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The link has some charts that correspond with the excerpt below.

 

http://wallstreetpit.com/5769-the-medical-cartel-why-are-md-salaries-so-high

 

Greg Mankiw features the chart below on physicians’ salaries in the U.S. vs. various European countries and Canada, showing that MDs in the U.S. make about $200,000, which is between 2 and 5 times as much as doctors make in other countries. How do we explain the significantly higher physician salaries in the U.S.?

 

One explanation is the restriction on the number of medical schools, and the subsequent restriction on the number of medical students, and ultimately the number of physicians. Consider the difference between law schools and medical schools.

 

In 1963, there were only 135 law schools in the U.S. (data here), and now there are 200, which is almost a 50% increase over the last 45 years in the number of U.S. law schools. Unfortunately, we’ve witnessed exactly the opposite trend in the number of medical schools. There are 130 medical schools in the U.S. (data here), which is 22% fewer than the number of medical schools 100 years ago (166 medical schools, source), even though the U.S. population has increased by 300%. Consider also that the number of medical students in the U.S. has remained constant at 67,000 for at least the period between 1994 and 2005, according to this report, and perhaps much longer.

 

The charts below tell an interesting story (data here):

 

The number of applicants to medical school keeps going up, by more than 21% between 2003 (34,786) and 2008 (42,231), despite the fact that the number of students admitted has gone up by only about 9% (from 16,538 to 18,036) over that period.

 

Navigate: Home Business The Medical Cartel: Why are MD Salaries So High? The Medical Cartel: Why are MD Salaries So High?

By Mark J. Perry Jun 24, 2009, 2:47 PM Author's Website

 

Greg Mankiw features the chart below on physicians’ salaries in the U.S. vs. various European countries and Canada, showing that MDs in the U.S. make about $200,000, which is between 2 and 5 times as much as doctors make in other countries. How do we explain the significantly higher physician salaries in the U.S.?

 

One explanation is the restriction on the number of medical schools, and the subsequent restriction on the number of medical students, and ultimately the number of physicians. Consider the difference between law schools and medical schools.

 

In 1963, there were only 135 law schools in the U.S. (data here), and now there are 200, which is almost a 50% increase over the last 45 years in the number of U.S. law schools. Unfortunately, we’ve witnessed exactly the opposite trend in the number of medical schools. There are 130 medical schools in the U.S. (data here), which is 22% fewer than the number of medical schools 100 years ago (166 medical schools, source), even though the U.S. population has increased by 300%. Consider also that the number of medical students in the U.S. has remained constant at 67,000 for at least the period between 1994 and 2005, according to this report, and perhaps much longer.

 

The charts below tell an interesting story (data here):

 

The number of applicants to medical school keeps going up, by more than 21% between 2003 (34,786) and 2008 (42,231), despite the fact that the number of students admitted has gone up by only about 9% (from 16,538 to 18,036) over that period.

 

Because of the 21% increase in applicants since 2003 for only 9% more openings available in U.S. medical schools, the number of medical school applicants per available opening in medical schools increased from 2.1 in 2003 to 2.34 in 2008 (see chart below).

 

Because of the significant increase in applicants for a much smaller increase in available openings in medical school, the percent of medical school applicants accepted has decreased from 47.5% in 2003 to 42% in 2007, before increasing to 42.7% in 2008 (see chart below).

 

Bottom Line: One reason we might have a “health care crisis†due to rising medical costs, and the world’s highest physician salaries is that we turn away 57.3% of the applicants to medical schools. What we have is a form of a “medical cartel,: which significantly restricts the supply of physicians, and thereby gives its members monopoly power to charge above-market prices for their services.

 

In his classic book Capitalism and Freedom, Milton Friedman describes the American Medical Association (AMA) as the “strongest trade union in the United States†and documents the ways in which the AMA vigorously restricts competition. The Council on Medical Education and Hospitals of the AMA approves both medical schools and hospitals. By restricting the number of approved medical schools and the number of applicants to those schools, the AMA limits the supply of physicians. In the same way that OPEC was able to quadruple the price of oil in the 1970s by restricting output, the AMA has increased their fees by restricting the supply of physicians.

