Why Does the US make it so hard to be a doctor?
theatlantic.com
theatlantic.com
This is a great piece top to bottom. There is no credible objection I'm aware of to any of the deregulation proposals included herein. The American Medical Association will object, because they don't want the competition because it will have a negative effect on its members' incomes.
If you think health care is too expensive in the US, the changes proposed herein are Job 1. There is no reason why Mexican, Canadian, British, Indian, German, ... doctors should not be allowed to come and practice in the US with more than some cursory verification that they actually attended a medical school where they are from. There is no reason for anyone in the US to be denied a slot at medical school (not a particular medical school, but some medical school in general).
One final note: please don't be fooled into have sympathy for the large debts doctors incur through medical school. This is not the population which is deserving of student debt relief. I'm happy to shorten their education, of course, but doctors are consistently among the very highest paid people in American society. Retiring even a million dollars in debt (much larger than any number in this article) is not that hard on a highly-paid specialists' salary, which can easily average half a million dollars per year.
The author of the piece has proposed to do further pieces on an "Abundance Agenda" for the US. Essentially this looks at ways to increase supply in things which are currently expensive but don't have to be. I haven't read other parts of it but I strongly recommended following him and looking further into the idea.
Is it the perception that increased competition will have negative effects on members' incomes or is that actually true? I swear I remember a story, study, allegory about a second doctor moving to town and both incomes went up.
Generally true in other areas. Health care is not that exceptional a market, though it is exceptional in several respects. We do generally observe in health care specifically that increases in market concentration increase prices.
> I swear I remember a story, study, allegory about a second doctor moving to town and both incomes went up.
I'll take a look if you can find it. It's possible. One story I can imagine would be something like: First Doctor can see more patients b/c he can send his more complicated patients to Second Doctor's specialty practice. And Second Doctor moved from a smaller town w/ fewer patients in the specialty.
In the aggregate and outside of special cases more supply will bring prices down.
My wife is a physician. She needs a large salary to pay off her large medical debt. When the medical debt is paid off her salary will still be large. A much more sensible system would to make medical school free so that the salaries don’t have to start off so high. There are people with hundreds of thousands in med school debt who didn’t match. We should feel sorry for those people.
> A much more sensible system would to make medical school free so that the salaries don’t have to start off so high.
That's not how any labor market works. Your salary isn't determined by how much debt you rack up. Doctor's salary's are high because the supply of doctor's is so low (especially primary care).
The article covers all the points you're debating (much better than I).
True, or else college dropouts from a private school will have higher incomes than a state school undergrad, which is not the case at all.
British doctors, for example, work under a contract negotiated between a British version of the AMA and the British government. The government and the providers both have leverage, but the British government is the primary purchaser of services in that country. Salaries are lower since the government exerts pressure on them, as they are paid for out of direct taxation.
I understand that you feel very strongly that student debt for doctors is unjustifiable or too high or something. Student debt is not the main driver (or even a driver) of high salaries among US doctors. The level of their student debt is a completely separate topic.
Anecdotal evidence. My wife has $400,000 in med school debt. She needs a $300,000 salary to afford paying that debt off whilst also maintaining a “good” lifestyle. Med school, residency, etc. were hard and sacrifices were made to go through them. It would not be worth it to go through that without a reasonably high salary.
She’d gladly have gone through the process for a $200,000 a year job. It is certainly the case that highly motivated, highly intelligent people take into account the ability to service med school debt when deciding to become a doctor vs. another going into another field. It is obvious that high med school debt has an effect on the salary needed to attract talent.
David Carr won the Nobel Prize in part for his work questioning the traditional supply/demand view of labor economics. Here is a link to an interesting (to me) paper.
Great example. These doctors face competition from a low- or no-cost private sector. This keeps prices down since every consumer can use the state sector. This is true in many countries w/ state health sectors.
> David Carr won the Nobel Prize in part for his work questioning the traditional supply/demand view of labor economics.
Could you mean David CARD?
https://davidcard.berkeley.edu/
His work of course I know. It is related to the economics of minimum wages. I would not say it questions the traditional supply and demand framework (nor would he say that, I bet), though he does point out an empirical observation which doesn't fit well within that framework.
One cannot always use the state system. For example, some elective surgeries can’t be done in the state system fast enough for the upper class and then there are those who want vanity cosmetic surgery. I don’t know what the data says but I’d be surprised if private cosmetic plastic surgeons make as much in France as they do in the U.S.
