By "medical cartel" are you referring to the US Congress? Because the actual bottleneck in physician production is in the shortage of residency training slots, and the vast majority of those are funded by the Federal government. The American Medical Association has been lobbying for more residency slots. Every year students graduate from medical schools but are unable to practice medicine because they can't get matched to a residency program.
Why do we need the federal government to fund these slots at all? Hospitals work resident physicians to the bone and bill patients exorbitantly for it. Their hours are capped at 80 per week yet they receive no overtime pay[1]. Yes, the residents are "in training" but it's not like it's a burden for a hospital to take them on - they are the workhorses that handle a huge number of cases and drive hospital revenue.
Residents are closely supervised by another physician. So it's not just paying for the resident, it's paying for the supervisor as well. And early on, the supervisor is going to be combing through the details of each patient to make sure mistakes aren't made.
That plus the throughput of residents is going to be much lower than a trained physician.
As such, Medicare pays a "training institution" premium for all billing. It's a small bomb (5%?) but pays for the resident.
Why can't the resident sign a contract with the hospital promising to work there a certain number of years after finishing residency? That's what other industries with a training period do.
The ones that don't nickel and dime their patients, or even engage in outright billing fraud.
Do you really want to move more hospitals to the latter form of doing business? Because they would be a huge net loss for everyone except the hospital CEOs.
It's the latter. Whenever they would make money, they hike pay for senior administrators, of which there are a huge number (and maybe doctors and nurses too).
To receive federal and state funding as well as accept residents hospitals have to run an ER and accept patients regardless of payment ability. Some facilities will do their best to help a patient that will be unable to pay. Others will simply stabilize the patient until they're not going to die immediately and then kick them out. Since medical care is very expensive a single non-covered ED patient could EASILY cost the hospital 250k+ per visit. For example maybe a homeless person is found and brought in unconscious. They're then discovered to have untreated diabetes, rot in their feet, and psychiatric issues. They'll be in the hospital for at least a week, surgery to clean up any rotten tissue, and then maybe a stay in the psych ER or other facility. Every day wracking up huge charges which the hospital will never be compensated for..except by spreading the loss around to others.
This looks like a crude version of socialised healthcare to me. Other socialised healthcare systems around the world should in theory face the same problem, wouldn't they? But AFAIK they do not nearly have the same cost issues as the US, at least I'm not aware of this here in Germany.
One theory I've heard that sounds plausible is that
a) insurers do not pay anywhere near what hospitals bill to uncovered patients
b) hospitals do not even expect patients to pay the whole bill, but more like 20% of it, so it is always good to contest the bill
So the problem is that hospitals are cash-strapped for systemic reasons, but can't get it from insurers or the state because those have contracts in place. So hospitals try to squeeze uninsured patients as much as they can with inflated bills, with predictably horrifying consequences. Insurers don't mind because that makes the case for buying insurance even stronger.
So one solution might be to pay for poor/homeless care via state/federal budgets. This could cover poor people up to an income level that can afford insurance.
Most/many of the homeless that come in are eligible for Medicaid or other government benefits (veteran healthcare for instance). However figuring that out can be very difficult. Many of them are incapable or unwilling to give up their names or stay long enough for social workers to get their paperwork in order. Or they're afraid of being located (for example they have warrants out for their arrest). Then you have regular uninsured people who are simply incapable of paying that come in and give fake information.
Fun fact, if you're unable to pay the full amount most hospitals will do almost ANYTHING to stop from having to send your bill to collection. Even if you say 'I'll pay $50/month forever' thats way better than they'll get from the debt agency that buys your debt.
Thanks for the explanation. Hospitals shouldn't be left alone with this, I can't imagine forwarding the costs to Medicaid would be a worse solution than the accountability problems that arise when having patients with no names, like fraud.
No hospital is going to pay for long tern psychiatric treatment unless it consists of pills during a short ER visit until social services can take over.
Many tech startups also operate at a loss. Plenty provide valuable services. Few have millions of dollars billables per workers, as doctors do. I wish the government would pay my junior engineers’ salaries.
Generally, any random doctor at a hospital provides valuable services.
I honestly can't name more than a handful of large or small startups that do anything remotely valuable. And the ones that do provide actual value don't operate at a loss...
Not doubting you (because I know that the mergers are happening a lot often these days, but could be partly because it's the natural conclusion of capitalism). Could you share any reference to the claim that most hospitals operate at a loss?