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http://www.blessnews.com/medical-schools/have-medical-schools-been-keeping-the-number-of-students-limited-to-artificially-inflate-the-income-of-doctors

 

Plenty of students who should be able to attend medical school are not allowed to because medical schools only admit a small number of students every year. Why do they not expand? The number of new doctors has remained pretty constant throughout the years.

 

You are absolutely correct! The AMA has been keeping the number of potential new doctors way below the optimum since its founding, as a way to boost the incomes of its members. Think of the AMA as the ultimately powerful labor union, but one that has life-or-death powers over the whole country. If you are a member of the UAW or the SEIU, you don’t have the power of life or death over your neighbors or members of your community, but if you are a member of the AMA, you can restrict the number of new doctors down to such a small number that is would be laughable.

 

comment: Yes. But I don’t think this is a conspiracy among the Medical Schools to reduce capacity and there is no shortage of qualified applicants. The cost of educating them is just very high, especially since professors salaries need to keep up with their peers.

 

The number of new doctors has not remained constant. From 1980-1990 the number of doctors increased by 36% while the population increased by 10%. From 1990-2000 doctors increased by 19% as opposed to total employment of 12%. Currently there is one doctor for every 300 Americans. But the number of primary care physicians has dropped to one in 3000.

 

The AMA, teaching hospitals, and licensing authorities do deliberately restrict the supply of doctors. The cost of malpractice insurance also deters people from becoming doctors and causes them to restrict their clientele and to specialize.

 

In many countries, there are so many primary care doctors, that they don’t earn much more than the average person. They also have different classes of doctors so being a specialist means something special, not just that you are selective in who you want to treat.

 

If the government wanted to increase the number of doctors and reduce the costs, they could offer subsidies to the schools for increasing capacity, and increase scholarships and loan assistance. Over the long-run this would have more impact than insurance subsidies.

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http://www.shirleys-wellness-cafe.com/ama.htm

 

The Medical-Pharmaceutical Industrial Complex - Corruption in Drug Research and in Medicine

Dr. Guylaine Lanctot, M.D. - "The medical establishment works closely with the drug multinationals whose main objective is profits, and whose worst nightmare would be an epidemic of good health. Lots of drugs MUST be sold. In order to achieve this, anything goes: lies, fraud, and kickbacks. Doctors are the principal salespeople of the drug companies. They are rewarded with research grants, gifts, and lavish perks. The principal buyers are the public - from infants to the elderly - who MUST be thoroughly medicated and vaccinated...at any cost! Why do the authorities forbid alternative medicine? Because they are serving the industry, and the industry cannot make money with herbs, vitamins, and homeopathy. They cannot patent natural remedies. That is why they push synthetics. They control medicine, and that is why they are able to tell medical schools what they can and cannot teach.

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I used to listen to Larry Elder from time to time. Of course, didn't hear the guest you mention. Anyway, interesting "opinions" expressed in some of your sources.

 

FWIW, the idea of a "single-payer" system would of course result in telling us that we can't get private insurance...thus taking away a presumed right that we can now avail ourselves. (Gee, Cuban medicine. Can't wait ! LOL; Some day maybe we can get Michael Moore to post a trip report about his experience getting a heart by-pass in Havana. LOL)

 

Doctors are forbidden from having a union or setting fees as a group. They charge what they need to charge, what they can charge. Sounds fair to me. Same with car repairs, appliance repairs, etc. The day that we allow some bureaucrats tell us how much we can get paid, will be the last day of freedom. It will be time to take up our swords and start chopping off heads. It's no wonder that libs want to invalidate the 2nd amendment.

 

HH

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You're absolutely right about unions and the AMA is not a union or guild like the United Auto Workers. The allegation is that the AMA acts like a guild. It does things like lobbying to the government for things that limit its numbers to keep wages higher. Why fight Medicare/Medicaid? Why fight HMOs? Almost without exception, every societal improvement in the way medicine is distributed has been fought by them. Totally antithesis to their hipporatic oath as individuals. If hospitals had their choice they would deny emergency services. The government has to force them to accept emergency patients. What sort of so-called civilized nation would we be if we denied that?

