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Home Publications Blogs Beat the Press The Exclusion of Foreign Born Doctors: Where are the Free Traders?

The Exclusion of Foreign Born Doctors: Where are the Free Traders?

Tuesday, 03 August 2010 04:10

The media have played a huge role in fundamentally misrepresenting trade policy and thereby larger economic policy. As a result, the public is quite confused on key economic issues.

This is brought home in an article today about a study showing that foreign-born foreign-trained doctors perform slightly better than doctors who were born and trained in the United States. The article notes in passing that an extensive set of tests required for licensing make it difficult for foreign doctors to practice in the United States. The number of foreign medical residents who can enter the United States is also tightly constrained.

This suggests that the United States could get many more highly qualified foreign doctors if it eliminated these barriers so that they only ensured the quality of training. (It is easy to design mechanisms to ensure that the physicians' home countries benefit from having their doctors' practice in the United States, so this need not be a concern.) 

Remarkably, this point is never raised explicitly as an issue of trade and economics in this or other articles. Trade policy is usually only discussed in the context of trade agreements such as NAFTA (which are wrongly labeled "free-trade" agreements) even though the barriers that prevent foreign professionals like doctors from practicing in the United States cost our economy tens or hundreds of times as much as the money at stake in these agreements.

The failure to seriously discuss trade in the media leads the public to have the misleading view that less-educated workers, like those in manufacturing, can't compete in the modern world economy, while the most highly-educated workers have the skills and ability to prosper. In reality, the most highly educated workers prosper because they have the political power to limit the number of Chinese, Indian and other foreigners who are allowed to compete with them, unlike manufacturing workers.

If there was genuine free-trade in highly paid professional services then doctors, lawyers, and economists would see the same downward pressure on their wages as autoworkers and textile workers. The gains to the economy from lower prices for health care and other services that would result from free trade in highly-paid professional services would be enormous, but it is as hard for most economists to notice these gains as it is for them to see an $8 trillion housing bubble.

Comments (8)Add Comment
written by izzatzo, August 03, 2010 8:50
From the NYT article, this quote:

The patients of foreign-born international graduates had the lowest death rate, 5 percent, and the patients of American doctors trained overseas had the highest death rate, 5.8 percent. Patients of the American born-and-trained doctors fell in the middle, with 5.5 percent.

The differences don't seem significant, but they may be statistically. As or more important is the void in primary care that could be filled with foreign doctors, because primary care acts to avoid such death rates as well as treating the problem after the fact. The critical shortages in underpaid primary care relative to the overpaid surplus in specialty care actually magnifies the problem by sending specialty physicians way more patients than necessary.

The paradox is that by barring foreign competition in health care in general, domestic primary care in the US is presented as "underpaid" by the usual propaganda due to the carefully controlled migration of doctors into more highly paid, but equally restricted specialty areas. Yet perfectly capable foreign-trained doctors are more than willing to fill positions at the going rate even in primary positions, not to mention specialty areas.

Millions in the US are in a bizarre position of requiring only a simple, but impossible visit to a primary care physician to avoid a host of potentially very serious and expensive medical problems, or at the very least to confirm suspected problems.

It's like someone starving who needs a mere a bowl of rice to survive, forced to seek out food only from very expensive restaurants. They do serve rice, but even 'a la carte, it's priced a hundredfold over the bulk price rate in supermarkets. Further, it's not available as carry out, and otherwise must be purchased as part of a minimum priced $300 meal.

The sign used to say, "No shoes, no shirt, no service." Now it says, "No job, no insurance, no credit, no proof of wealth or income, no service, not even a bowl of rice."
other countries
written by nancycadet, August 03, 2010 9:04
There's a great book called "The Healing of America" by TR Reid that compares several countries' health care systems, including the UK, France, Germany, Japan, India, US, Canada, etc. One major point it makes is that in the US most doctors make HUGE salaries while in other advanced economies doctors earn respectable upper-middle class incomes but are not paid like and are not treated like royalty. (Granted much medical education is in private hands here and much more expensive too). My European friends are well cared for and know they won't go broke if something catastrophic or chronic occurs. I was once treated by German medical students in a clinic--no problem and they even recommended an herbal remedy!
outsource ur soul
written by frankenduf, August 03, 2010 12:36
i can't tell if Dean is being ironic in his point about foreign docs- on the one hand, of course doc salary exorbitance is part of the health care cost corruption- however, my dad always said 2 wrongs don't make a right- if outsourcing blue labor is immoral in that it corrodes civil society, it doesn't seem to me that outsourcing docs is any better
written by word, August 03, 2010 4:31
I'm not so sure that allowing foreign trained doctors to practice in the US would improve prices. Prices in healthcare aren't really determined by a working market, and demand tends to increase with increased supply. I suspect that increasing the number of doctors in this way would result in increased payments by Medicare, Medicaid and private insurance companies, without a corresponding increase in health.
written by ,,,, August 03, 2010 10:55
There are plenty of qualified attorneys and most don't make as much as the stats indicate. We don't need foreign attorneys to drive down prices. It's already happening. It's just expensive to practice law and most people don't have the money to provide services to all. Cheaper legal research, advertising, telecomm services, and discovery costs would make law more affordable.

Also, I feel more self-help options and access to counseling would be more beneficial than merely opening the floodgates to lowering prices to the point that only the wealthy can afford to practice law. The wealthy have no interest in the little guy.
written by floccina, August 04, 2010 10:07
Anti-foreign bias?
Apollo Healthcare
written by floccina, August 04, 2010 10:10
BTW check out what Apollo Healthcare is offering to citizens of western nations. There has even been discussion of hospital cruise ships.
timberland shoes store
written by timberland for you , September 11, 2010 3:39
Tucked away in our timberland for you subconscious is an idyllic vision. We see ourselves on a long trip that timberland 6 inch spans the continent. YQ

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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.