July 14, 2024

Economix: Producing More Primary-Care Doctors

Today's Economist

Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

In “Why Medical School Should Be Free,” a recent commentary in The New York Times, Peter B. Bach, M.D., and Robert Kocher, M.D., proposed that medical school be tuition-free for all students.

Dr. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center, was a senior adviser at the Centers for Medicare and Medicaid Services in 2005-6; Dr. Kocher is a guest scholar at the Brookings Institution and was a special assistant to President Obama on health care and economic policy in 2009-10.

The two estimate that the annual tuition for medical students would be roughly $2.5 billion, given current tuition levels that average about $38,000 a year — although these vary among medical schools and are lower at public universities than at private universities.

The authors would not, however, burden taxpayers with that $2.5 billion, trivial though that sum may be at 0.017 percent of our gross domestic product of $15 trillion.

Instead, they would raise the $2.5 billion by forcing medical-school graduates who choose residency training in specialties other than primary care to forgo much or all of their annual salary – currently about $50,000 – during their residency training, which may span four years or more. Residents in primary-care specialties would continue to receive their salaries.

The goal of this proposal is to alleviate the much-lamented shortage of primary-care physicians in many parts of the nation. It would do so by relieving all medical graduates of their heavy, accumulated debt burden after medical school –- estimated at about $200,000 a graduate –-and by providing powerful financial incentives to steer them to primary care rather than other specialties.

Would hard-working residents in the non-primary specialties hold still for this forfeiture of their salaries? They might.

First, the forfeiture would be offset to some extent, although not wholly, by the waiver of medical-school tuition. More importantly, any medical-school graduate bent upon becoming a specialist would have little choice — because any resident is, in effect, an indentured laborer, a circumstance that society has long exploited to its advantage.

By the time someone graduates from medical school and enters residency training, he or she already has made a huge investment of time, effort and money. From the perspective of many medical students, tuition tends to be the smaller part of the total monetary cost of attending medical school.

The much larger part, often double or triple the level of tuition, is the forgone income that medical students might have earned had they taken a job right after graduating from college.

It is reasonable to assume, for example, that given their intelligence and drive, college graduates able to gain acceptance to an American medical school could find a lucrative job elsewhere, perhaps in finance – maybe even in what millions of undergraduates now seem to view as the apex of human existence, trading derivatives at Goldman Sachs.

Fortunately for humanity – and especially for the sick — monetary reward is not the only factor, or the main one, that drives occupational choice among young people. If it were, few bright college graduates today would choose a medical career.

Given the huge investment of time and money that medical students have sunk into their chosen careers by the time they complete medical school, the only way they can reap the financial and non-pecuniary rewards from that huge investment is to undergo the arduous apprenticeship called “graduate medical education” or “residency.”

In this boot camp through which all doctors must pass, residents can be made to work long hours at very low pay, making them among the cheapest forms of labor in any teaching hospital.

For years, medical educators have tried to rationalize these long hours on pedagogic grounds. I am not persuaded. Teaching hospitals have also argued for years that residency programs cost them money. Congress seems persuaded by that argument, currently bestowing on teaching hospitals $10 billion a year in subsidies toward graduate medical education.

But at least some economists, including me, are not persuaded by that argument, either.

A more plausible theory is that residents themselves amply reimburse teaching hospitals for the cost of training by the long hours they work at wages far below what these residents add to the hospitals’ revenue. With proper managerial accounting, I maintain, residency programs would be found to produce net profits at teaching hospitals — as the hospitals would quickly learn if they had to replace the labor of residents with regular, similarly skilled employees.

To be sure, teaching hospitals probably use the profits from residency programs to subsidize the charity care they routinely render the low-income uninsured. So I see the indentured-labor story as one in which society exploits residents to finance health care for the poor that society does not wish to pay for up front. The teaching hospitals merely function as a vehicle for that exploitation. (There must come in the life of every resident the moment when, exhausted, she or he exclaims: “Where is Karl Marx when we need him?”)

If, by law, teaching hospitals were prohibited from paying residents in some specialties any stipends, these residents might view the need to borrow $50,000 or so annually for living expenses as a sound investment, at least in theory.

Drs. Bach and Kocher appear to believe that an adequate number of medical-school graduates would see it that way — but also that some now choosing specialty training would opt for primary-care training instead.

But such forfeiture of their salaries for several years might alter the attitudes these specialists would subsequently bring to medical practice — and the fees they might charge for services and care. In medical parlance, the Bach-Kocher treatment might have unintended and untoward side effects. It behooves policy makers to think of them.

In the meantime, we may all ponder whether simpler solutions are available to address the shortage of primary-care physicians. I am eager to hear the ideas of others, and I will return to this issue in a while.

Article source: http://feeds.nytimes.com/click.phdo?i=5b5c0e6d5ed4f3fd2288699fc27fecf8

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