Sunday, April 17, 2011

If the Demand for Healthcare increases but the supply of Doctors stays constant, what happens to the cost of Healthcare? Resist the urge to think the right answer---policy-makers do...

Source: Carpe Diem
 Sometimes we forget there is a supply-side function in the healthcare debate. Most of the focus is on the demand-side.  As much as policy-makers would like to suspend/ignore the laws of supply and demand, we must increase the number of doctors supplied in the market-place.  Even with policies that allow medical para-professionals to do some of the routine tasks traditionally performed by doctors, we need to replenish the doctor ranks at a much higher rate if we want to reign in medical costs.  As illustrated in the graph above, the number of new doctors coming online in the last 30 years has been relatively flat.  I have to assume that the demographics of medical professionals reflect societies demographics and there will be a wave of retirements in the coming decade or two. I am not very good at math, but I can see a potential shortage of doctors on the horizon...What do you think?

Who is the gate-keeper in terms of the number of new doctors created each year?

From USA TODAY: ""The marketplace doesn't determine how many doctors the nation has, as it does for engineers, pilots and other professions. The number of doctors is a political decision, heavily influenced by doctors themselves. Congress controls the supply of physicians by how much federal funding it provides for medical residencies — the graduate training required of all doctors.

The United States stopped opening medical schools in the 1980s because of the predicted surplus of doctors. The Association of American Medical Colleges dropped this long-standing view in 2002 with the statement: "It now appears that those predictions may be in error." Last month, it recommended increasing the number of U.S. medical students by 15%. ""
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