Thursday, February 14, 2013

Open The Doors To Immigrant Physicians!

Since I recently poked at my friend, Dean Baker, let me agree with him strongly on a recent post of his dealing with an important issue widely ignored, the need to relax our strict immigration rules for physicians.  It is widely agreed that the major threat to future US fiscal solvency is the rising cost of medical care.  US physicians are paid on average $250,000 per year, more than twice what European ones are, and simply higher than any others in the world.  If salaries were to fall to European levels, we would save $100 billion per year in medical costs. However, neither political party is pushing this, and it is rarely discussed among the many ideas that get put forward regarding controlling medical care costs.  Almost certainly this reflects the power of the AMA with both political parties. 

A sign of this ignoring is a recent NY Times article on STEM immigration that Dean links to.  He very reasonably points out how there is no mention of the physician issue, and indeed the US has a shortage of physicians, particularly of primary care ones.  He has also long complained about high income professionals such as doctors and lawyers being for free trade, but imposing immigration restrictions on potential competitors for themselves.  For more discussion, see http://www.cepr.net/index.php/blogs/beat-the-press/why-arent-they-talking-about-immigrant-doctors .

12 comments:

Bill said...

Doctors are for free trade?

Bridget Magnus said...

If we want to "do something" about the fact that American doctors are paid too much, we must first do something about the fact that they graduate medical school with an average 6-figure student loan debt.

Also, I think you'll find that primary care providers make substantially less than $250k/yr.

And finally, not all FMGs (Foreign Medical Grads) are really up to American standards.

rosserjb@jmu.edu said...

Bill,

Most high income professionals tend to favor free trade, at least more than lower income workers, but not in their own field of course.

rosserjb@jmu.edu said...

Bridget,

I am not opposed to doing something about the high cost of med school and the associated debt burden. Heck, I have a daughter who is an MD and still carries debt. However, while that debt sounds high, it about equals the annual difference in salary between the average of US and European physicians.

US physicians also face the burden of high malpractice insurance. I support reasonable reform of that as well.

Even after taking account of both of these, even primary care physicians in the US still do better than those in other countries.

I am also certainly for not letting incompetent doctors into the country, but there are plenty in other countries who are very competent, many of them more competent than the ones here. After all, look at the awful stats on life expectancy and infant mortality and so on for the US. I have experienced doctors in other countries, and many of them are quite good. Yes, we are tops in a few areas, such as most cancer treatments, but in many areas our highly paid doctors are not at all delivering for what they are being paid.

Bill said...

Thanks, Dr. Rosser. :)

I used to believe in free trade, myself. Before NAFTA.

Bill H aka run75441 said...

Rosser:

Too broad a statement I believe and when I get to some place comfortable, I will read Dean's article also and reply. If we look at the spread of salaries paid, the average cited tends to the low side of the pay spectrum as shown in this 2010 study:

Family medicine: $189,912.

• Internal medicine: $201,805.

• Pediatrics: $188,276.

• Geriatrics: $186,422.

Contrast that with the mean incomes for a sampling of specialists:

• Anesthesiology: $446,568.

• Cardiology (invasive): $533,326.

• Gastroenterology: $539,957.

• Orthopedics (spine): $777,988.

I believe the policy might want to be skewed towards allowing more specialists into the country rather than the lower end of the pay spectrum which under the PPACA, income will be skewed towards. I do not believe $250,000 annually is that much in an annual salary and tends towards the upper end of the middle income bracket.

$100 billion is a nice chunk of change; but in the scheme of things there are bigger fish to fry such as cleaning up the inefficiency of Medicare which as Maggie Mahar points out could save as much as $300 billion annually. More could be saved also by allowing Medicare to negotiate more of their needs in pharma and medical/hospital supplies.

What is sustainable growth for healthcare? Glenn Follette and Louise Sheiner in their study "AN EXAMINATION OF HEALTH-SPENDING GROWTH IN THE UNITED STATES: PAST TRENDS AND FUTURE PROSPECTS took on the CBO's analysis of sustainable healthcare in their study. The end result is healthcare is sustainable at 1% annual growth. EOM December Medicare was at 2.4% and commercial insurance was at ~7% proving it can be done if the right approaches are taken.

More later when I have some more time.

ProGrowthLiberal said...

Even conservative Greg Mankiw supports Dean's proposal. In fact, his blog has made the case for allowing well trained foreign doctors to migrate to the US.

rosserjb@jmu.edu said...

I would agree with Bill that we should let more specialists in, although we are perceived to have a shortage of primary care physicians. That our health care system has all sorts of weird distortions is not surprising. This is one of the reasons I get frustated when discussing this issue with libertarians/conservatives who declare that free markets are always more efficient. I think everybody reading this probably knows that although our system is much more private sector oriented than other OECD nations, including being the only one not insuring everybody, even after ACA and in spite of the dictum of even Friedrich Hayek in the Road to Serfdome (yes, he was for universal national health insurance), our health care is far more expensive than any other nation's, but with embarrassingly bad health outcome.s

Bill H aka run75441 said...

PGL:

That Greg Mankiw might agree with a certain course of action does not make it a truism. Come on PGL, you are grasping at straws here. The bulk of helathcare costs is in the Service for Fees cost model. Change the cost model from selling the chrome trim on the service to something which makes sense such as a more efficient engine and we have a better outcome. Understand the dynamics of today's healthcare if you wish to change it.

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Chogavl Dave said...

But isn't how a phenomenon actually works long evening dress closely tied into how it's perceived? I think you're giving debt too much credit (ha). It's not physics, it's about agreements between people, which are inherently cultural and affected by how people perceive debt. The experience of giving/receiving debt would inevitably be influenced by those kind of perceptions. I don't really care about this guy's book but to just throw out an entire field of inquiry like that is kind of harsh, to say the least.