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Home Publications Blogs Beat the Press Why Don't We Import Doctors to Deal With Shortages?

Why Don't We Import Doctors to Deal With Shortages?

Tuesday, 26 March 2013 04:38

It is bizarre that the idea of bringing in more foreign doctors as a way to drive down wages is never discussed. Readers of a front page Washington Post article on using nurses for some of tasks currently done by doctors must have been puzzled by this omission.

While allowing nurses to do work for which they are qualified would seem to be a win-win for everyone but doctors, it seems especially strange that this piece never raised the possibility of bringing in more foreign trained doctors as a way to drive down wages and save patients and the public money. This is done all the time in the case of nurses. Many nurses are brought in from developing countries, most notably the Philippines, as a way to drive down the wages of nurses.

There is no justification for not having the same approach to foreign doctors. Obviously doctors as a group are more wealthy and powerful than nurses, but news outlets are not supposed to adjust the news to suit the desires of the rich and powerful.

Comments (15)Add Comment
Why WaPo Hypes a Doctor Shortage at the Expense of Nurses
written by Last Mover, March 26, 2013 6:49
Readers puzzled, like they know what a shortage is? A true shortage means the market doesn't clear at either a higher necessary price to alleviate the shortage from less quantity demanded, or more supplied at the existing price to alleviate long waiting time.

If the point is to drive current price down even further from existing price, that requires going past correcting the shortage condition to create a temporary surplus that results in a lower market clearing price.

The doctor shortage is clearly the second type driven by long waiting time because rising prices can't clear the market. All they do is collect more economic rent since supply doesn't budge.

This is what the dispute is about between the nurses and doctors referred to in the article. They're fighting over who collects the biggest cut of the monopoly rent loaded into the prices. Doctors have abused it with ridiculous claims they must have authority over many decisions for which nurses are not qualified.

Yet from the other side, nurses themselves resent competitive entry that would erode their own access to the economic rents. In the end, the patient may have less waiting time but the outrageous prices will remain regardless of who pays them - patient, private insurance or government.

Commenters have mentioned that Dean Baker seems to contradict himself, advocating both more competition from imported doctors and a single payer structure that doesn't seem to depend on competition.

But single payer does depend on competition. The only difference is doctors compete with each other against a ceiling price, itself set to avoid excess shortages or surpluses in markets that fail to set market clearing prices absent economic rent.

WaPo could explain this to readers easy enough. But that's the point. Never explain it. Just keep setting it up as a conflict between doctors, nurses, consumers and patients fighting over who should pay the outrageous prices. Never, ever set it up as monopoly price extortion that is absurd and unnecessary for health care as proven by every other developed nation in the world.

Keep those readers puzzled.
Really you advocate bringing in foreign drs instead of increasing the number of americans with jobs
written by D Mundy , March 26, 2013 7:36
Only in the US is an MD a graduate degree. In the rest of the world it is an undergraduate degree. But how the heck can you advocate for letting in foreign doctors as opposed to sending more americans to medical school. We have a shortage of doctors because the AMA keeps a tight lid on the number of doctors so prices stay high ( did I mention that in the rest of world doctors don't make as much either). Those doctors come out of school saddled with debt and become "specialists" so they make more money. That leaves a shortage of primary care doctors because they make the least. Re vamp the system - expand the number of medical schools or go to the system that produces plenty of doctors in the rest of the (developed) world and we would kill two birds with one stone - more jobs and more doctors, Of course you would have to break the hold of the AMA. Tons of well qualified students would jump at the chance to become a doctor - don't make them go to foreign countries just to come back in to be doctors here.
written by JP, March 26, 2013 7:42
When reviewing the WP comments on the article one paragraph jumped out at me that added another dimension to the question.
"The problem with creating more doctors is residency slots. You MUST go through a U.S. residency to practice medicine in the U.S. (which is why we can't simply import doctors from abroad). Residency positions are funded from Medicare taxes. The amount of positions funded has not increased in, if memory serves, 15 years. So even if medical schools graduated 100,000 new MDs next year, it wouldn't matter because there would not be 100,000 residency slots."

It was a short thread in a larger dispute (mostly territorial)but added some info to consider.
do not stop there
written by john, March 26, 2013 10:28
Why stop there: we pay our teachers, firefighters, police and college professors much more than most of the world. Here in LA County the average firefighter makes over 100K per year working three days a week and retiring at age 50 at 90% of final pay. I am sure we could get loads of folks from Spain to do the same work for half the pay. Educational outcomes are vastly superior in other countries; most of whom pay their teachers a fraction of what we do. Let's start importing them from Hungary, Romania and Croatia.

