It’s become a cliché that the United States has long had a shortgage of primary-care physicians (general internists, pediatricians, family physicians, general practitioners) and that this is a factor in the disarray and expense of our health care system. Yet the very idea of a protracted shortage is an anomaly in a capitalist society. A temporary imbalance of demand and supply can produce a shortage, but the shortage should not persist: price will rise to ration the existing supply, and this will both dampen demand and stimulate supply, and the combination will erase the shortage.
And this would be true of primary-care physicians in an unregulated market for health care. If there were a shortage of such physicians, their fees would rise, and this would reduce the demand for their services; at the same time, their incomes would be higher because of the higher fees, and this would induce more medical students to become primary-care physicians. So the shortage would end.
There was bound to be a relative decline in primary-care physicians because advances in medical technology increased the value of specialized medicine and so the demand for specialists (surgeons, radiologists, oncologists, cardiologists, urologists, gastroenterologists, neurologists, etc.) relative to primary-care physicians, who are generalists. But those very advances, by increasing the number of possible treatments and and also increasing, in part through better treatments, longevity, increased the demand for primary-care physicians, who “specialize” in diagnosing and treating common ailments, which are the most frequent and become more common as people age. (So primary-care physicians are both substitutes for, and complements to, specialized physicians.)
Yet instead there seems to be (though reliable statistics are hard to come by) a persisting shortage, now of long standing, of such physicians. A symptom of a shortage is queuing—it indicates that the market price is not clearing the market. There is a great deal of “involuntary” queuing in primary-care medicine, in the form of long unwanted delays in getting an appointment with a primary-care physician and refusals of these physicians to take on new patients. Of course if there is no felt urgency about seeing a doctor, there is no reason not to make appointments well in advance. But apparently difficulty in being able to be seen promptly by a primary-care physician drives many patients to hospital emergency rooms, which are very expensive.
While the fees charged by primary-care physicians have increased, their income, as well as prestige, relative to specialists has declined (even after adjustment for the fact that the specialists have to undergo longer residencies before they begiin earning real money). As a result, medical students are increasingly attracted to specialties, especially ones such as dermatology, ophthalmology, and urology, which allow for a more comfortable life style because they do not involve frequent medical emergencies. The attraction of specialization is particularly great for male medical students, who tend to have higher earnings goals and a greater desire for prestige than women, so women are becoming an increasing percentage of family-care physicians—and many of them work part time because they want to have children, and time to spend with their children. This reduces the supply of primary medical care.
The concern with the decline of primary-care medicine has become acute because of the recently enacted health care reform law. By a combination of requiring persons who do not have health insurance to buy it if they can afford to, subsidizing health insurance for people who can’t afford it, and expanding Medicaid eligibility (public health insurance for the poor), the reform is expected within a few years to increase the number of people who have public or private health insurance by more than 30 million, roughly a 20 percent increase in the number of insured. At the same time, a higher proportion of the population will be elderly. So the demand for health care will increase very substantially. Most of that increase could in principle be accommodated by expanding the number of primary-care physicians, especially because a large fraction (no one knows how large) of the currently uninsured population are young and healthy. Young and healthy people get sick, but mostly with ailments that do not require the care of specialists. What young and healthy people mainly need is diagnosis of conditions such as high blood pressure and obesity that are health time bombs, and preventive care and counseling, and both the diagnosis and the care and counseling are services that primary-care physicians provide. The need of children of poor families, and their parents, for pediatric counseling, and of the children themselves for pediatric care, is acute; and most pediatricians are primary-care physicians. Moreover, the extensive follow-up care that people with serious diseases often require can usually be provided by primary-care physicians.
The health care reform legislation recognizes that the shortage of primary-care physicians will get worse, and that this will reduce the quality and increase the cost of medical care generally, but it doesn’t do much about it. The main thing it does is increase Medicare reimbursement for primary-physician care by 10 percent. The rest (so far as I can judge from the immensely complex legislation and its as yet incomplete regulatory implementation) is subsidizing gimmicks, such as the “medical home,” which is a euphemism for delegating some of the primary care now provided by doctors to nurses.
