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The Guild-ed Age
Health Care Rent Seeking in 90 Seconds

One way to make a service cheaper is to increase the number of people who offer it—and nowhere is this more needed than healthcare. In the brief video above, Vox’s Matt Yglesias explains how only 19 states and the District allow nurse practitioners broad powers to do primary care on their own. The rest of the country, including some of the biggest states like Texas and California,does not. Yglesias is right to hone in on this as one clear example of rent seeking on the part of doctors, who don’t want competition from NPs. But there’s another example he doesn’t mention in the video: federal residency restrictions. We need more NPs to compete with doctors, but we also need more doctors to compete with doctors. The Advisory Board Company explains why spots for post-medical school residency spots are limited:

Currently, the cost of training a new resident is about $145,000 a year, and Medicare currently funds more than 75% of doctor residencies.

However, the number of students accepted into federally funded residency programs has been capped at 85,000 for the past 15 years. In addition, federal Medicare payments have been cut by the federal health care reform law and many states face deficits that prevent them from contributing training funds, according to AAMC Chief Policy Officer Atul Grover.

The restriction on federal funding for residency programs also impacts medical schools. According to the National Resident Matching Program, the number of residency applicants exceeds the number of available positions, preventing medical schools from expanding.

And that’s still not the end of it. There are also caps on the number of federally funded spots for foreign physicians in the U.S., mixed with cumbersome regulations to keep them out of the system. It’s long past time to open the flood gates and let new care providers into the system.

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  • Andrew Allison

    Why is Medicare funding more than 75% of doctor residencies? Clearly, Medicare has an interest in increasing the supply of doctors, but 75% funding seems too high. Worse yet, the doctors are, as note, furiously resisting expansion of their number and the utilization of NPs.

  • ThomasD

    Matty wants to equate nurse practitioners – who typically have a combined five to six years of education, to physicians, who have a minimum of ten years of education and training?

    Or, put another way, the people of those 31 other states have decided that they would rather their primary care be provided by, under the direct oversight of an actual physician.

    • Andrew Allison

      Come now! First, we’re taking about primary care. Just how much of that requires 10 years of training? Secondly, the people of the other 31 Sates haven’t been given the opportunity to decide how they would rather receive their primary care.

      • ThomasD

        Clearly your first statement is sarcasm.

        Primary care, by definition being the first patient access or case presentation, will quite literally involve every possible kind of presentation, and every sort of patient, from the most basic, to the most complex.

        To be certain, a large portion of those patients might be farmed out to less qualified practitioners for medical management once the scope and extent of their health problems are known. But absent that knowledge how can one be certain precisely which patients those actually are?

        The alternative is that patients present to a gauntlet of gatekeepers, who either choose to treat a recognized condition, or recognizing excessive complexity or severity (or just plain being flummoxed) kick you on up the chain of knowledge, training and skill. Which is, perhaps, workable so long as you do not mind the inevitable delays, and the very real risk that the less qualified caregiver might assume responsibility for care beyond their abilities (either out of ignorance, or perhaps hubris.)

        And, the States being responsible for regulating professional practices within their own borders, and all having representative republican forms of government, it is reasonable to conclude that if the people of any of those respective states had a strong desire to allow mid-level practitioners independent practice authority then that fact would be reflected legislatively.

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