Similarly you have both prospective residents not matching into any program, but also programs having unmatched slots. These students then have a week to call around and try to get one of these slots, very often changing specialties in the process (usually to family medicine). Imagine spending $200k to go to college, get good enough grades for med school, get into med school, want to practice anesthesia or rheumatology or internal medicine only to not match and then have to choose between either waiting a year and trying again or going to the middle of nowhere Montana to a family medicine program.
Residency is a job and should be interviewed for and selected like any other job.
Would changing the interview and selection process to look like other jobs alleviate the case you're laying out?
In a similar way, there are students who spend $200k to go to college, then go to law school, wanting to practice in a certain area of law, and find out at the end that the only job they can get is poorly paying or in an area they don't want to live.
The difference is that even if you fail to get a job as a lawyer, you can start your own practice. With medicine if you cannot get residency first year, your chances of getting in drop significantly after that and you can never go out and practise medicine on your own.
Why is that a responsibility of the federal government? Why not the AMA? Of course they are lobbying for more spots, they want someone else to foot the bill. This seems like very short-term thinking. If Hospitals and practices paid for their own residencies, they could lower overall costs, and perhaps work on deals with people to encourage them to stay, etc.
I think it is because the government finds it valuable to have a well trained workforce to take care of its Medicare patients. Do you want physicians to pay for the opportunity to work for hospitals taking care of their patients?
Should the government pay me to study computer science? Should they pay for there to be more computer science training slots in universities? CS is also a valuable workforce, with massive shortages in the US. I don't really think the govt should pay for me to train, or pay to improve the number of educational spots.
At the same time, it does seem like medical internship conditions and pay are ridiculously terrible, underpaid, way overworked.
PhD programs in CS are generally paid, largely by the government via orgs like the NSF. I think this a good thing; you would have many fewer PhD grads otherwise and I think they are generally an asset to the country and the companies they work for.
I don't see why they shouldn't fund more CS and STEM spots and universities in general. They will probably see a good return on investment. AFAIK higher education is subsidized in other countries but I'm not super knowledgeable about that.
On second thought maybe it would make sense to only subsidize the residency programs that are financially unsustainable but necessary, like family medicine or non-subspecialty internal medicine. Downside to this could be that hospitals could choose to not have residents and exacerbate the physician shortage.
The AMA is the association of doctors. Why should they be responsible for paying for the training of more doctors?
If Hospitals and practices paid for their own residencies, they could lower overall costs, and perhaps work on deals with people to encourage them to stay, etc.
This is simply false. Paying for their own residencies would increase hospital costs since they don't currently pay for residency positions, and they're already free to work on deals to encourage residents to stay post-residency, including, for example, supplementing residents' pay.
>The AMA is the association of doctors. Why should they be responsible for paying for the training of more doctors?
Because an Association of Doctors with no Doctors to represent seems like a rather sad sight doesn't it?
Also, considering it is the main force behind setting the barrier to entry, it seems like a bad idea to cut them off from the consequences of the policies they push for by letting them off the hook in terms of not having a fundamental part to play in the training up of new medical talent.
Amazing how the rest of the developed world has none of these issues, no? And yet doctors are quite well-respected and high earners even in those countries.
Given the low resident pay, long line of graduates wanting a residency match, absurdly high Billings generated by residents, and AMA Boards supposedly willing (ahem) to train residents — I’d think this would be a solved problem.
It isn’t a solved problem because not all above is the case. The catch is that Boards will not train more than a few people in order to limit supply and keep wages up
Excuses like “oh the government won’t pay the resident” are shallow excuses — these are highly profitable (for the hospital) positions, not volunteer positions. They are self financing assuming the barriers to spots are removed.
The AMA is not without culpability, especially after they shut down medical schools in the 90s.
Non-matching graduates constitute a miniscule percentage, and almost none are from US medical schools. And something like 96% of them (cannot find the journal study at the moment) find physician work within 3 years of graduating.
Revenue or profit, who cares, but tax them and then spend the money on residencies.
Or just stop funding any residencies through Medicare and VA. Of course, that relies on the industry deciding to avoid the doctor shortage getting worse.
Why doesn't government intervene? Say, by handing out green cards on arrival to every doc from a certain list of "rich" countries, filling the void very quickly? Or even by making medical education a state monopoly and leave it up to the state to decide who to license?
