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Physician Training And The MarketplaceTo the Editor:In reference to Kevin Grumbach’s paper (Sep/Oct 02), policymakers continue to focus on whether we are getting the number of physicians exactly right when they should be asking whether we are getting physicians to the right places. These two questions require dramatically different policy prescriptions. Most residents train in urban settings, especially in New York and Boston. Convincing a twenty-eight-year-old resident who grew up in New Jersey, went to college in Los Angeles, and attended medical school in New York to move to Kansas—because doctors are needed there—is a hard sell. This is why starting salaries for graduating residents can be two to three times higher in rural practices than in metropolitan areas. Centralized efforts aimed at computing the optimal number of new physicians to train have always become politicized, pitting academic doctors who want more inexpensive labor, obedient underlings, and rich government subsidies against private-practice physicians who want fewer doctors hanging out new shingles in their neighborhood. It is likely that more government planning or a new agency would become similarly politicized, with warring camps privately exercising their own incentives. Nor would such a centralized policy prescription guarantee that new doctors would end up in communities where they are most needed. The free market, gummed up by a highly regulated health care system, eventually works. When there was a relative glut of new anesthesiologists about ten years ago, private medical practices responded by dropping starting salaries.1 Medical students responded by refusing to go into anesthesiology residency programs, worried about their post-training economic future. Faced with fewer applicants, the programs themselves responded by cutting training slots, which has slowly resulted in a shortage of new anesthesiologists.2 Starting pay for graduating residents in anesthesiology is now soaring. Training programs have again become competitive as top medical students clamor for entry.3 It is revealing to see how quickly graduating medical students respond to markets for various medical specialties when they are choosing their residency training.4 This is proof anew that the best policies for finding the optimal number of new residents are plans printed on green paper, freely exchanged between self-interested parties.
American Enterprise Institute, Washington, D.C.
The author responds: The contention that "the free market...eventually works" in physician work-force policy is as disingenuous as it is wrong. There is no U.S. free market for physician supply. Professional regulation limits free entry into the market on the supply side, government pays for up to 60 percent of health care costs, and the training of new physicians is completely dependent on more than $7 billion annually in federal subsidies.1 The number of anesthesiologists produced in the United States is not the result of a free market. It is the result of a fundamentally distorted market and of public financing of graduate medical education (GME), devoid of government control over the output of medical training. How many anesthesiologists would this country produce if medical school graduates were required to foot the bill for their own GME—an amount well over $250,000 for the training of an anesthesiologist? Although still misguided, Gottlieb’s argument for a free market in the physician work-force would be at least intellectually coherent if he called for eliminating professional licensing and regulation, government funding of medical education, and the many other factors that are inconsistent with a truly free market. Like many people who applaud the "free market" in U.S. health care, what Gottlieb really appears to endorse is a system of generous gifts of "green paper" from government to subsidize "self-interested" private enterprises, unaccompanied by "politicized" (that is, publicly accountable) government regulation.
University of California, San Francisco, San Francisco, California NOTES
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