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Martin Odber

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Can the shortage of doctors be solved using an adaptation of the third law of supply and demand?

The third law of supply and demand states "If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price."
( http://en.wikipedia.org/wiki/Supply_and_demand )

If we increased the rate of new doctors entering medicine (using mechanisms such as but not limited to; subsidizing doctors education, further compartmentalizing aspects of health care etc ) until we reached a surplus state then would waiting times and the cost of healthcare go down accordingly?

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    Sep 12 2013: It seems clear to me that the bottleneck is our system of education which has a vested interest in limiting competition for those who pay them dues and an even more obvious interest in bloating curriculum to try and justify their ludicrously high tuition. The Netherlands where I lived for more than a decade has affordable universities that are open to anyone with reasonable aptitude and not surprisingly they have affordable healthcare and even export some medical grads. They also do not allow Pharma to loot the populace and regulate insurance companies and make it unprofitable to sue a doctor for malpractice both for the patient and his lawyer. IF we could make the term "internationally accredited" mean what it sounds like this problem would soon evaporate. Instead jump through and over the barriers to get ones diploma recognized is more difficult than writing a dissertation in many cases. These artificial "protections" do not actually assess competency. If they did I would be support them, they just protect the monopoly of the diploma mills.
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      Sep 13 2013: Chad, would it be possible for you to provide us some more specific information on how the Netherlands manages the tasks you spoke of and what the levels of service etc are? It does sound very interesting but I have to admit I'm ignorant of how things are done there.
      • Sep 13 2013: Yes, information such as population of the Netherlands and individual income tax rate. Also, is there an immigrant problem in the Netherlands ? Do they have thousands of people flacking to the country on a monthly basis ?
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        Sep 13 2013: Martin tuition has been 1500 Euros per year, regardless of course of study. My niece paid the same for medical school. Luis the population is a little over 16 million. No they do not have as much of a problem with illegal immigrants but they do have a Muslim population that is resistant to integration. They do not have fancy facilities nor multi million dollar sports programs but I know their professors get better benefits if not more pay. Income taxes are a bit higher but peak at 50% with the average about 30%.but a lot of deductions are still possible so that the burden is not heavy. Sales tax had been 19% but has recently gone to 21% though none on food. Overall I would say living standards are better although space is tight. The big difference is that they have truly affordable health care and good public transportation + longer life expectancy instead of bragging rights about having the best military.. They walk their talk when it comes to taking care of their people. a third less infant mortality speaks volumes. Higher GDP per capita also speaks to a better educated populace.
    • Sep 13 2013: I would like to amplify Chad's point regarding education and doctor costs. A friend of mine is currently in medical school. The four year experience will likely cost around $250,000. Had he skipped medical school, but instead become a chemist, he would have been earning around $70,000/year. He calculates, though I have not checked his math, that to break even over his lifetime, he must earn $250,000/year as a physician. This takes into account the earnings he has forgone for the eight years between the start of medical school and the end of residency, including the interest on the loans he must take to get through medical school. Assuming he is an average medical student, this means that we must pay an average of about $250,000/ year to physicians in order to ensure an adequate supply. The Netherlands subsidizes education, and can therefore pay less. My knowledge of Canadian medical school costs is limited; I am pretty sure it is less than in the US, but more than the Netherlands. Either way, I think we must realize that the supply of physicians is bounded by the need for them to earn a profit over other professions over the course of their lifetime.
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        Sep 13 2013: So essentially if we were to devise an inexpensive way to educate physicians to current standards that would prove a key component to downsizing expenses and increase supply?


        Tina Wang,
        So then the government is interfering with supply and demand by limiting how many spots there are in schools for aspiring doctors. That's a new wrinkle I was not aware of.
        • Sep 13 2013: I cannot say that I understand the politics and economics behind Canadian medical schools but as far as I know, the supply is there. There are far more premed students aspiring to gain entrance into medical schools than there are spots for them, and the ones turned away will probably make an equally good physician as the ones accepted. The schools themselves are even agonizing over having to turn away these other above exceptional applicants. The problem is that the spots each school can offer is limited by the public authority. Canadian medical school tuition is already largely subsidized by the government and hence they have the final say in how many positions there will be available, which is based loosely on the anticipated demand for physicians, which loops back to the question if a surplus will lead to lower healthcare cost, which means that we can afford to put more doctors into our system...

          I do not think lowering education cost is the point here as there will be more who are willing to pay more to become a doctor.
        • Sep 21 2013: Indeed, finding a less expensive way to educate physicians would allow more physicians to be educated. Both the US and Canada limit the number of medical school positions available. The reason, basically, is that physicians are enormously expensive to educate. The tuition paid in the US covers at most one-third of the cost of physician education. Limiting that subsidy would raise tuition beyond any level of affordability; presumably the same problem exists in Canada. To limit total costs, the number of slots is limited. The supply of physicians therefore has little relation to the need.

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