Uwe Weighs In: More Debate on the Doctor Shortage

For some time now I have been saying that it is possible to insure the uninsured, yet leave them with less access to care than if you had not reformed at all. More generally, it is possible to expand health insurance coverage and yet leave vulnerable populations as a whole with less access to care. The reason: If you increase the demand for care (with more insurance) but leave the supply unchanged, the rationing problems will intensify and if vulnerable populations are in plans that pay providers below market fees they will be pushed to the rear of the waiting lines.

This may have already happened in Massachusetts. It is even more likely under ObamaCare. The reason: ObamaCare does something really, really dumb. It forces all of the non-vulnerable people to insure for a whole long list of “preventive services” with no deductible or copayment and by the time doctors get through giving all those tests and screenings to healthy people they may not have any time left for the patients who happen to be poor and sick.

BTW, I’m not the first to draw attention to this problem. Aaron Edlin and Dana Goldman wrote about it two years ago. But it is largely being ignored in the health care media. Aaron Carroll acknowledges we are going to have a doctor shortage, but he claims it “has absolutely, positively nothing to do with ObamaCare.” He is surely wrong.

You would think that Uwe Reinhardt would be able to understand this. But apparently not. (Is there such a thing as willful ignorance?) Anyway, he responds to my WSJ editorial on this subject by writing:

Opponents of the health care law [ObamaCare] see in these numbers one more useful piece of ordnance…Sometimes this critique is styled as concern for the poor, on the strange theory that having no insurance coverage and ability to pay for care is better than having insurance coverage but having to wait for a doctor’s appointment to get non-emergency care.

I’ve been an advocate of a form of universal coverage for many, many years. However, I do not favor Rube Goldberg health reforms, designed by special interests to further their own greedy ends — without regard to its effects on those least able to defend themselves.

Comments (44)

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  1. Dayana Osuna says:

    Once again, right on the spot!

    Here is a short little video by Dick Morris I came across online that gives you some more insight on this issue.


  2. Ken says:

    I agree with John.

  3. Vicki says:

    I think Uwe Reinhardt is pretending not to understand.

  4. Paul H. says:

    The most interesting idea here is that health reform could end up hurting the very people the reformers thought they were trying to help.

  5. Devon Herrick says:

    The notion that a doctor shortage is looming and doctors are increasingly difficult to see is something that strikes a nerve with many people. Within 12 hours of the WSJ piece going up, more than 300 people had commented on it. This jumped to more than 800 within 36 hours after posting. Readers posted 900+ comments in less than three days. For most Americans, health care boils down to whether you can afford to see your doctor; and whether you can find a doctor who will see you on a timely basis.

  6. Uwe Reinhardt says:

    It would be interesting to ask people without health insurance or those with very shallow in insurance how convinced they are by John’s argument.

    There was a good study on additional Medicaid enrollment in Oregon (NEJM) that speaks to that issue.

    I am not pretending not to understand. I am trying hard to understand, out of respect for the Great One. Trouble is, you guys are just not convincing.

    Try harder, with better arguments.

  7. david says:

    The average American sees a doctor 3.9 times a year. The OECD average is 6.4.

    The average American spends $8,200 on healthcare each year. The OECD average is $3,200.

    Since we see doctors half as often and pay twice as much, you wouldn’t think we would have a shortage of doctors. Aren’t market forces supposed to fix that problem?

    In 1993, when the OECD first began collecting this data for the US, there were 2.1 physicians per 1000. The OECD average was 2.5.

    Now, there are 2.4 physicians per 1000 in America but the OECD average is 3.1. If you think there’s a doctor shortage in America, I agree, but it has nothing to do with ObamaCare, unless prospective doctors have been planning for ObamaCare for 20 years. Might ObamaCare make it worse? Maybe, but that doesn’t mean repealing it is the answer. There’s a bigger elephant in this room.

  8. seyyed says:

    This is a very interesting article. I’m not as well versed in the entire healthcare debate so forgive me if my post doesn’t make a whole lot of sense. I had never been exposed to Goodman’s policy prescription to health coverage, which I do find interesting. However, it seems that both Obamacare and Goodman’s plan have the same end goal: to provide coverage to uninsured americans. That being the case, how does Goodman’s proposal sidestep the problem of doctor shortages when you create a demand for healthcare, albeit one that does not require insurance.

  9. david says:

    @sayyed, I’ll explain it for you. Under ObamaCare, poor people pay with their time. Under GoodmanCare, poor people pay with their lives.