For the record I believe licensed doctors in, say, the EU should be able to practice medicine here without having to do a residency. Though there is a moral consideration in terms of draining the medical talent from countries like Greece, Romania, etc. I believe that med school in the U.S. should be free and that doctor’s salaries could correspondingly go down without decreasing the supply of people wanting to become doctors. It seems obvious to me that having $x in student loan debt is a factor in determining the required starting salary to attract enough talent. I don’t see how anyone can think otherwise. If the debt can’t be serviced easily enough while having a good enough standard of living then these talented people will do something else.
Of course, I could be wrong about everything. There are lots of “obvious” things that aren’t true.
And no, debt does not affect salaries. It's the other way around - with the potential to make a lot more income, one is willing to get more debt to reach that goal. Higher salaries people cause more demand, and so prices go up.
If debt affected salaries, you'd expect your claim to play out on all fields, which it does not. Higher paying undergrad salaries don't correlate to more debt, for example.
If debt affected salaries, you'd expect your claim to play out on all fields, which it does not.
This is very much wrong! All fields are not equal. No one should expect motivations, forces at a play in one field to necessarily apply to all fields.
Do you think highly intelligent, highly motivated people would take on hundreds of thousands dollars of student loan debt without an expectation of a high enough salary to service that debt while maintaining a good lifestyle? We are talking about people who could go into just about any field. To be able to attract the talent the salaries need to be high enough to service the debt. Without the debt the salary needed to attract that talent would go down.
My wife’s med school debt is $400,000. She needs the $300,000 salary she has to service this debt while living a good lifestyle. That high salary will last the rest of her life and not just for the few years it takes to pay off her debt. If she had no debt the she’d be able to live the same lifestyle making $225,000 per year.
Personally I think it’s naive to think that the debt level doesn’t come into play when determining the salary needed to attract the labor of highly intelligent, highly motivated people. You really think that in the alternate world where the U.S. had free med school and all else was the same that salaries would be the same?
You responded to a point from a previous poster with "In countries with mostly free higher education doctor’s salaries are less on average than in the U.S." as if those doctor low salaries were the result of less debt (which is your argument throughout this thread - that debt makes salaries higher), and I pointed out that this is not unique to doctors, and the costs across all fields don't seem to have debt/salary correlation. Your evidence for your thesis does not hold up outside doctors, and then only for US doctors, so it's hard to believe there is some mystical economic law working only for that sub-case.
>the debt level doesn’t come into play when determining the salary needed to attract the labor of highly intelligent
It does. However your claim is "You really think having several hundred thousand dollars in student loans doesn’t in any way affect salaries?" as if the debt forces employers to pay more. It nearly certainly works the other way - if you are going for a job that pays a lot, you are willing to take on more debt to obtain it. Thus those teaching students how to make so much money are able to charge more for teaching that skill.
This is the exact same causal direction of pretty much any asset. Something is more valued, so people will pay more to obtain it. You're implying the other direction.
>To be able to attract the talent the salaries need to be high enough to service the debt
This again makes little sense as to direction. Quants could get PhDs in STEM (mine is in math, and I have a lto of quant friends) and they make vastly more than all but the highest doctors, yet they don't have all the debt. As the quant field matures (and if it lasts), the cost to obtain training will likely rise.
Not sure what your paper shows, except that which I already claimed: doctors are rare, skilled, and take a long time to make. As such they will get paid a lot because their skills are in demand. This has zero to do with debt - this is exactly supply and demand.
Next, again because of supply and demand, those able to teach people to become doctors realize those doctors will make a lot of money, so they, like all free market actors, will charge what the market will bear. Thus the causation is opposite what you claim - each step in the chain absorbs what the market will bear.
It's not like schools decided to charge far beyond what anyone would pay, and later the wages rose to pay for that debt beyond what people could previously pay. It's more that as wages rose, due to demand, school increased prices to capture what the market would bear to provide those skills.
“…concludes that 'wage elasticity is unresponsive (or inelastic) and that very large increases in wages would be needed to induce even moderate increases in nurse labour supply', adding that the 'weak role of wage increases in promoting nurse supply is also supported by recent qualitative studies..”
I misread your original comment regarding uniqueness. I now understand what you meant. The situation for doctors in the U.S.:
It’s a field that requires highly motivated, highly intelligent people to go through the process. There is a high opportunity costs involved due to the 10 - 12 years of required training at little or no pay. A massive debt is incurred to become a doctor. The people entering the field have the talent and ability to do something else that has high pay or is otherwise rewarding.
