The Coming Doctor Shortage
Dr. Pardes writes today in the WSJ:
The doctor shortage was fostered in 1996 when Congress capped the number of new doctors Medicare would pay to train, a practice that continues to this day. Teaching hospitals, which now make up about 10% of hospitals nationwide, depend on those Medicare funds to pay about two-thirds of the cost of doctor-training. (Training costs include residents’ salaries, malpractice insurance, equipment, the extra time that teaching procedures add to patient care, as well as the added costs associated with caring for the sickest patients.)
Right now we train roughly 16,000 doctors a year. To keep pace with demand, this nation will need to train an additional 6,000 to 8,000 each year for the next 20 years. If we increased the number of training slots today, it would take seven to 10 years for the new doctors to see patients (four years of medical school, plus three years of residency and additional specialty training).
He goes on, of course, to urge Congress to raise the limit on the number of doctors that “Medicare” is willing to provide training to. To which I will only comment:
- Medicare does not say that you are not allowed to train doctors, they just limit how many the taxpayers will pay for.
- If someone were to argue, “well, we just cannot afford to train doctors unless Medicare steps in and does it” then it makes a lot of sense to ask, “why has it come to be this way?”
- Find me any reasonably functioning market where the growth prospects for future demand are so obvious, where salaries throughout the profession are remarkably high, where lots of people understand the opportunities that possibly await them, yet where major shortages exist today and are predicted to get worse? Contrast what happens in medicine to what has and still happens on Wall Street. I would venture to say that 50% of the majors I talk to want to end up in Wall Street for a career. Why? Because that’s where the money is. In fact, that’s where the “easy” money is. More on that in the future. And my guess is that among these 50%, only about 10% of them are going to Wall Street because of some innate desire to work on financial intermediation issues. The point being, while high salaries are still prevalent (and I think this is a problem because I believe a good deal of the income used to pay these salaries comes from monstrous crony capitalism), no one in their right mind will argue that there are not enough financial analysts and engineers running around. What I find intriguing is that I don’t sense any push by Wall Street to limit who gets to enter the industry, unlike of course in the medical field.