Lowering Barriers to Entry to Boost Doctor Supply

18-cwru-white-coat-880x587Where have all the good doctors gone?

Becoming a doctor is no easy task. It takes a lot of time, a lot of effort and a lot of money to make it through medical school, and even after that there are internships, residencies and licensure requirements to be dealt with. The opportunity cost is simply staggering, and the rewards are less attractive than ever before. The threat of malpractice suits and an expectation to accept patients with less than generous insurance policies means doctors are no longer super-rich elites they once were.

This reduction of incentives to enter the medical profession has, quite understandably, reduced the supply of doctors. The prospect of foregoing years of profitable work experience in exchange for stress, debt and the general disrespect of both patients and governments alike is simply not as appealing as it once was. No wonder it takes six months to get an appointment.

There are two main ways that a supply shortage can be corrected: increase incentives for producers to enter the market, or reduce barriers to entry. No one really likes the idea of paying doctors – a privileged group, at least in public perception – more money, some policymakers are beginning to pursue the latter approach by advocating for shortening medical school programs from four to three years.

This is an attractive approach for a number of reasons. First, the fourth year of medical school is typically spent in elective courses and applying for residencies–hardly essential for a general practitioner in high demand. Second, it addresses one of the fundamental problems with the market for medical care–unresponsiveness in the short term. The trouble with demand side approaches to increasing doctor supply is that it can often take as many as ten years for a student responding to an incentive to become  a doctor to actually be allowed to practice medicine. Market conditions can change a lot in ten years, and this delayed response makes the health-care market less efficient than it might otherwise be.

A shorter tenure at medical school makes the market more agile, while at the same time reducing barriers to entry for prospective doctors. But while a quicker passage through medical school is a step in the right direction, it doesn’t address some of the deeper and more troubling aspects of the health-care market.

The supply of doctors is ultimately controlled by government and by trade organizations such as the American Medical Association. It is in the best interests of these organizations to restrict output and keep prices high, stacking the deck against new entrants and harming consumers in the process. The fact that the monopolist is squeezing consumers slightly less does not change the fact that he is a monopolist, created and maintained through the use of government force.

The length of medical school is something that should be determined by the market, not by fiat from a central authority. Consumers deserve choices in the kind of medical care they want to consume. If they are comfortable with a doctor with three years of schooling, or two, or one, they should have that option, along with the corresponding lower costs. Likewise, if people only feel safe with a graduate of a four-year program, and are willing to pay a higher price for that service, that should be their prerogative.

Government licensure requirements provide consumers with less choice over the products they can purchase, mandating one level of quality for all citizens regardless of income or individual needs. Instead, a system of voluntary certification would allow doctors of different training levels to compete with one another, while keeping consumers fully informed about what they are buying.

Shortening the length of medical school from four to three years may ultimately increase the supply of doctors – a little – but in the long run it will be important to do much more to reduce barriers to entry and increase competition. Only then will we see a meaningful expansion of doctor supply and real decreases in the cost of health-care.

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One Response to “Lowering Barriers to Entry to Boost Doctor Supply”

  1. Annoyed MD says:

    Logan, I hope you opt for treatment from physicians with 1 year of schooling and one year of residency so that you get to experience what it is like to receive care from people who are under-qualified. If you think that doctors are the reason for high health care costs in this country, you have your head buried in the sand. Blame doctors and the AMA all you want but take a look at lawyers that make a career by suing providers and hospitals, hospitals and companies that own the doctors and overcharge patients for everything, insurance companies that do very well for themselves while running a business designed to charge as much as possible for premiums while at the same time denying coverage and provider reimbursement for anything they can and patients who refuse to except personal responsibility for their actions while at the same time demanding complete and often excessive care from only the best physicians immediately.

    Yeah you hit the problem right on the head. Karma is going to come for you…we all get sick and need care at some point.

    By the way, you can read as much as you want and be the smartest person ever but that is no substitute for experience. The reason for requiring so much training, testing and re-testing is there for an important reason. Contrary to what economists, administrators and similar MBA people think, not everyone can and should be commoditized for the sake of profit.

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