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The Secret Ingredient for Effective Healthcare Reform

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In today’s Acton Commentary I explore how our hyper-regulated and increasingly statist healthcare system is chasing off good physicians.

A recent article in Forbes by Bruce Japsen provides some additional support for that argument:

Doctor and nurse vacancies are approaching nearly 20 percent at hospitals as these facilities prepare to be inundated by millions of patients who have the ability to pay for medical care thanks to the Affordable Care Act.

A survey by health care provider staffing firm AMN Healthcare shows the vacancy rate for physicians at hospitals near 18 percent in 2013 while the nurse vacancy rate is 17 percent. That vacancy rate is more than three times what it was just four years ago when vacancies for nurses were just 5.5 percent in 2009 while vacancies for doctors were 10.7 percent.

It’s not all doom and gloom. In an earlier Forbes piece, Scott Gottlieb, an internist and fellow at the American Enterprise Institute, argues that technological and organizational innovation will allow quality health care to be delivered using fewer physicians.

If allowed to proceed, these innovations may actually increase market freedom in one area. Physician organizations and medical schools often have replicated a pernicious feature of the traditional guild, namely, finding ways to limit the number of new physicians not purely as a quality control measure but, beyond this, as a way to ensure that existing physicians are in high demand. One example: medical schools typically demand that their students not only master the relevant skills for serving as a physician but also make them work extraordinarily long shifts on top of their studies.

The problem isn’t the demand for hard work or long practice in a clinical setting. The problem is that medical schools have frequently gone beyond this to wring cheap labor out of med students and, in the process, have made outsized physical stamina an indispensable aptitude for becoming a physician. That’s unfortunate because there are many physician jobs that do not require even average physical stamina to excel in. Thus, any reform that would create alternative avenues for talented people to train and eventually deliver high quality medical care is a good thing.

Three caveats to Gottlieb’s optimistic portrait of next-generation health care. First, as Gottlieb himself notes, while there may be enough physicians for the emerging healthcare delivery paradigm, ongoing changes pushing people into more HMO-like insurance arrangements may mean you won’t have as much flexibility about which physicians and which hospitals will accept your health insurance. As Gottlieb explains:

What Obamacare, in effect, tells Americans, is that the White House believes many people made the wrong choice when they rejected those HMOs in favor of PPO plans that offer broader access to providers (often in exchange for slimmed down benefits and, in many cases, higher deductibles).

Second, while there has been a protectionist aspect to medical schools, and while the healthcare system would surely benefit from reforms allowing non-physicians with relevant expertise (nurse practitioners, etc.) to deliver more of our basic health care, we shouldn’t kid ourselves that running off many competent and highly trained physicians won’t compromise some people’s health care. Sometimes it takes someone with a breadth of medical training to determine with some confidence that a patient’s seemingly basic problem really is a basic problem and not something more serious. The implication: whether it’s a physicians’ guild or bad government policy, anything that constricts the development and deployment of skilled diagnostic resources (human or machine) will compromise healthcare to some degree.

Third, the positive innovations Gottlieb describes require public policy that encourages rather discourages those innovations. Gottlieb and Ezekiel Emanuel make the point late in a recent New York Times piece:

The opportunity exists to deliver more services and care with fewer physicians, but it’s not a foregone conclusion. Policy changes will be necessary to reach the full potential of team care.

That means expanding the scope of practice laws for nurse practitioners and pharmacists to allow them to provide comprehensive primary care; changing laws inhibiting telemedicine across state lines; and reforming medical malpractice laws that force providers to stick with inefficient practices simply to reduce liability risk.

What is the take-home from all this? The key and too-little used ingredient for effective healthcare reform is freedom: greater freedom for insurance companies to compete for physicians and patients across state lines; greater freedom for hospitals, clinics and pharmacies to use competent non-physician healthcare personnel to provide primary care where they deem it effective, with the customer free to direct her business to the healthcare provider offering her the best combination of quality and value; the freedom to pursue a career as a physician without facing protectionist roadblocks irrelevant to the task of becoming a competent physician in one’s chosen specialization; freedom for physicians to practice medicine without facing the threat of frivolous and outlandishly expensive lawsuits when they fail to be an all-seeing and all-powerful god for an ailing patient, lawsuits that drive up overhead for doctors’ offices and all but force physicians to practice defensive medicine by over-prescribing expensive tests; and, most fundamentally, the freedom for physicians and other front-line healthcare workers to work with and for their patients instead of for a suffocating government bureaucracy.

A Prescription for Health Care Reform

A Prescription for Health Care Reform

Access to health care is a basic requirement of a just social order. Physician Donald Condit, drawing on an impressive array of empirical research, skillfully applies the principles of Catholic social teaching to this vital area of concern. 

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Jonathan Witt


  • Robert Cihak, MD

    Ironically, some of the most private medical care in the world occurred in the former Soviet Union. It was very private because it was very illegal; both the doctor and patient could be shot if they were found out.

    I myself retired from medical practice when I was about 53 years old. I found I couldn’t work for government’s Medicare program. I tried to be a good bureaucrat but couldn’t do it. That was 20 years ago.

    • Yes, doctor, funny how the “universal” systems immediately morphed into a public service and a cash-only market where those who could afford it, bought medical care. In Greece, it is the infamous “fakelaki,” the envelope stuffed with cash for your doctor. According to Transparency International’s 2011 Corruption Price List, the bribes in Greek public hospitals ranged from 100 Euros to 30,000 Euros for procedures/surgeries. That could never happen here … could it?

      • Robert Cihak, MD

        Already has, as of over 30 years ago. The now-deceased MD father of a friend of mine told me, about 30 years ago, that he knew that his wife’s doctor couldn’t keep his practice going with what Medicare was paying so he would put $25 cash in a plain envelope and address it to the doctor’s wife. And that was when $25 was worth something!

  • berryf

    I tweeted this: Price fixing in the economy always leads to unemployment and higher prices. This is the part Democrats, Barrack Obama and his cronies on the far left, and perhaps even Il Papa do not understand.

  • Jerome Bigge

    The income of American physicians is far higher than that of their counterparts in the rest of the developed world. The problem is really due to the massive overhead costs that American physicians have in comparison to their counterparts elsewhere. In Europe physicians are generally educated for the most part at taxpayer expense. Billing is incredibly simple compared to what American physicians have to endure. There is very little need for malpractice insurance because the rest of the world keeps its legal profession on a very “tight” rein where they can’t create “business” for themselves. And the figure for the cost of a regular office visit in most of the rest of the developed world is about 1/3 of what is charged here in the US.