Who’s to Blame For the Shortage of Doctors? Doctors and Politicians

After missing an appointment with a physician recently, one of us was tongue-lashed by a medical assistant who explained that the practice has a months-long waiting list for new patients.  The dressing-down included a threat.  Another no-show and the miscreant would be discharged from the doctor’s practice and have all medications cut off.

Wondering if patients really wait months to see this doctor, the delinquent called back, pretended to be a new patient, and asked how quickly he could get in.  The first available appointment at the closest location was, in fact, 2 months out.  (The wait could have been cut in half by driving to an office that was farther away.)

Two months is a long time to wait to see a doctor.   If your auto mechanic or air conditioner repairman told you that it would take a week to fit you in, you’d find someone else to take care of the problem and you’d never go back to the person who told you to wait.  Given the transcendent importance of health, why do patients who need medical assistance routinely wait far longer?  And if patients with good insurance wait for two months, how long is the queue for those who rely on Medicaid or who have no insurance at all?

According to a survey by Merritt Hawkins—one that received little press attention because it came out while Congress was debating the GOP’s Obamacare replacement plan—wait-times lengthened by 30 percent from 2014 to 2017.  On average, new patients who live in large metropolitan areas wait longer than 3 weeks to see doctors.  Longer delays are common.  In Boston, specialists are booked out a month and a half in advance, while family physicians have queues of almost 4 months.  Not all big cities are that bad, fortunately.  In Dallas, average wait time was only 2 weeks.

Residents of mid-sized cities have things especially bad.  The average wait for a new patient appointment in a mid-sized metro area is 32 days, 33 percent longer than in the major metropolitan areas.

When one considers how much Americans spend on medical services, these delays are not just lamentable; they’re perverse.  Germans can usually get same day or next day appointments to see their doctors; most Americans can’t.  We pay twice as much as they do for health care—and we pay our doctors far higher salaries too—but their access is better than ours.  That’s one reason why people go to emergency rooms so often and use ERs even more frequently when given insurance.  People with urgent needs can’t tolerate the delays that doctors impose.

Why are wait-times so long in the U.S?  Several decades ago, doctors’ groups and public health researchers convinced our leaders that a physician glut was impending.  Soon, the story went, highly trained doctors would be sweeping floors and driving taxis.  The federal government responded by paying hospitals not to train physicians and by freezing the number of medical schools and slots.  The prediction was wildly wrong (as were prior predictions that the supply of doctors was too small).  Within a few years, a shortage ensued which, owing to political control of the training process, continues to this day.  The US has 2.5 doctors per 1,000 population.  Germany has 4.1.

Looking back, it is tempting to conclude that those responsible for this fiasco were idiots.  In free labor markets, gluts are self-correcting.  When there are more plumbers, electricians, construction workers, or mechanics than there are jobs, wages fall and people move into other lines of work.  The same goes for the professions.  Since 2007, when the Great Recession caused the market for legal services to collapse, enrollment in law schools has plummeted.  With few jobs to fill, potential law students have explored other options.  Had there been a surplus of doctors, students thinking of applying to medical schools would have looked elsewhere as well.  The same dynamic applies to shortages.  When there aren’t enough people willing to do a job or profession, wages rise, attracting people into that line of work.

What are the implications of this episode for health reform?  One is that neither organized medicine nor policy wonks nor public officials can regulate the delivery of medical services better than the free market.  To the contrary, none of these worthies can match supply to demand as well as the free market can because all have too little information and deficient incentives.

To avoid misjudgments that saddle society with enormous costs, we should prefer market-based arrangements to top-down systems run by elites.  Freeing up the supply of physicians and mid-level providers like physician assistants and nurse practitioners could be part of a populist agenda for healthcare reform that, as Professor Clark Havighurst recently argued, should appeal to both Trump supporters and Democrats.

A second implication is that any policy that is designed to extend coverage to tens of millions of people will, all else being equal, cause patients to wait longer.  Merritt Hawkins found that, from 2014 to 2017, the average wait for a new patient appointment in the largest metropolitan areas grew by 6 days.  This increase was predicted.  When more people have coverage, they use more medical services and everyone waits longer in line.

This doesn’t happen in other service markets.  The US has never experienced a crisis of access to automobile repair centers even though the number of cars on the road has steadily grown.  Rising demand doesn’t generate significant delays in other markets for two reasons.  In the short-run, price increases allocate services to people who need them the most.  In the long-run, supply expands and more consumers are served.

But when it comes to health care, neither of these strategies works.  Prices don’t matter because third-party payers absorb most of the cost.  And, the number of doctors is artificially capped below the market-clearing level.  Consequently, people pay for access with their time.  If we want to fix these problems, properly diagnosing their causes is the best place to start.

Charles Silver is a professor at the University of Texas School of Law, and David A. Hyman is a professor at Georgetown University School of Law.  They are co-authors of Overcharged: Why Americans Pay Too Much For Health Care.

“Who’s to Blame For the Shortage of Doctors? Doctors and Politicians” Originally Appeared on The HealthCare Blog:  http://thehealthcareblog.com/blog/2017/04/12/whos-to-blame-for-the-shortage-of-doctors-doctors-and-politicians/