The underlying causes of the shortage of primary-care physicians are licensure and third-party payment. I do not think it is a mistake to require that physicians be licensed, rather than allowing anyone to provide medical care, as we allow anyone to dig ditches, wait on tables, or for that matter start a new online business. Patients are in a poor position to evaluate the quality of medical care, and without licensure of physicians would doubtless be highly vulnerable to quacks. But licensure inevitably reduces supply. Primary-care physicians have to spend four years in medical school and then three years as a resident paid little more than a subsistence wage. The number of medical schools is limited, as is the number of residency programs; it has been argued (whether rightly or wrongly I don’t know) that specialists control the approval process for residency programs and use that control to throttle the expansion of primary-care medicine by limiting the number of new residency programs in primary-care medicine. Many U.S. physicians are foreigners trained abroad, which is fine, but we make them jump through loops to be licensed to practice medicine in the United States; the hoops may be justified to ensure that foreign-trained physicians are competent, but make it difficult to make up a physician shortage by recruiting foreign-trainmed physicians.
Third-party payment is a pervasive feature of American medicine. Why anyone should want health insurance other than “major medical”—that is, insurance against catastrophic medical bills—is a great mystery, as is the fact that Medicare subsidizes routiine health care of upper-middle-class people. Since disease and injury tend to be unpredictable, health insurance smooths costs over time, which is efficient, but a person could achieve that smoothing simply by saving the money that he now pays in health-insurance premiums and investing it to create a fund out of which to pay future health expenses as they occur.
But we are stuck with third-party payment, and it systematically favors specialists over primary-care physicians, because specialists tend to provide discrete procedures, which are easier for the insurers, whether they are private insurance companies or government, to cost. The care provided by primary-care physicians has, to an extent, an elastic and discretionary quality. If a hypochondriac constantly pesters his primary-care physician with imaginary symptoms, how much of the physician’s time dealing with the pest should be compensated by insurance and at what rate? How long should an annual physical exam take? How much time should the physician spend urging his patients to give up smoking? Wear car seatbelts? Avoid fast foods?
I wish I had some answers, but I don’t, given the fundamental structure of the American health care system, which is unlikely to change in the foreseeable future. If the shortage of primary-care physicians persists, queues will lengthen, and perhaps care will be rationed in other ways as well.
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Posted by: Heart and Vein Center | 07/03/2011 at 10:13 PM
"The health care reform legislation recognizes that the shortage of primary-care physicians will get worse, and that this will reduce the quality and increase the cost of medical care generally, but it doesn’t do much about it."
............... Well, we aren't so sure of this. Many of the "right" claim those uninsured get medical care by one means or another. While it's hardly ideal, they do have a point. "They" often get urgent care at ER's along with some poverty related clinics. Surely there will be an increase in efficiency and efficacy of patients actually being able to get care before a situation becomes chronic.
If, as Posner mentions, many young patients need better H/C education, such could easily be accomplished to the benefit of all, by showing a video in a group setting with a nurse to answer questions or even by providing such on the internet.
IF........ as does seem the case, "third party payment" greatly favors "specialists" over GP's why do we tolerate it? And, Ha! while considering our having next to NO control over our insurance parasites, let's go ahead and consider what, if anything, they bring to the H/C party that's worthy of the storm of paperwork and real dollar overhead?
By now IF they wanted to be in the medical sphere to provide a service, they've plenty of capital with which to create competing HMO's and such.
Given how our immigration laws work (green cards for those in "needed specialties") if we don't grow our own cadre of physicians I'm sure the ranks will be filled by Indians, Chinese and others.
Posted by: Jack | 07/03/2011 at 11:48 PM
"If the shortage of primary-care physicians persists, queues will lengthen, and perhaps care will be rationed in other ways as well."