  10. Kyle says:

    Perhaps Dr. Goodman was talking more about the effect of millions of additional enrollees on an already insolvent system..

  11. david says:

    Then it isn’t the millions of additional enrollees but the insolvent system that is the problem, and blaming ObamaCare for it would be like blaming the Community Reinvestment Act for the subprime mortgage crisis.

  12. Uwe Reinhardt says:

    To Kyle:

    I am not sure what you mean by “insolvent” here. In corporation finance we call a firm insolvent when the realizable value of its assets fall short of its debt. So how does that concept apply to health care?

    As to the added burden of the uninsured, forgive me if I find the hand-wringing on the right over the health-workforce implications of the ACA a tad insincere. It suggests a degree of desperation.

    After all, it is not that the uninsured do not get any health care. This blog has made much of the fact that most (not all) of these folks are on the younger side and that they already do get health care, either self-financed or with indirect subsidies. In fact, careful research by Jack Hadley and colleagues has shown that they do receive close to half the health care similarly situated Americans with health insurance get. So we need only top off the other half for them.

    I grant you that covering the uninsured is likely to contribute to global warming — give me a minute and I’ll make a case for that — but really! Don’t people have something better to do and to throw at the ACA?

  13. Dr. Steve says:

    Prof. Reinhardt, it is to bad all of us don’t have an economics advanced degree so we to can see all the promises government is making and the lack of money as something but insolvent. For the uneducated it is kitchen table accounting.

    Let us not forget that part of this discussion regarding inadequate medical personal to cover all the mandated services is the mandated coverage that is not really an insurance product. There is not consensus that all the screening and preventative measures will save money or lives, but they sure as hell will make a problem with access to the medical care personal.

    Am I calling for rationing or denying medical care. No. It is up to the individual to make the choice what to do and when, where to get the service, and the standard of the provider they choose. And let us return to having an insurance product and not some sort of convoluted system of prepaid medical services at an imposed discount whether you want it or not.

  14. Linda Gorman says:

    Good heavens, this is not hard to understand. Anyone who has taken Econ 101 or tried to hire people for unpleasant jobs understands what’s going on here.

    If you offer to pay people less for some service, they will supply less of it. If the demand curve remains the same and one lowers the price paid in a system that was formerly in equilibrium, the quantity demanded is greater than the quantity supplied and presto, there is a shortage.

    Medicaid already pays physicians less than their cost (unless they work for Section 330 health clinics or in some other preferred reimbursement arrangement). ObamaCare will make things worse by reducing Medicare payments to Medicaid levels. When this is coupled with putting more people into coverage that essentially zeros out any out-of-pocket payments, it is silly to claim that the system will remain in equilibrium.

    In the real world, in most countries in which government controls care, shortages take the form of waiting. There are waiting lists for hospital beds, waiting lists for primary care appointments, waiting lists for diagnostic imaging, waiting lists for surgery, waiting lists for specialist consultations, waiting lists at the ER, and waiting lists for waiting lists.

    People die and get sicker on waiting lists, but as long as the global budget is what it is and the hospital worker unions and other special interests are happy, nothing much changes. Most people who support ObamaCare appear to prefer to assume that waiting lists do not exist, at least when they do comparative health system evaluations so I’m not surprised that they now have difficulty understanding them.

    In the US under the pre-Obama system, there was enough slack in the system so that people who couldn’t pay generally still got care, often very expensive care. And yes, they may have had to wait just like people on Medicaid, at the VA, and in the Indian Health Service.

    Experience with other populations trying to get care under resource constrained conditions, like those in the VA and the Indian Health Service, the UK, TriCare, Sweden etc. suggests that systems in which governments set prices and control resources deploy those resources extremely inefficiently. Cost goes up, quantity supplied goes down and the poor are denied care both because the facilities they have access to are crummy and because those with better resources and connections jump the lines.

    The Oregon study also supports John’s contention. People reported improvement in self-reported health one month after they won the lottery to be on Medicaid but before their utilization increased. The utilization increase, people consumed 25 percent more health care on Medicaid than off of it. There was no change in emergency room use, and no detectable change in mortality after a year.

    A fair amount of self-selection was involved–there was a waiting list of 90,000 people to be on Medicaid (a shortage, anyone), 30,000 people were selected to apply and not all of them followed through.

    In short, the Oregon results look a lot like the RAND Health Insurance Experiment results when it comes to utilization.