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HH, I believe health care, how its distributed and the costs are of the utmost importance to the average person. Almost 2/3 of all personal bankruptcies attributed to health care costs. So many of us are one catostrophic medical condition away from financial meltdown. Health care costs is probably the biggest threat to the American family.

 

What I find disturbing is that the Republicans had to come dragging and kicking to address it. Health care is now part of the national debate but it seems its the Democrats that are the only ones serious about addressing it.

 

We may not like their solutions but at least its being addressed. The Republicans have offered weak solutions. Medical Savings accounts. Talks of 'free market' will reduce costs while totally ignoring that health industry lobby's advantages it gets through successful lobbying efforts which would make free market laughable.

 

The opposition to the so-called Obamacare with the vehemence it was done suggests to me the right would rather have a broken system that destroys families than see a Democrat address it. Any suggests by the right retains the power of the industry.

 

 

Medical tourism and its rise is a symptom of the problem and how large it is in scope. Big Pharma can make tons of money with medical breakthrough drugs but greed makes them keep the costs of it high. There are stories of small pharma companies being stymied by the large behemoths of bringing their drugs to market. The whole medical system in America is wrought with overly beneficial advantages to the industry, greed, and corruption.

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I used to listen to Larry Elder from time to time. Of course, didn't hear the guest you mention. Anyway, interesting "opinions" expressed in some of your sources.

 

FWIW, the idea of a "single-payer" system would of course result in telling us that we can't get private insurance...thus taking away a presumed right that we can now avail ourselves. (Gee, Cuban medicine. Can't wait ! LOL; Some day maybe we can get Michael Moore to post a trip report about his experience getting a heart by-pass in Havana. LOL)

 

Doctors are forbidden from having a union or setting fees as a group. They charge what they need to charge, what they can charge. Sounds fair to me. Same with car repairs, appliance repairs, etc. The day that we allow some bureaucrats tell us how much we can get paid, will be the last day of freedom. It will be time to take up our swords and start chopping off heads. It's no wonder that libs want to invalidate the 2nd amendment.

 

HH

 

 

 

Hmmmmmm......... Let's see .. if a man is 50 years old in the USA and gets

 

laid off and 15 months later needs a heart transplant will he be able to afford it?

 

The answer is generally no.

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You're absolutely right about unions and the AMA is not a union or guild like the United Auto Workers. The allegation is that the AMA acts like a guild. It does things like lobbying to the government for things that limit its numbers to keep wages higher. Why fight Medicare/Medicaid? Why fight HMOs? Almost without exception, every societal improvement in the way medicine is distributed has been fought by them. Totally antithesis to their hipporatic oath as individuals. If hospitals had their choice they would deny emergency services. The government has to force them to accept emergency patients. What sort of so-called civilized nation would we be if we denied that?

Very few privately owned hospitals in Australia take heart patients, the infrastructure is just too expensive... that is, it cuts too deeply into profits.

So you can have the most expensive private health cover on the market and if you have chest pains the ambulance will drive straight past the luxurious private hospital, full of people getting knee replacements and gastric bypasses, and dump you at emergency at the nearest public hospital where you are evaluated for priority surgery along with drug addicts and derelicts. :tuxedo:

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I have no problem with doctors charging whatever they can get away with. I do have a problem with the AMA and similar groups limiting the number of medical schools to create a shortage of MDs with the intention of keeping those salaries so high. Doesn't that sound a bit like a monoply, which is banned by federal laws?

 

Furthermore, why the fark can I NOT use Medicare in Bangkok? There are several hospitals with international standards, US and UK trained Thai MDs. People fly here from all over the world to use them. I live here, but if I want to use my Medicare I have to fly to the US and pay US prices. That is absolute BOVINE DEFECATION. I'm a combat veteran and an ex-PC volunteer. I gave 7 years of my life to the US government. In return, I get treated like an unwanted relative.

 

 

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