As such, attracting people into the field must take into account the ability to service the debt. Suppose starting next year all graduating med students were forevermore saddled with a $1 million med school tax upon graduation in form of a debt to the Treasury at 5% interest. Salaries for incoming doctors would eventually have to rise to take this into account in order to attract talent. Clearly the large debt incurred in order to become a doctor has some effect on the salary necessary to attract talent.
It's not like schools decided to charge far beyond what anyone would pay, and later the wages rose to pay for that debt beyond what people could previously pay. It's more that as wages rose, due to demand, school increased prices to capture what the market would bear to provide those skills.
It’s the case that this model of how things work is too simplistic. There’s a dance between the different forces at play. Each of the forces involved evolves over time and they all adjust over time to each other. That is the proper modeling of such things.
The easy way to conceptualize this is the waiting list for medschool. Today the line is out the door and around the corner. As tuition goes up, the line will start shrinking. Only after the line is gone and fewer doctors are graduating will salaries start rising.
I think the point others are making is that there is already a surplus of people that want to be doctors and a fixed number of a medical degrees in both scenarios.
If doctors already make more than enough to pay off their medical debt, what would change to make them start accepting lower salaries? It seems that the salary is driven by competition between hospitals (demand ) opposed to what doctors are willing to take. I guess it is possible that doctors without school debt would less actively chase higher salaries, so perhaps there is some small impact there.
That said, it seems by far the best solution is still more doctors, with or without school debt.
If med school were free then salary required to live at the required standard would go down since the need to service the debt would no longer be there.
Sure, some people might settle for a low-ball salary for personal reasons if they don't have debt, but I think the vast majority would follow the salary.
There is basically no value in a general medicine doctor that i can see. General health issues can be handled by a nurse practitioner, they can see if you have an ear infection, are sick with the flu, and proscribe you the antibiotics, or other controlled medicines just fine. They could easily switch to a model where the General Medicine doctor acts as like the staff engineer over the senior devs, and just does a quick plus one on their results and makes sure no mistakes were made. (this is how most doctors visits play out anyways)
When there IS something seriously wrong, they almost always send you to a specialist who can actually treat your specific issue. Have a really bad ear infection / something is lodged in your ear? Here is the ENT referral! Pay me for telling you to go see the ear doctor when you had ear problems.
Now my view might be biased because i have been given Kaiser as my provider and i know they have incentives in their system that arent the norm. But its always a specialist referral. Ear problems that the anti biotic didnt solve? ENT referral! (the ENT laughed and said the general medicine doctor made the problem actively worse with the multiple types of anti biotics proscribed sense it was a fungal infection in the ears). Skin issue? Here's the dermatologist referral! Shortness of breath after working out? Here's the pulmonology referal if you want it. Your knee hurts? Here's the rheumatology referral.
I am legit curious what medical service the doctor would provide. You mention "multi-systemic disorders that most mid-level practitioners would never recognize" do you have an example of that?
Don't tell my PhD thesis adviser, I guess? He could have sworn he approved a dissertation about health economics but you've uncovered my secret, or something? (And what was I working on for all that time then? It was years of my life! Apparently nothing?!?)
> the bottleneck for increasing the supply of doctors is the number of residency slots.
No, _you_ are misunderstanding what change I want. There is no reason at all for a German, Mexican, British, etc. practicing doctor to have to do a US residency at all after they finish whatever training qualifies them to be a doctor in their home countries.
Read the article again. US medical education takes much longer than medical education almost anywhere else in the world, yet our outcomes are almost always worse along nearly any measurable dimension.
You will say: "yeah, but that's the result of many factors!" Great - I agree. But in that case it really isn't obvious that the extra years of medical education in the US do a lot for patient outcomes.
In fact, not only do I want more residency slots in the US, I want to reconsider that whole residency system, especially for doctors trained abroad.
> I think it’s pretty much universal that each country wants doctors to go through their own version of residency.
Why? That's a big part of the problem. There is literally no reason in the world for a German doctor who has been practicing there for a few years to have to come here and do a residency again. It makes no sense. You wouldn't do it for a C programmer, right?
Example: "Sorry - you learned C in Germany. If you want to program here, you'll have to get a four-year degree in CS again."
This obviously makes no sense. C is (ideally) the same language wherever it is written. And yet, while you have the same number of kidneys as a German and the same nervous system as Russian ... are you seeing the point I'm trying to make? Why require years of extra training for a doctor from one of those countries to work here? That keeps them out of our market and keeps prices high.
> A much more sensible system would to make medical school free so that the salaries don’t have to start off so high.