  15. Uwe Reinhardt says:


    Let’s look at what the Oregon study actually concluded:

    “It’s hard to tell from the current data whether objective, physical health has improved. The evidence we have to date suggests that at least some of the improvements in self-reported health probably reflect a more general sense of improved well-being and reduced stress; for example, the improvements in self-reported health start to show up after only a month of insurance coverage and before health care use has started to increase. Of course, our findings of increased health care use and increased access to care suggest that physical health may also have improved or will improve. We will know more when we have data from the second year, when we collected information on physical health measures such as blood pressure, obesity, cholesterol, and blood sugar control. (Currently our only objective health measure is mortality, on which we were unable to detect an effect.) Whether it was health or general well-being (or both) that improved, both represent potentially important benefits of Medicaid, along with the reductions in financial strain.”

    Part of the problem here is that the study assessed the experiment shortly after its implementation, when it may take some years before noticeable changes in mortality occur. Also, a psychiatrist probably would tell you that a greater sense of financial security can contribute noticeable to reported well being, including mental health and stress.

    So I am not sure what point you are trying to make.

    Finally, if we grant that Darth Vader’s fifth column on Earth — the US government – does everything wrong, deliberately and mischievously, why haven’t private health insurers paid primary care physicians better relative to specialists? Are they also of Darth Vader insurgents?

  16. Dr. Steve says:

    Prof. Reinhardt, kind of reaching aren’t you? If the measure of success is “feeling” better maybe a Shaman should see everyone first and we will see how much we save?
    And your last paragraph? …Government does everything wrong, deliberately and mischievously…..?
    Government is incapable of doing everything wrong, deliberately, regardless of motive. That is the point we are making. Government has a terrible record regardless of what it endeavors to do. Give me a free market for a change instead of the corporatism we have had for the last half century or more.

    As to specialist’s pay. Ever watch a doctor show on TV and see radiology/imaging studies flash on for an instant in the opening credits. Most experienced radiologists can read the exam in that flash. It is experience and special training. I thought you economists made the case for efficiency of specialization and higher compensation as a result to the “specialist”.

  17. Uwe Reinhardt says:

    Dr. Steve:

    I take it that if you had to take a hill in, say, Hellmand Province in Afghanistan, you would rather Have Haliburton do it that a platoon of Marines. Ok. I get it.

    As to specialist pay: Did you ever take Econ 101 or, if so, actually attend the lectures?

    There we teach that the compensation people get are determined at the margin, where demand and supply intersect. We do not teach that people get paid for their degree of specialization.

    So, for example, if it were observed that we have a shortage of PCPs and a surplus of radiologists, we would conclude that PCPs are underpaid relative to a market clearing equilibrium pay and the opposite for radiologists.

    For example we use this framework to explain why diamonds, basically rocks with limited use, are so high priced while water, the elixir of life, most everywhere is so cheap.

    That’s be $500 for the lecture you missed as an undergraduate.

  18. Dr. Steve says:

    Prof., I get it now. We should pay men with shovels more than one who knows how to use a backhoe.

    I’ll keep my 500 dollars.

  19. Kyle says:

    David, I completely agree that access to healthcare should be a right, and that we should take a good hard look at the system. Compared to the OECD average, and considering our booming medical tourism market, access to quality care for many Americans is atrocious. My question was if the system is actually prepared to handle the influx.

    Dr. Reinhardt, while I have respect your expertise, I have to ask, what was your question for me? I chose the term deliberately, and am not a hand-wringing conservative. Please explain how exactly our Healthcare system is solvent, when the 2012 Trustees report says that current Medicare forecast models are..insolvent. Any supply-side economist, for will tell you that legislating an increased demand without addressing supply shortages, as Dr. Goodman suggests, is (again) insolvent.

    If we can cover Healthcare by “topping off” existing coverage, fantastic. Show me how it works on paper.

    Furthermore, having taken ‘hills’ in Muqdadiyah and Sadr City, let me see if I can address your metaphor. First of all, it is counterintuitive. The U.S. was forced to hire contracts because it refused to pay those ‘Marines’ enough to increase the supply of willing soldiers. Petraeus’ COIN doctrine addressed the government’s failed attempts to saddle existing troop levels with an increased workload. Hence the surge.

  20. Uwe Reinhardt says:


    “insolvency” is a very technical term with a precise meaning in terms of the balance sheet of an economic entity, such as a business firm.