........... One hopes the current mess of "some" being "rationed" as in the status quo is not Posner's ideal. BTW who IS "left out?" Not those on welfare, not government employees, nor military of any rank, not those with large corporations. No, largely it's those of the very "small biz" sector that gets lip service as the driver of innovation and much of the job creation.
As there is often the same problem for mid-life employees who might rather strike out on their own, access to med care, regardless of "pre-existing conditions" many mid-life folk often have, the availability of H/C should be something of a spur to economic creativity and entrepreneurship.
Posted by: Jack | 07/03/2011 at 11:56 PM
“…but a person could achieve that smoothing simply by saving the money that he now pays in health-insurance premiums and investing it to create a fund out of which to pay future health expenses as they occur.”
But since some people will not [save and create such a fund] self-directed smoothing will become soon illegal for everyone. Another step towards greater economic efficiency.
Posted by: John | 07/04/2011 at 02:22 AM
"Why anyone should want health insurance other than “major medical”—that is, insurance against catastrophic medical bills—is a great mystery, as is the fact that Medicare subsidizes routiine health care of upper-middle-class people. Since disease and injury tend to be unpredictable, health insurance smooths costs over time, which is efficient, but a person could achieve that smoothing simply by saving the money that he now pays in health-insurance premiums and investing it to create a fund out of which to pay future health expenses as they occur."
A few answers:
1. Because the unpredictable nature of h/c costs can take place well before any savings can be accumulated, while most insurance programs cover within a few months.
2. "Small" (if any medical events fit that term today) can happen frequently and become a financial burden to one indidivual. (The reason I carry auto insurance and hope never to gain from it.)
3. The (former?) middle class is running so close to the bone that even "small" shocks to the budget cause a lot of distress -- a reluctance to gamble with scarce margins.
4. In "our world" employers have purchased group policies (somewhat) efficiently, thus if the were willing to rebate the premium to the employee it would not likely cover either privately purchased insurance (major or other) nor the, often inflated fees charged to individual rubes in the dark forests of US medical care.
Posted by: Jack | 07/04/2011 at 02:42 AM
Health care reform is a general rubric used for discussing major health policy creation or changes—for the most part, governmental policy that affects health care delivery in a given place. Health care reform typically attempts to: Broaden the population that receives health care coverage through either public sector insurance programs or private sector insurance companies.
Posted by: Storage racking system Toronto | 07/04/2011 at 04:57 AM
The 20% increase is in the number of privately insured, not total insured.
The 10% increase in payments is for Medicaid (brought up to Medicare rates for a few years), not Medicare.
The problem with licensing is that it inhitbits nurses, paramedics, etc., from performing tatsks they are competent to perform. It's the medieval guilde in the modern era.
Posted by: John Goodman | 07/04/2011 at 01:36 PM
If you can't find simple answers, you aren't looking very hard. Here are a few:
1. Require all healthcare providers to post prices by CPT code for all procedures they offer on the Web. These price lists are available (though the gummint, the AMA and providers seek to hide them) for Medicare and Medicaid. You may have to file a FOIA request to get them, as I did here in Texas.
2. Require all healthcare providers to give discounts to patients that fairly reflect services foregone. For example: discount for cash payment in lieu of insurance (worth up to 40% in savings to the physician), discount for cash vs credit card payment (worth some 3%), discount for filling in for no-shows (my dentist gave me 10%). I'm sure you can think of others. I have seen a doctor twice in my adult life. Both gave me discounts because I had diagnosed my own self-limiting diseases (pityriasis rosea and HEP-A). I paid the two a total of $25.
3. A la Milton Friedman, kill off all licensing and certification. I am a physicist who does my own construction, cabinetmaking, plumbing, and electrical installation. My partner is a nurse, who examines me every day! Why can't I do my own diagnosis and self-medication (or hire Mexicans or seek care in Hungary, Czech Republic, Thailand, Mexico, Costa Rica or Brazil?)