What do say, Dean?
why we pay more
written by pjm, March 26, 2013 11:08
@john one of the reasons we pay more is because the public provision of social benefits here is lousy in comparison (retirement, health, unemplyment, disability insurance). This is also a problem for employment because it means a high overhead cost per worker and firms have incentive to work the hell of each employee (i.e., no shorter workweeks, work-sharing etc).
limited residencies
written by jazzk, March 26, 2013 12:36
we do, but not as a matter of national policy. the issue is the limited number of residency spots, a huge reason why we have primary care doctor shortages.
God Did Not GIve Us a Limited Number of Residency Slots
written by Dean, March 26, 2013 12:52
Come on folks, that is a protectionism -- trade restriction. We know that doctors can't get rich in a free market, but that's too damn bad. We either expand slots here or create a mechanism to allow people to do residency elsewhere. This is about as simple as it get.
written by skeptonomist, March 26, 2013 1:29
The whole system of medical training and practice in the US needs reform. As JP mentions, docs must go through the apprenticeship of residency, which is not really directly relevant to general practice, which is what is needed most, or to the specialties which pay the most. This is on top of medical school, which is largely rote memorization. Diagnosis in general practice could mostly be handled by computers - there is just too much information now for humans to master in the first place, let alone keep up with the latest advances. We are saddled with a medieval guild system, and the "masters" control things through the AMA.

The needed reforms are not going to be accomplished by free markets. Importing docs from other countries is basically being parasitic on their systems, where the medical profession does not have the same control. Generally speaking, a totally free market in labor is a bad idea - I don't see Dean condemning unions because they abridge free markets. But a reasonable balance is tricky and authorities usually have to step in - on the side of unions for most types of labor, but probably against the guild system of physicians.
written by James Rytting, March 26, 2013 2:13
"Many nurses are brought in from developing countries as a way to drive down the wages of nurses" as a means of increasing PROFITS and CONTROL, not save the public money! Here's another fun fact: Canada has fewer physicians per 100K population, and european states with more doctors but half our costs did not achieve saving by importing docs or because the docs competitively bid their services down.
Importing MDs is a short-run solution. In the long run we need more/cheaper training
written by Rachel, March 26, 2013 2:42

And of course more training includes more residencies.

The need for more training is especially important in a society becoming more and more unequal, because of the tendency of our university system to open paths for the more privledged, rather than the more talented, especially where high salaries are involved.

Another problem with importing doctors and nurses is that historically, this has dealt with some geographical problems, but has not done much to bring down doctors' and nurses' silly salaries. This is very visible in the San Francisco Bay Area: we have a high level of imported nurses, but recent imports are more likely to be relegated to sadder jobs (tending the dying), without having much impact on salaries in general. In fact, some advanced practice nurses (if we can believe non-govt sources of data) can make around $150, more than many GPs.

So increasing imports may not amount to much when weighed against the market clout of the big medical chains (which doctors are joining with increasing alacrity), and the big medical labor unions and lobbies.

Incidentally, it is surprising that the WaPo article did not both to mention the already high salaries of most nurses. Might have interfered with the enthusiasm they wanted to evoke?
Excess of doctors overseas?
written by KeithOK, March 26, 2013 2:44
Is there an excess of doctors overseas waiting to take advanatge of this opportunity, or are we going to be taking them from places where there are already too few doctors and other medical professionals?
Pay for their education...its worth it for both sides
written by nassim, March 26, 2013 3:22
We could have a program where we pay the a country the cost of training physicians who chose to leave there and come to the US. Most countries' public education system trains physicians and it is somewhat irresponsible to drain them of that human resource. Even if we pay them for a full educational course (I am guessing, out of the blue, $250,000) it wills till be worthwhile for the US to have such labor brought in.
No one would accuse the US as brain-draining other nations.
BTW, given the higher quality of better education of most other countries, and very rigorous selection for medical education, probably we will end up with a lot of physicians with higher IQ's than the average of US physicians'.
written by nassim, March 26, 2013 3:30
It is interesting that we use the word "importing" in these type of discussions. It is the "free market" stupid, not importing. Remove the hurdles put up by professional associations against immigration of citizens of other nations to perform such jobs. We will not "import" them like we do cars, but allow them the choice and compensate their country for the value of such professionals.
Unions are very different from guilds. Unions don't limit admissions to schools or limit training positions (internships) like the AMA does.
No one would have a problem for physicians to unionize to negotiate for wages, vacation days, sick days, and other benefits, just like the police, firefighters, automakers, etc.
Medicare and Physicians
written by JP, March 26, 2013 6:27
It was not until today that I learned that medicare paid 55-65K per year to those medical students for their 3 years of residency. I think it is only fair that the rules should change on acceptance of this largesse.
Yes, the average med student ends up with 180K in student loans, and 10-15% of them have over 200K in loans for their education. They then receive from the public funds, Medicare, another 180K average for their residency. BUT...they can opt to not accept Medicare or Medicaid patients to their practice once they are practicing physicians. THAT should change! Up front, they should agree to pay back all residency payments received from Medicare,with interest, should they not accept Medicare or Medicare patients in their practice. The % of their practice set aside for these patients can be determined by someone smarter than I but I would suggest 8%. I arrive at this figure based on the support we give them, 3 years, and an expected practice life of 40 years. Should they fail to meet that criteria they should pay Medicare back.
written by Last Mover, March 26, 2013 7:31
In regard to comments above on residency, pay and accumulated debt, one common complaint from doctors that gets old and is particularly offensive is the notion that the excessive debt for medical school justifies high salaries necessary to pay it off.

In economics that debt is called sunk cost that has nothing to do with attracting people into the medical field nor setting prices for their services after they arrive. For doctors to claim that it does betrays a feigned ignorance of economics designed to justify the market power granted to them after completing residency in an occupation specifically rigged to maximize that market power.

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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.