    It is not a very useful term if applied to a health care system, because such a system is not a well defined entity with assets and liabilities.

    Some people try to make Medicare such an entity, showing as an asset the present (discounted) value of all future revenues projected now to flow into Medicare UNDER CURRENT LAW, and showing as a liability the present value of all currently projected payments to be made by Medicare, again UNDER CUREENT LAW. As someone who has just served on an actuarial advisory panel for Medicare, let me assure you that these projections are just highly uncertain guesstimates.

    Within this highly artificial construct, one could speak of insolvency if the present value of projected revenues (assets) fall short of the present value of projected outlays (liabilities). But this is true only UNDER CURRENT LAW. Congress can change the law. It can increase the asset side simply by voting for added revenues going into Medicare. It can change the liability side by altering future benefits, as the Ryan budget sought to do. In other words, Medicare is insolvent only UNDER CURRENT LAW.

    Could the macro economy of the future absorb increased diversion of tax revenue into Medicare? Do the math. Asssume real GDP per capita grows at 1.5 percent or so over the next 40 years. Calculate real GDP per capita by, say,2050. You will find that it is much larger than today’s. You will also find that even if you lopped off that real GDP the higher fraction of GDp that Medicare is projected to absorb by 2050 according to the actuaries, the real NON-Medicare GDP per capita left over for the folks living in 2050 is still a lot larger than is the non-Medicare GDP we have today. To me such figures do not suggest the inevitability of “insolvency” of Medicare.

    If Medicare is insolvent, it is because we will it to be insolvent. It is a political decision, not one dictated by economic constraints.

    If you e-mail me, I will send you slides from a talk I gave on it a while ago. I will not share them with John Goodman, because I do not want him to become reasonable. Something would be lost from my life if that happened.

  21. Uwe Reinhardt says:


    By the way, I take it you were with the Marines who took Sadr City. Our son was there, too.

    Now you explain why the Pentagon hired subcontractors. fair enough. But you did not say that the government-run and operated entity, a Marine platoon — the military analogue of “socialized medicine” — was naturally inferior to a private, for-profit combat platoon owned and operated by,say, Haliburton. Our son, at any rate, would not agree. He was not all that impressed by the subcontractors.

    An earlier comment on this post alleged that private, for profit entities are naturally superior to any government owned analogue.


  22. Kyle says:

    Dr. Reinhardt, I would very much appreciate those slides. I’ll send an e-mail to your Princeton address.

    That same Princeton site also provided this definition for insolvent: unable to meet or discharge financial obligations.

    The SSA Trustfunds are all discussed in terms of solvency. In fact on the SSA website, they released “Proposals Addressing Trust Fund Solvency” several months ago. As a taxpayer it would be disconcerting to hear that close to 36% of our budget expenditure is considered too convoluted to project.

    I do agree however, that legislative dynamics play a large role. In fact, Geithner’s summary of annual reports says as much. **It also admits that projections are assuming full savings under the ACA, which (again he admits) are unlikely to be realized.**

    Where does the SSA receive it’s economic forecast data? I understand it is difficult to work with anything other than current law, yet the CBO was able to produce an alternative report based on projected legislative changes. I do completely agree that this is all subject to political will.

    The metaphor was an extension of the government not having the foresight to address doctor shortages and then simply throwing money at it. Most of those subcontractors had comparable experience and received 400% of my salary. They were also arrogant and undisciplined. I agree with your son. However, in some ways they are superior, but only because they didn’t share our structural encumbrance. This gov. policy was also responsible for a lot of soldier/contractor mobility. Why stay a doctor under Medicare/Medicaid wages when I could take my expertise and move to concierge?

    I would have to ask Dr. Steve, but I took it as a reference to efficiency. In which case, I have to stand by my analysis.

    Would be more than happy to send the links to support these claims.. but to put them all in now would flag my post for moderation.

    I Look forward to your response, the discourse has made my research much easier.

  23. Uwe Reinhardt says:


    Being unable to meet one’s financial obligations (presumably because one is too poor) is one thing.

    But that was just my point. As a country, from a macro-economic perspective, we are not and will not be too poor to meet our financial obligations, even if we did not trim SSA benefits or make Medicare (and all US health care for that matter) more efficient and, thus, cheaper. It is just that we do not want to meet our financial obligations — i.e., raise taxes — and that could loosely be called “insolvency,” although I think it is not a good term to use here. Remember that we are the least taxed nation in the OECD still (Mexico and Korea excepted).

