How Many Physicians Should We Have?

And who should bear the cost of that? While I agree in broad terms with James Capretta’s proposals for improving our policies respecting physicians:

The federal government should encourage a more adaptive and flexible pipeline of physicians entering the US market by (1) shifting away from the excessively hospital-centric orientation of current funding for residency training and directing the aid to the residents themselves; (2) promoting new forms of institutional certification with fewer ties to the economic interests of existing practitioners and academic medical centers; (3) adjusting the Medicare fee schedule, which sets income expectations for physicians, based on the market prices revealed through transparency initiatives; (4) promoting and testing a shorter and less costly education option that merges a traditional undergraduate curriculum with medical school; and (5) enacting immigration policies that accommodate a larger influx of well-trained and talented foreign-born physicians.

I think a little explanation is in order and we should, perhaps, be considering some additional questions.

The first thing I believe needs explanation is that the Medicare system pays something in the vicinity of $80,000 for each and every medical resident in the country, the amount paid to the hospital by which the residents are employed, and has done for the last 55 years. The rationale for this was to increase the number of physicians. Its effect has been to establish a cap on the number of physicians.

Presently, the AMA plays a key role in establishing the relative value of various different procedures and, consequently, the expected pay for different medical specialties. I won’t burden you with the mechanisms by which that is achieved. You just need to accept that it is true. I don’t believe that should be the case and one way of changing it could be by changing the formula by which hospitals are paid for medical residents. For example, should we actually be subsidizing all medical specialties? Or should we just be subsidizing those we want more of?

Many people are not aware of it but the U. S. is one of the few countries in the world in which medicine is a post-graduate course of training. It’s controversial but there is no clear relationship between outcomes and years of medical education. Or between physician pay and outcomes for that matter.

Now my questions. Do we really need more physicians? Or should we engage in a larger reorganization of the way in which health care has been delivered? Unlike Mr. Capretta I would suggest ending the system of paying for medical residents in favor of encouraging many, many more physician assistants and nurse practitioners and nudging medical education more in the direction of a supervisory role. That’s the present general direction and IMO it’s a good one.

Is the cost of health care in the U. S. really established by supply and demand? I think that Medicare functions as an income price support for physicians. That is supported by the reality that nearly all physicians accept Medicare. If that’s right, then the most important thing we could do to reduce the price of health care would be to stop increasing the Medicare reimbursement rates, something our legislators have demurred from doing.

Finally, I think #5 is flummery. Is there a single case of a foreign-trained doc who was denied entry to the U. S.? We’re in serious competition for medical professionals with the United Kingdom, France, Germany and just about every other developed country in the world. Said another way, our high compensation rate and thirst for physicians is raising the cost of health care everywhere. There is a market in GPs. That’s why their price is so close among the countries in the developed world. And I haven’t even touched on the grave immorality of luring physicians the cost of whose educations are borne by their home countries away from those countries.