Monday, February 13, 2012

Another health care shortage

The same day that The New York Times was running a story about a shortage of the cancer drug methotrexate, The Washington Post had an article highlighting the need for more primary care doctors. Thankfully the Obama administration is once again on the case:
Last summer the White House launched the Primary Care Residency Expansion at 82 hospitals across the country, with two strings attached: The programs must train residents dedicated to primary care, and the residents must work in underserved areas.
So why is the shortage of needed doctors occurring? If there are insufficient numbers of primary care doctors, shouldn't high demand bid their salaries upwards, thus attracting more people to the field? No silly, of course not. This isn't the free market, it's health care -- and health care means government:
As with speciality doctors, specialty residents bring a hospital more lucrative business. A radiologist will earn a hospital $193 in Medicare reimbursements every hour, a primary-care doctor brings in $101, according to an analysis done for a congressional watchdog agency. 
“What hospitals build, in terms of their residency training, has a lot to do with what business they’ll bring in,” says Robert Phillips, director of the Robert Graham Center, which studies health-care workforce issues. “If they have a choice between funding a primary-care residency or one in cardiology, the cardiology residency will make them a lot more money. It’s a perfect storm that aligns the incentives against everything other than primary care.”
Price signals, in other words, are determined by government decree rather than market forces (recall that Medicare/aid spending accounts for about 30 cents of every health care dollar). It's almost as if central planning doesn't work very well or something.

Taking the bigger picture, government meddling has led to a shortage which in turn has produced yet further government intervention. And really, that's the story of the health care sector in a nutshell. No matter the health care problem, more government is always presented as the solution to cure the ills of our allegedly market-driven health care sector.

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