January 9 2012
Mamas, Don't Let Your Babies Grow Up to be... Doctors?
The doctor shortage is not news. For years, medical associations have been warning that the U.S. will run low on M.D.'s. But today CNN Money reports that many doctors are stuggling to make ends meet:
Industry watchers say the trend is worrisome. Half of all doctors in the nation operate a private practice. So if a cash crunch forces the death of an independent practice, it robs a community of a vital health care resource.
"A lot of independent practices are starting to see serious financial issues," said Marc Lion, CEO of Lion & Company CPAs, LLC, which advises independent doctor practices about their finances.
Doctors list shrinking insurance reimbursements, changing regulations, rising business and drug costs among the factors preventing them from keeping their practices afloat.
Usually, in economic terms, a shortage indicates that demand is high where supply is low. This would result in high prices (that is, doctors would be handsomely rewarded for their time).
In the case of health care, the shortage of doctors is not resulting in higher pay for doctors. Why? Are insurers scamming us and taking all of our money? The story is much more complex than that. Many of the doctors mentioned in the CNN article cited lower reimbursements from government insurance programs (Medicare and Medicaid) as the main problem.
That's what's so puzzling to me about the misnamed Affordable Care Act. Instead of reforming Medicare and Medicaid to be more efficient and better serve beneficiaries, the Act rips $500 billion out of Medicare and meanwhile expands Medicaid to include millions of new people. Just like with government anti-poverty programs, we should be trying to minimize the number of people enrolled in Medicaid, and we should measure the success of the program by how many people exit poverty.
Not surprisingly, the first steps that many doctors have taken to avoid the cash crunch is to stop seeing patients with government insurance. This pushes these patients into the emergency room, often with a bad health status that could have been avoided had they seen a doctor earlier in their illness.
That's what is so troublesome with the idea that "health care is a human right." It's not. It's a service for which physicians must be compensated. Otherwise, doctors are robbed of their pay. This isn't just bad news for doctors; it's bad news for everyone. Government involvement in medicine skews the market, and when we discourage the most talented science students from pursuing profitable careers in medicine, we all lose.
And the way things are going, they might be better off growing up to be cowboys.