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.
https://www.ama-assn.org/press-center/press-releases/ama-fun...