I'm not an idiot who pays whatever a mechanic, electrician or plumber thinks he's worth. Why should I be forced to deal with physicians, dentists, hospitals or nurses on their terms? Hell, I edit medical writing professionally, and I hesitate to submit to treatment by a medical worker who doesn't wash hands after using the bathroom (the majority), who says "at risk for ..." when he means "at risk of ..." and who denies women abortion or morning-after pills. I am fully aware of iatrogenic and nosocomial illness and will not participate in an Obamacare that makes me participate in acquiring and spreading them.
4. Encourage Amerikans to seek treatment and spend their healthcare dollars overseas, where treatment is often better and far cheaper. Do you know that there are come 15M Amerikans who reside overseas, who are liable to pay federal income taxes on all income from wherever derived, some who have paid lifelong Medicare FICA taxes and some who will have to pay Obamacare penalties, who are entitled to ABSOLUTELY NO Medicare or Obamacare treatment where they reside, whether in France, Costa Rica or Brazil?
Posted by: Jimbino | 07/04/2011 at 05:02 PM
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Posted by: Cartools | 07/04/2011 at 08:51 PM
"...Do you know that there are come 15M Amerikans who reside overseas, who are liable to pay federal income taxes on all income from wherever derived, some who have paid lifelong Medicare FICA taxes and some who will have to pay Obamacare penalties, who are entitled to ABSOLUTELY NO Medicare or Obamacare treatment where they reside, whether in France, Costa Rica or Brazil?"
They have a problem though. They are a mere 15 million against 300 million voters who want, and can take, their money with a simple vote. Democracy + Collectivism at work.
When 300 million want the money of 15 million, they'll find the morality of taking it.
Posted by: El-Greco | 07/04/2011 at 09:59 PM
The problem with licensing is that it inhitbits nurses, paramedics, etc., from performing tatsks they are competent to perform.
Posted by: Software Coupons | 07/05/2011 at 01:28 AM
In Australia we experienced a shortage of doctors because of the determination of newly graduated doctors to no longer work the punishing 60 hour plus work weeks of the previous generation. Female doctors wanting to start a family may have been a factor as well. That is the numbers were adequate but they did not work sufficient hours to meet demand.
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The reason why people have non-catastrophic health insurance is that once you buy catastrophic health insurance, the insurance agency has an interest in making sure you don't get really sick, so they essentially subsidize non-catastrophic insurance to keep you healthy.
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Posted by: ulfat | 07/05/2011 at 10:56 AM
The country (at least the do gooders) wanted a more controlled, regulated business-like medical system. They got what they wanted and will have to deal with it, ie higher cost, lower quality, less access. If you need a new hip or knee, probably no problem but if you need a knowledgeable, caring, thoughtful MD to listen and analyze what your diagnosis is, good luck. My advice is to not smake, drink, use drugs and to eat a balanced diet of only caloric needs, exercise moderately, get enougjh sleep and minimize stress. Gee how much do you think I can get paid for that?
Posted by: Jim | 07/05/2011 at 11:11 AM
given the fundamental structure of the American health care system, which is unlikely to change in the foreseeable future.
And whose fault is such?
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Posted by: Andy | 07/06/2011 at 03:17 AM
Your Honor,
Do you think that paying primary care physicians more will get better ones or do you agree with your recent WSJ article that paying judges more will not get better judges? After all, human nature is human nature.
Posted by: Jim | 07/06/2011 at 08:10 AM
Remove politics from the issue and view healthcare as a basic human right - then we can make some progress.
Posted by: Economics Degrees Online | 07/06/2011 at 11:47 AM
Jim --- Mebbe you've got something! Seems even our military generals in charge of hundreds of thousands top out well under $200,000 while just some hack running an insurance parasite operation routinely carves off $10 million or more. Think that if we were to pay our Generals, even a million or so, we'd get such better management as to lay off half the military? get good results and save a lot of dollars?
How 'bout our teachers? Seems the national median is something around $30,000 or so. Think we might be getting the "dregs" who couldn't cash in elsewhere? Or? Do "we" think they're so devoted as to take a vow of poverty and slog on regardless?
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