Tuesday, May 6, 2008

Follow up: The costs of universal health care are too large!

In the article, The costs of universal health care are too large!, I argued that there are two types of costs: (1) the explicit cost of paying for the program, and (2) the job loss associated with a regulated health care system.

The second cost is simply a function of regulation. Under a universal health care system, the government would have more control over what types of technologies are used, what fees to charge, and implicitly what the pay is for a medical professional. The average income in the medical profession would fall.

The Wall Street Journal ran a report entitled Medical Specialties Hit by a Growing Pay Gap on May 5, arguing that some fields of specialization are becoming extinct due to loss of income in that field. The fields being affected are those dealing with patients and performing fewer surgeries (e.g., Neurology, Geriatrics). As incomes in these fields have decreased, the supply of labor (i.e., specialists) shrank, and patients suffer.

Source: Wall Street Journal

The Wall Street Journal cites that 140 of the 400 remaining neuro-opthamologists in the U.S. will retire, and in four years, only 20 new residents have emerged. This is a problem that will certainly not improve under a universal health care system.

Under a universal health care system, incomes will almost certainly fall, bringing with them, the number and quality of medical professionals. Basic economics says that if the wage offered by a business (hospital) falls, the pool of workers from which it hires will contain a larger share of lower-skilled workers (doctors). The best and the brightest opt out for other fields of interest, leaving the lower-tier professionals. So, not only will medical professionals leave the industry, but the pool of medical professional changes. In short, the U.S. will no longer have the best and the brightest.

Please leave any comments/questions that you may have. Best, Nontruths

1 comment:

  1. This study is 100% Bunk! The doctors who did this study also conducted one in 2002 and found that the majority of doctors did not want national health care, the problem with this is that the 2 question surveys drastically differ in there 2nd question. I found this article, 60% of Physicians Surveyed Oppose Switching to a National Health Care Plan, It's worth a read.