    Whence does the SSA get its forecast data? Mainly from the Office of the Actuary (OACT) of the DHHS. By law, they must make 75-year projections under current law, which is actually a daunting task. I have been involved in it as an advisor in the past year. Usually the SSA report also does discuss alternative scenarios, other than current law.

    Note that most businesses project revenues and expenses at most for 5 years. When companies are sold and bought, they are priced on 5 year data with some assumption of a terminal value then.

    No private firm would have the guts to look ahead even a decade, let alone 75 years. The CFOs and actuaries of business would faint if they were asked to make 75 year forecasts. Yet Congress and citizens expect government actuaries to do just that.

    You should see how much thought and worry actually goes into these forecasts, to make sure they are at least not “unreasonable.”

    But, as I was joking during our sessions, it is not even clear whether past 2060 we should count in US$ or Chinese Yuan. What do you think?



  24. Bob Hertz says:

    I vote with Dr Reinhardt.

    Medicare today spends approximately $550 billion on 45 million enrollees.

    In 10 years, knowing that baby boomers will retire and that some current seniors will die, and assuming that the Medicare entry age remains 65, then in 2022 Medicare will have about 65-70 million enrollees.
    (use the higher number because of the disabled who get on after two years of disability checks.)

    If the cost of Medicare goes to $15,000 a person, which is conservative, then the total Medicare expense in 2022 will be $1.05 trillion.

    The USA can afford that through higher taxes or cutting defense spending, or both. We are in no sense insolvent on a 10 year basis.

    Things do get pretty scary on a fiscal basis when you look 20-30 years out. We should pay attention to that.

    But the current Medicare benefit package is not part of the Ten Commandments.

    I could envision us bringing Part B of Medicare to an end at some point. We could give each senior a voucher for $1500 and let them find their own doctor, paying any difference just like in the food stamp program. If a doctor is charging more than $1500 a year, there might be some price gouging going on.

  25. Kyle says:

    I think it’s finally sinking in. Political currents make forecasting extremely difficult. Assets and liabilities aren’t clearly defined, legislation is dynamic, but there are a few parts of it that I’m not quite sure I understand.

    What kind of effect does our real unemployment rate have on even the short run trust fund projections? It’s several percent higher than the outer limit of 6.5%.

    Hah. It’s not fair for you two to claim the benefit of positive legislative change, and leave me holding the bag! There’s nothing to suggest that politicians will, in the near future, make any sort of progress. Certain parts of our health care system, for example HI, has not been financially adequate since 2003. Premiums and General Revenue income are expected to match costs over the short run, but if I remember correctly.. this was the first year expenditures topped trust fund interest generation. Isn’t that rule one in rich people math, never dip into your principle? Not to mention the loss from the payroll tax exemption was reimbursed by the Treasury’s general fund. I understand deficit spending in a recession but.. In the real world, doesn’t that kind of accounting get you thrown in jail?

    I was also curious about the U.S. tax burden against OECD averages. Are you talking in context of revenue generation for healthcare, or in general?

    So I read that in 2013, under current law and the sustainable growth rate, physician payments under medicare could be reduced by 31%, and within 20 years medicare could reduce payment averages from 80% (compared with private insurers) to less than 40%. Yet the forecast models don’t take this or the ancillary effects of it into account, because they feel it’s unlikely that lawmakers will let it happen. As an actuary, are these assumptions reliable?

  26. Bob Hertz says:

    Based on the recent history of Greece and California, politicians will always try to borrow money rather than enact serious reforms. They will keep borrowing until they default, and even then they will try to keep borrowing. Kind of like the guy in Las Vegas who will pawn or borrow anything to get back into the action.

    I believe there is a subset of poiltical science called ‘public choice’ which covers this deep flaw of democracy. I do not know the names of the key writers.

    However, Kyle, your last paragraph on declining Medicare payments is something I can comment on. Why should we stick with this fee schedule and ride it into the ground — as opposed to the voucher system that I think could replace Medicare Part B.

    Our food stamp program does not damage the grocery store business in any way.
    No government agency tries to dictate prices and regulate supply. With food stamps, people who have no money can come in and participate, to the best of their ability. Meanwhile the American grocery store is actually one of the wonders of the world, and I am serious.

    Paul Ryan is half right about Medicare — we do need to have defined contributions so that Medicare has a hard budget. (Ryan is then half wrong because his voucher is for buying insurance. I prefer a voucher for paying the doctor!)

