Saturday, April 14, 2007

The big nonsense about "physician shortage"

You hear the pitiful whining about physician shortage or impending physician shortage. Someone apparently figured out that we will need, what, 80-100.000 of us more in 20 years? And now we should open the doors to thousands of students and hurry up, make tens of thousands of new doctors, found new mdical schools, and on and on.

I absolutely disagree with the notion of physician shortage and believe it is a slick maneuver of the HMOs to gain more doctors willing to work for less.

The power of HMOs came with an oversupply of physicians that we have had in this country since the 1980s. You read correctly: OVERSUPPLY.

The cost of a service is determined by supply and demand. This is so simple that most people forget it, although the sudden rise of gas prices after hurricane Katrina should have reminded everybody. Physician earning power has dropped to about 1/3 of what it was in the mid eighties. Yes, the colleagues that were watching the first season of Miami Vice, if they had time, earned three times as much as we do.

That alone is proof of an oversupply. Studies about future demand are all nice and well. You can look at supposed demand as uch as you want, the basic economic truth is that the payments for physicians have decreased dramatically. 20 years ago an ObGyn earned 400 K and a very nice home in the best area of Boston cost about 400K. Nowadays the very same house costs 1.6-2 million and the same ObGyn (working a lot harder and seeing about twice the number of patients) earns 200K. Do the math. That means that we have an oversupply of physicians!

They only people interested in more physicians are the HMOs - in an attempt to lower the reimbursements. The HMOs are the ones who talk up a "future shortage of physicians". There is no such thing. The HMOs just need more doctors to be able to continue paying less and less.

Do not buy into the myth of "physician shortage", there is no such thing, it is pure propaganda. What they are saying is: we want to continue to pay you too little, but we want you to live in not so attractive places and work harder for less. What that talk of physician shortage means is: We do not want to do what the market asks us to do, instead we want to continue to pay what little we have been paying! There is one solution for any "physician shortage" - increase pay until they come! It's called "market economy".

We do not live in a socialistic planned economy, fortunately. The socialistic planned economy is so efficient, so great and so successful that it has brought countries as large, as powerful and as full of natural resources as the Soviet Union to its knees!

There is no good way of planning physician supply. Who knows what will happen tomorrow and how it will impact physician supply and demand? Maybe we will find the gene for motivation to exercise or the gene for weight and obesity and the manipulation of that gene will make all the heart diseases shrink to 5% of what they are now?

Planning physician supply 20-25 years into the future? Maybe another Internet style change will surprise us. Who would have predicted the impact of the internet on our daily lives 25 years ago? Well, maybe Bill Gates, but not the majority. When considering prediction for the future, do you remember what 60's thought the cars of the future were going to look like? There were pictures of large ship like cars with fins, rotating seats, driving fully automatically...Just what we have now.

So, you think we can foresee the demand for physicians in 25 years? What about foreseeing the ability to pay all those physicians? Have they considered that? Aaaaahhhh, no, not that point, we will just divide the money that is available among more people.....

After I see the income of physicians steadily rising above inflation for 5-10 yeas, and after we have made up (!) for what we have lost in the last 20 years, then, and only then, am willing to believe that we need to train more physicians. NEVER BEFORE THAT. Before that it is all HMO propaganda to me.

Your Matthias Muenzer, MD

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