It is no secret the healthcare system is fraught with inefficiencies and shortcomings. Even though Americans spend more on healthcare than residents of any other nation, our healthcare outcomes lag behind those of other developed countries in measures of care. One of the major reasons for these woes is that physician associations behave like cartels that control the healthcare system. They limit the supply of doctors to keep salaries high, and use legislation to shut out competition from other medical professions.
Health professionals often cite a need for more doctors. Last year, a study released by the Association of American Medical Colleges warned of the “looming physician shortage” and the need for more doctors. The American Medical Association, the country’s largest association of physicians, emphasizes the importance of getting more government funding for physician residencies. But before evaluating these recommendations, policymakers should recognize that doctors are a big part of the reason we're in this mess. For decades, physicians associations have had an anti-competitive stranglehold on healthcare.
During the Great Depression, the AMA tried to prohibit its members from participating in health maintenance organizations. This act was deemed a violation of antitrust law by the Supreme Court, and is one of many examples of the AMA fighting healthcare innovation to protect its monopoly. In the early 1900s, the AMA lobbied lawmakers to shut down many medical schools. Dramatically cutting physician supply, this action eventually led to a major general care shortage in the 1960s. According to a federal district judge, the AMA conspired with other physician groups during the 1970s to destroy the chiropractic profession.
The government has also given physician associations control over every cog in the physician supply chain, which directly affects access to and the costs of care. The Accreditation Council for Graduate Medical Education, which was originally founded by five physician organizations including the AMA and AAMC, decides what residency programs will receive Medicare funding. Left to its own devices, the ACGME has consistently allocated too many slots to specialist residencies, while neglecting residencies for general care physicians.
Only 30 percent of physicians are general practitioners, while the majority are specialists. But most Americans do not need the attention of specialists. Only 1 in 5 Americans had an appointment with a specialist doctor in 2016, and still half of those appointments were for primary care, not issues requiring special expertise.
The thin supply of physicians drives up costs. U.S. physicians make twice as much as the average developed-world physician. The cost inefficiencies are exacerbated by the glut of specialists who charge higher fees and cost more. Specialist doctors like cardiologists and dermatologists earn around $400,000 a year, whereas general practitioners make around $200,000.
This disparity is a major reason why more than 66 million Americans currently live in Health Professional Shortage Areas, or areas where the ratio of population to general care providers is deemed insufficient by federal standards. In many parts of the country, especially rural areas, patients have very few options when it comes to finding the care that they need.
Accessing care is set to get much worse. The Department of Health and Human Services predicts that, by 2020, there will be a shortage of more than 20,000 primary care physicians. More doctors are retiring than new entrants to the profession can replace. And as the aging baby boomer population requires more care, the shortage will become even more chronic.
Today, the AMA and other physician groups blame the shortage of doctors on insufficient government funding for residency slots. The 1997 Balanced Budget Act capped the number of residencies that Medicare funds, a government action that certainly limited physician supply. But physician associations are not off the hook because they lobbied heavily in support of this cap. At the time, they argued there was an impending “glut” of physicians. It is more likely they were, again, trying to protect their high wages.
But even when they refuse to meet healthcare needs, physician groups are also determined to make sure other professionals cannot meet them either. Physician associations have consistently lobbied to restrict the scopes of practice of nurse practitioners, midwives, physician assistants, and other mid-level healthcare professionals. They have done this despite overwhelming evidence that giving these professionals more responsibility is safe. Expanding the roles played by non-physicians is also a promising solution to the care shortage and high costs.
As policymakers work to drive down the costs of healthcare and increase access, they need to keep in mind that doctor cartels are a major reason why healthcare is costly and limited.
Christian Barnard (@CBarnard33) is a writer and policy analyst based in Washington, D.C.
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