then maybe would not need to lobby congress to import 2nd and 3rd workers and brain drain the same countries. It has more to do with keeping labor costs down and preven labor organizing than free and fair trade in international labor market.
And I still think we need major changes in our domestic sytem to train more primary care, and to incentivize it (pay more for primary care, pay more for practicing in undesirable and shortage areas such as inner city and rural. Expand use of PAs and NP, more Family Practice residency slots, restrict number of specialist training slots and reduce economic incentive for those highly reimbursed specialties.
All easier done under single payer, of course. :)
Posted by: Dr.SteveB | June 21, 2009 11:31 AM
Back in the late 1960's I worked with a law firm one of whose clients was the Educational Council for Foreign Medical Graduates (ECFMG)
In order to take the state medical board to get a license, an MD (graduate of a medical college) had to be a graduate of an AMA approved medical college. At the time, the only foreign approved medical colleges, IIRC, were Magill in Canada and Guadelajara in Mexico.
The only way for a graduate of, say a British medical college, was to pass a test given by the ECFMG. Perhaps the system has changed in the past 40 years, but it might be the ECFMG, if it still exists, is the problem -- perhaps suffering from pressure from the AMA.
We presently "import" lots of medical personnel -- not physicians -- from the Philippine Islands. If you don't believe me look at the help wanted ads in any monthly nursing magazine. If we can import nurses to lower the costs for hospitals, why can't we import physicians to lower the costs for patients.
Posted by: ethan | June 21, 2009 11:20 PM
I'm surprised to read a discussion of the balance between primary care and specialist physicians that doesn't even mention the financial incentives that pull doctors to procedure-based specialties. As these same financial incentives also drive up the cost of care, getting rid of them would improve the medical system in several ways
Posted by: jairoi | June 22, 2009 2:07 PM
The only way for a graduate of, say a British medical college, was to pass a test given by the ECFMG. Perhaps the system has changed in the past 40 years, but it might be the ECFMG, if it still exists, is the problem -- perhaps suffering from pressure from the AMA.
We presently "import" lots of medical personnel -- not physicians -- from the Philippine Islands. If you don't believe me look at the help wanted ads in any monthly nursing magazine. If we can import nurses to lower the costs for hospitals, why can't we import physicians to lower the costs for patients.
Posted by: lingerie wholesale | June 24, 2009 5:51 AM
If there really is a Primary-Care Doctor shortage, then you could train more Physician Assistants and Nurse Practitioners.
Click on name - article is from 2000, but still relavent.
Posted by: uptown | June 24, 2009 8:51 PM
Every year about 25% of newly licensed MDs in the U.S. are foreign medical graduates (the list of approved medical schools is a long one). They are required to take exactly the same licensing exams as U.S. graduates as well as a TOEFL. India and the Philippines contribute most of the FMGs. They can immigrate to the U.S. on either a regular visa or a J1 visa.
There are additional training slots available for foreign graduates in primary care that go unfilled every year.
http://tinyurl.com/l84jg2
This may be personal prejudice on my part, but it seems to me that the people who leave their home countries to make more money in the U.S. are more prone to putting monetary considerations in front of patient care considerations.
The AMA doesn't control medical schools (or much of anything else). Your state legislature does. Medical schools are expensive. Prior to UC Riverside opening, the last UC was chartered in 1972 -- just before the passage of Proposition 13. Florida has recently added a medical school and of course, quite famously, Oral Roberts U had a medical school that went belly up in the late 90s.
Go read Nicholas Kristof's opinion piece today. The AMA is a bunch of old surgeons who neither control medicine in the U.S. nor represent the average physician. Any time I see anyone blaming the AMA for anything more recent than the past half century, I know that person is clueless.
Posted by: J Bean | June 25, 2009 9:21 PM
Here's the list of medical schools approved for licensing in California:
http://tinyurl.com/lfm9hz
Posted by: J Bean | June 25, 2009 9:23 PM