The recent Indian government has been doing something loosely on these lines - drastically increasing the number of student capacity in public medical colleges [1]
Why don't people protest? I mean, the U.S. is a democratic country and has a strong system designed to lobby for or against anything. Most people except docs themselves should be concerned with this, why is there no lobbying movement to change things? It should be a no-brainer to fund.
Doctors, by way of Boards, limit supply as a way of keeping up wages. They are not overworked because of some lack of sufficiently interested individuals — they are overworked because few others are let into the club.
I love this in theory, but there's a lot of externalities that prevent that from happening. Apologies if I'm missing something, I'm a medical student (soon to be resident) that tries not to think about this too hard. I've thought to comment on this in the past, as this conversation pops up on HN relatively often.
I think we need a solution to two problems: First, figure out how to pay people (the hospital, the students/residents themselves, and the hospital attending physicians who spend their time teaching) to train physicians. Second, figure out how many clinical/surgical encounters a physician in training needs to truly be competent when they complete their training. This is more of a problem for surgeons, as they need x number of cases before they feel comfortable doing that procedure on their own.
For the first problem, there are smarter people than myself who pose solutions. CMS (and DHHS) pay for most of this in the US, and is a fixed amount each year with few changes since 1995. So an obvious solution without trashing our current system would be to just have Congress authorize more funding, about $100k/yr/new resident they are willing to pay for. Hospitals should also consider adding their own funding to pay for more residency spots, which is already happening. Note that hospitals bid on the hahnemann hospital (drexel) residents for about the $100k asking price ($55m for ~550 residents).
For the second, you have to decide how many years you want doctors to be training for, at their reduced salary. If you increase training time, you can achieve the clinical/surgical volume needed to become proficient, at the risk of keeping residents at the hospital for longer than they really want. You could seek out more volume at satellite clinics, but then you force the trainees to have to travel, which makes that specific training program less desirable (at least, it does for me)
> Second, figure out how many clinical/surgical encounters a physician in training needs to truly be competent when they complete their training.
This seems like the sort of thing that should be widely studied, but I can't find the terms to get nice Google Scholar results. In my field we do this sort of assessment for the users of (fairly low-risk) medical devices. It requires a team and is quite work-intensive to assess, but the stakes for insurance providers are high enough that this must already be known....
Having waited several months to get an appointment with a urologist in the PNW, I thought of a solution to this problem. Anytime the waiting time to see a practitioner of a particular specialty exceeds some predetermined time, the top marginal income tax rate for those who practice that specialty becomes 90% until the wait times are within the desired range of 2-4 weeks. It won't take long for the current practitioners to demand that schools produce more graduates. The artificial scarcity is bullshit and we shouldn't put up with it.
> That’s like taxing teachers for overcrowded classrooms to induce them to lobby teaching schools.
If the NEA restricted the number of teachers the same way the medical industry limits the number of doctors I'd say yes, this is a perfect analogy. Since they don't, then it's a bad analogy.
> Doctors can decide to set up practices in the area in their own.
Not sure about private practices, but hospitals can't just open up without the current hospitals in an area agreeing that it's under served.
> Patients can see and ask who’s the hold up is. Is the pay too low? Some crazy liability laws? Whatever.
> With this publicly available, it’s much easier to compare service across the state/nation/world without having to be on the inside.
If your city limited the number of auto mechanics and granted the guild of car repair persons control over who was allowed to become a mechanic and they only allowed one garage to open up in your town, you would correctly identify this as rent seeking behavior and not a market failure. The choices at that point would be to dissolve their monopoly on auto repair or to create conditions that would encourage their normal human behavior to attenuate the rent seeking. Do you really want to dissolve the AMA? Or would you rather encourage the AMA membership to change their behavior to not artificially limit the supply of doctors?
My solution doesn't give central orders about how to fix the problem, it simply creates a penalty when there is a problem. If the various practitioners realized they could be 20% more efficient while still maintaining quality that would be fine. Or they could create more practitioners. That would also be fine. The problem was created by the industry, the industry can fix the problem.
It's industry trade organizations that limit the number of slots at medical schools and residencies. A punitive tax on the members of the organization that has artificially limited the number of practitioners seems perfectly targeted.
If you taxed 90% of the doctor's top marginal rate, wouldn't they just work long enough to get to that rate, then take the rest of the year off? You overestimate the lobbying power of doctors and underestimate how much suffering this would cause.
And tax status. And business structure. And decision-making. And liability. And every other measure that determines it.
If you can't differentiate between hospitals and the healthcare system, you should probably spend more time reading comments in this thread than writing them.
