Mises Wire

How Government Regulations Mean Fewer Doctors

The physician shortage is real, present, and only set to worsen. A recent analysis by the of American Medical Association Colleges projected a shortage of up to 122,000 physicians by 2032. This is firstly impacted by an ageing population. As the baby boomers come into retirement, demand will increase rapidly. To make matters worse, roughly 33 percent of physicians are baby boomers. This is putting even greater pressure on services as these physicians will go into retirement.

To counter-act this, physicians will need to be replaced today. This means allowing medical graduates into residency training. But there is a growing problem that there are not enough residency positions to accommodate new graduates. This is partly due to the fact that residency is largely monopolized by the federal government. It funds the vast majority of residency training through Medicare. This includes the funding of residents salary to the tune of $61,200 per year.

This means private programs are being crowded out, and fewer options are available to new grads seeking a residency. Naturally, if government is paying for residencies, hospitals are unlikely to start coughing up the fees themselves. While some private funding does occur, it is very minor. It is because government has involved itself so significantly in training that private funding has become such a small part of the doctor-training marketplace.

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Meanwhile, there are as many as 65,000 unlicensed foreign-trained doctors across the country. In Southern California alone, there are an estimated 3,000 medically trained Latino immigrant doctors who aren’t practicing medicine. For them, the transition to being a US-licensed doctor is a costly and time-consuming process. One which many lack the resources for. Consequently, many are forced into working McDonalds shifts to get by. At the same time, they are working long hours; not only to survive, but also pay for the exams. On average, such exams cost $1,846. All the while, they are also trying to study for these exams while working menial jobs.

Many international doctors are hard working. To go from practicing medicine to cleaning floors shows their dedication. The high US salaries are obviously a huge incentive, but that is a result of strict regulation.

Even once international doctors complete the ‘STEP’ exams, they are still left trying to obtain a residency. While 95 percent of US doctors obtain residency, only half of those trained abroad received a place. Part of the reason is that those who received a medical degree from abroad are not considered to be qualified for residency.

What Can Be Done?

One solution has been tried by UCLA. It introduced an International Medical Graduate (IMG) program. The IMG program provides test prep classes and clinical observations with UCLA doctors. It also covers the cost of the US medical board exam and provides a monthly stipend.

Most importantly, this is funded by private donors. In return, the doctors are required to work in underserved areas of the state for up to three years.

The program has already trained over 129 doctors. On a nationwide scale, similar programs could reduce the physician shortage dramatically. The main issue however, is that the residency programs are now largely considered to be the domain of the government.

Reduce Restrictions on Medical Residency

Another solution is being tested by the states of Missouri, Kansas, and Arkansas. While the specifics vary by state, they have all passed laws to allow unmatched graduates to work in medically underserved areas without doing a residency. These positions are referred to as “assistant physicians” and “graduate registered physicians.”

The issue however, is that there are still strong restrictions in these places. Kansas, for example, only allows graduates from the University of Kansas School of Medicine. Arkansas also only allows medical graduates with ties to the state. Missouri by contrast allows any medical graduate that has completed Step 2 of the United States Medical Licensing Examination. They all require a level of qualified physician oversight, but Missouri is the least restrictive.

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Allowing medical graduates’ fast track access will reduce the physician shortage somewhat. However, there are initial reservations over the quality of care offered. Research by the Journal of the American Medical Association (JAMA) found that those assistant physicians who were licensed in Missouri scored significantly lower pass rates compared to US medical graduates. However, the research was based on less than 100 assistants, and is based on exam results rather than actual performance.

Research on the matter differs dramatically from the regulatory agenda pushed. In fact, physician assistants are associated with better experiences for patients, with no indication of lower quality. Now the AMA isn’t against physician assistants, just so long as they are dependent on a licensed physician. This protects the financial integrity of existing physicians, while still leading to a shortage.

There is little evidence physician assistants left to their own devices would lead to lower-quality care for patients. But, of course, the AMA is against the idea. However, the existing certification process is hardly effective as it is. Over 250,000 people died in 2013 alone due to medical errors. That puts medical errors as the third biggest killer in the US after cancer and heart disease. So even though the US has perhaps the most highly regulated market in the world, it is still making critical errors. Fast-tracking qualified doctors should be considered. The experiments in Missouri, Kansas, and Arkansas show potential.

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