Asymmetrical Information - Megan McArdle
01.23.13 7:20 PM ET
The Future of the MD
Last week, I talked about the oversupply of lawyers, and other graduate students. But there's one group that doesn't have to worry about this problem: doctors. If you can graduate and finish your residency, odds are that you will never want for work. Or so the legend goes.
Of course, Obamacare means to change this--sort of. It should push up the demand for doctors. But serious health policy wonks will tell you that if you want to control health care costs, you will need to do some combination of the following:
1. Pay doctors less
2. Shift a lot of work away from doctors towards lower-paid workers such as nurse-practitioners and physician's assistants, or those even further down the healthcare wage hierarchy.
3. Curtail the autonomy of doctors to make treatment decisions.
These are not the only things we need to do, mind you. But "bending the cost curve" is going to require limiting both the income and the power of doctors, since their treatment decisions, and their bills, are driving much of the cost spike.
Other countries have done a fair amount of this, of course. But other countries don't have our grueling, decade-long educational regime to get qualified as a doctor. Their medical graduates do not exit medical school and residency with hundreds of thousands in debt for tuition and living expenses. Residency alone--a multi-year stint of 80 hours a week, for which you may be paid less than a starting nurse--is an enormous hurdle, which is why we don't import many foreign doctors. In higher-paid, more presitigious specialties, doctors may not get out of residency until their mid-thirties, even if they don't take time off between college and med school.
The immense cost, in money and time, of becoming a doctor, naturally raises a question: what if we finally succeed in achieving the wonk vision of salaried, well-but-not-lavishly paid doctors? What happens to the MD?
The first thing to point out is that under the hoped-for models, we'll probably need more doctors. The payment reforms beign proposed are going to push us much farther down the road towards corporatized large practices capable of bearing substantial capital and regulatory burdens, and pooling risk over a large group of patients. Doctors will become employees, rather than small business owners.
But if it's hard to maximize their income, doctors are going to want to maximize lifestyle instead, working a lot fewer hours in exchange for their lower pay. This may be better for patient care (I don't really like the idea of my surgeon working twelve hours a day, six days a week). But unless you really believe that doctors are creating most of the demand for their own services, this implies that more doctors will be needed.
The second thing to point out is that it will be difficult to get people to give up 10 years of their life and $250,000 in exchange for a salary that will top out at, say, $150,000. Yes, some people want to be doctors because they just love doctoring. But ten years is a long time, and $250,000 is a lot of money. If you're good enough at school to get into med school, it probably doesn't make financial sense to go.
I don't mean to imply that doctors are all going to move to Galt's Gulch. But I would expect to see some drop-off in applications, perhaps a substantial one. This at a time when we need more doctors, not fewer. The good news, perhaps, is that I would also expect to see more people choosing specialties like family medicine, which have shorter residencies and a better quality of life than cardiac surgeons.
All that is going to leave us with a bit of a quandary. It will be very difficult, for all sorts of reasons, to cut residency requirements or make med school easier. That means that keeping the number of doctors flowing will mean some combination of cutting medical school tuitions, paying residents more, or working residents less hard. Or admitting less-qualified applicants. All of these options obviously have some drawbacks.
If we don't do any of them, I'd expect to see medical schools see what law schools have already experienced: plummeting enrollments, and severe challenges to their financial viability. There's a difference, though: falling law school enrollments mostly just effect the law schools. Falling medical school enrollment will have very visible consequences for the rest of us.