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Home Publications Blogs Beat the Press NYT Protectionists Won't Even Talk About Importing Doctors

NYT Protectionists Won't Even Talk About Importing Doctors

Saturday, 14 December 2013 23:29

Catherine Rampell had an interesting piece on the shortage of primary care physicians. Interestingly the piece never once raises the possibility of facilitating immigration of qualified doctors. It is striking that when industry groups have claimed shortages of nurses, STEM workers, and even farmworkers, immigration has been front and center on the policy agenda. This shows the striking difference in the power of doctors relative to other workers.

Comments (3)Add Comment
How About Putting American Workers Front and Center?
written by jerseycityjoan, December 14, 2013 11:09
What you say about recent labor shortages (whether real or imagined) is largely true. It does seem that every time we need more people to do some kind of job in private industry, people in that industry think of foreign workers first.

Where has indulging that mind-set gotten American workers?

Oh yeah, in the dark and miserable place where they've been since the recession -- and some were already there way before 2007.

We need to retrain American companies and American politicians and America's elite to think American workers first, foreign workers second -- and then, only until we can get enough of our own people trained. Of course there will be exceptions to this, but we have to get back to the default assumption that American jobs "belong" to American workers.

25% of our doctors are already from overseas. I certainly expect that figure to go up in the short and medium term, as more Americans get medical coverage and our population continues to go up and up, mostly due to ... that's right, immigrants and the descendants of immigrants. And no one is doing anything aggressive to get more American doctors trained. But for the long-term I certainly hope we can manage to produce tens of thousands of more American doctors a year.

If companies here in America want our money and want our government to prop them up but do not want our workers, maybe we should start encouraging them to find another host to suck dry.
Dean Baker Gets It: Bypass the Monopoly Lock on Residency Slots with Effective Competition
written by Last Mover, December 15, 2013 4:49

The article correctly points out that medical residency slots are the current bottleneck driving shortages in health care, then explains how hospitals exploit this:
In fact, one data point that suggests hospitals are currently making a lot of money on the more seasoned residents is the quantum leap in compensation on the day doctors convert their status from trainee to attending physician, under a new job contract. How can a doctor be worth paying only $60,000 on Friday and then at least twice that on Monday? Does the doctor’s marginal revenue product — that is, how profitable the doctor is for the employer — actually surge that much?

Note how "marginal revenue product" is interpreted on behalf of the hospital rather than the patient. Further, residents are subsidized annually by Medicare at $112k each, which in turn has been frozen since '97 to slow growth in available slots to a crawl, and the article asks why hospitals themselves don't pay more resident cost themselves given the obvious profit available.

It's classic monopoly power in action. Reduce output and charge a higher price absent a threat of competitive entry at the patient level market by hospitals.

There's more. Resident input costs are subsidized which is even more pure monopoly profit off the top for the hospital. If the punch bowl was pulled away hospitals would pay more towards resident cost, up to their "marginal revenue product".

Yet the shortage at the higher level of the patient market would still not be eliminated because of the hospital's market power which continues to act as a monopoly to reduce output at higher prices.

That residents suddenly see a sharp jump in pay on completion just means they get a larger cut of the same monopoly economic rent collected by the hospital.

A key point by Dean Baker to introduce more foreign competition into this model, is the practical ability to bypass the complicated structure of the monopoly grip on residential slots by hospitals.

In the end, despite other serious market failures of health care, competition from more ready made doctors who completed residency elsewhere would provide huge incentives and pressure to reduce end use prices charged by hospitals and other health care providers at the retail level.

Those prices are off the chart, evident to anyone paying attention. Over the top, laughably reckless and arbitrary, extortionist, obscene, varying widely depending exactly on who walks in the door.

This is what happens when monopolies go wild with the greed they have commandeered through politicians they own like so many items purchased off the shelves of a big box store - totally, utterly immune from any discipline whatsover from "free market competition".

Let hospitals face the same competition preached by the 1% for the 99% daily by MSM sock puppet media. It's one of the few areas where market competition can actually work in health care, which is exactly why it has been shut down by the economic predators in the 1%.
written by Sam Adenbaum, December 15, 2013 7:45
While it may not be the centerpiece of her article, Ms Rampell does write at the end of paragraph three, "That’s in addition, mind you, to the swelling number of med students studying abroad, with the goal of eventually practicing in the United States.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.