Let me pull out my economist card again and say: "this is not how that works." Salaries are not high because medical school is expensive. Salaries are high because supply is restricted. That's how supply and demand work.
You should have stated it this way. In your original post you referenced medical school and that gave the impression that you aren’t aware of the credentialing process to becoming a licensed physician. You had written:
There is no reason why Mexican, Canadian, British, Indian, German, ... doctors should not be allowed to come and practice in the US with more than some cursory verification that they actually attended a medical school where they are from.
There is actually a valid reason to make it hard for doctors to move from one country to another. Training doctors is time consuming and expensive. There is a moral aspect to luring doctors trained in poor countries to rich countries.
David Carr would like a word with you regarding your belief that supply/demand alone accounts for the pay of doctors. The supply would not go down if med school was free but starting salaries were x% what they currently are. The experiments have been run. Countries with mostly free higher education have lower doctor pay than the U.S.
When your goal is to increase supply in the US and drive down prices, then no, there is not a valid reason to do this.
> Training doctors is time consuming and expensive. There is a moral aspect to luring doctors trained in poor countries to rich countries.
FWIW I don't completely disagree with this. But that's kind of a crappy thing to say to a Turkish doctor who wants to flee the Erdogan Sultanate, or a Sudanese doctor who wants to make more than a pittance every month.
I'm not willing to condemn some poor Pakistani doctor to a life much less comfortable than he could enjoy here AND force US citizens to pay extremely high prices for medical care to protect the incomes of US doctors. If you are, cool.
Before you get indignant with me: you yourself could train as a nurse practitioner pretty quickly and cheaply (if you are in the US) and then go practice in Sudan or 100 other countries. They'd love to have you. If you only speak English, try India, Ghana, Nigeria, ...
You would be providing a great benefit to the Sudanese. Don't want to? Then why condemn some Sudanese doctor to the same just because he was born there instead of here?
> David Carr would like a word with you...
I don't know who this is.
> regarding your belief that supply/demand alone accounts for the pay of doctors.
I will happily believe this, both on my own authority as an actual informed expert in the field AND on the basis of the research of numerous colleagues of mine, who have in the aggregate devoted several hundred years of work to understanding this topic.
> The supply would not go down if med school was free but starting salaries were x% what they currently are.
This would be a notably interesting result in economics if it were true. It is not true. Doctors salaries are not responsive to the cost of medical school.
I'm not willing to condemn some poor Pakistani doctor to a life much less comfortable than he could enjoy here AND force US citizens to pay extremely high prices for medical care to protect the incomes of US doctors. If you are, cool.
You assume that I’m opposed to giving licensed doctors in other countries an exemption to going through a U.S. residency program in order to practice in the U.S. You are making assumptions that are not justified by what I have written. There are at times valid reasons to restrict medical talent from easily leaving one country to another and there are times where there aren’t really any valid reasons for doing this. I was responding to your statement, “there are no valid reasons….”
Your argument here is way too black/white given the complexity of the issues involved. Thinking that “…condemning Pakistani doctors…” and “…force U.S. citizens to pay more” are the only or are necessary outcomes to not allowing Pakistani doctors to practice medicine in the U.S. without going through a U.S. residency program is not correct.
https://www.jstor.org/stable/24695058
EDIT: Modified to be less vituperative.
There might be a reason for the home countries to not want their trained doctors to leave considering the money spent training them. Some of them do have agreements for the trained doctors to work for a few years in return for the subsidy. That's for the home country and the student to decide.
However the main economic argument here is there's no reason the US should force them through residency again to practice, instead of just directly allowing them to practice after some vetting (USMLE whatever) and reap the benefits of fulfilling pent up demand, lowering healthcare costs and improved access.
I have point out here that "We shouldn't steal talent from poor countries" as a moral argument is a common trope amongst those pushing for immigration restrictions to limit competition to themselves. People are considered free and aren't owned by their countries. Its an understandable argument but I wouldn't pass it on as beneficial to the US or the people (it's not).
Isn't that at least in part because there's so little competition though?
Residents don’t need debt relief but they also don’t need hostility.
look up FAANG salaries and TC I will bet you undergrad education will get debt relief
But to me this is another one of those cases where poor government policy boosts prices. Hospitals already have an incentive to buy up small practices to reduce competition, but if hospitals are paid double the price for the same procedure compared to an ambulatory clinic, the government is just incentivizing concentration in the market.
https://www.ama-assn.org/sites/ama-assn.org/files/styles/rel...
Just letting lurkers know the article is not about PhD programs or academia in general, as I half expected