  27. John Goodman says:

    Uwe: Some Medicare Advantage plans do pay primary care doctors more. IntegraNet pays them three times the Medicare rate. In return it asks for integrated care, however.

    The unfunded liability in Medicare is $43 trillion, per the last Trustees’ report. If you don’t believe the Obama Care cuts in Medicare spending will ever take place, the unfunded liability is $86 trillion.

    Are we broke? Of course we’re broke. Some people just have to wait for the checks to bounce before they believe it, however.

  28. Uwe Reinhardt says:

    Yes, John, if we never raise contributions to the Medicare program and do not control spending better, there is a shortfall of the present value of projected revenues from the present value of projected spending. We all know that.

    If we arbitrarily limited tax contributions to, say, the Defense Department, to, say 3%, we would find that the DoD is broke, too.

    If you read my comment again, you will not that this was exactly my point.

    But nothing in the Old and New Testament dictates that tax revenues as a percent of GDP need to be frozen. I haven’t read the Book of Mormons (yet), but I bet you that you won’t find it in there either.

  29. Linda Gorman says:

    Professor Reinhardt,

    John contends that ObamaCare expands the demand for services without changing the supply of services. When prices are not allowed the adjust, this creates shortages, and those shortages may leave those most in need of help in worse circumstances than they were before ObamaCare.

    You asked what my point was. My point is that a prediction that shortages will develop should be uncontroversial as a matter of basic economics. I’m sure you know this perfectly well.

    Price theory predicts shortages, and we’ve seen them in virtually every European country with government run care and in every US system of government run care, including Massachusetts. The only way that John’s post would be controversial is if one were to argue that the quantity demanded will not increase when someone is given free coverage, that ObamaCare improves supply conditions, or that ObamaCare’s system of administered prices will allow prices to adjust in response to market conditions.

    Rather than simply admitting that yes, shortages may indeed be a problem, and perhaps celebrating them as a feature of ObamaCare rather than as a bug (as one of the NHS defenders did by saying that waiting gave people time for repose and reflection), you wrote that “it would be interesting to ask people without health insurance or those with very shallow insurance how convinced they are by John’s argument.”

    This has nothing whatsoever to do with the discussion at hand, but stands as a fine example of the standard, and increasingly tiresome, tactic of trying to shift attention by clouding analysis with emotion.

    In the same comment you wrote that “there was a good study on additional Medicaid enrollment in Oregon (NEJM) that speaks to the issue,” opined that “you guys are just not convincing,” and admonished those of us who find John’s argument compelling to “Try harder, with better arguments.”

    When I pointed out that the Oregon study showed a utilization increase of about 25 percent with no change in emergency room use and “no detectable change in mortality after a year, “ you posted a comment with a long quote from the study that basically said that a) the study didn’t show that physicial health had improved after a year, b) people used a whole lot more health care, and c) the Medicaid expansion may have reduced financial strain.

    In essence, your excerpt supported John’s claim that utilization would increase.

    In a subsequent comment directed to me you noted that “Also, a psychiatrist probably would tell you that a greater sense of financial security can contribute noticeable to reported well being, including mental health and stress…So I am not sure what point you are trying to make.”

    A sense of financial security? Is the government so out of things on which to spend its borrowed money that expanded Medicaid is a necessity because there’s a possibility that it has a placebo effect?

    What about the sense of financial security, mental stability, and lack of stress that are lost by the people who have to work to pay for it? And by the people that you are so willing to extract additional revenues from when you say that there is plenty of room to raise taxes. Their health may be harmed when you simply expropriate ever larger hunks of their income for your purposes. Does their health not matter to you?

    As for the lame attempt to marginalize my views by making the silly assertion that I view the US government as Darth Vader’s fifth column on Earth, my response to your question of “why haven’t private health insurers paid primary care physicians better relative to specialists? Are they also of Darth Vader insurgents?” would be to look at the falling need for primary care docs and the expanded supply of primary care substitutes.

    I’d also point out that while specialists can often perform the duties of primary care physicians, the reverse is not necessarily true. And the US does not have accurate pricing in health care outside of the cash markets, so perhaps the prices are simply wrong. However, it is also possible that higher specialist pay reflects market conditions, sad as that may make the American Academy of Family Physicians and its fellow special-interest seekers.

    Regrettably, a discussion of primary versus specialists care pricing is off topic for this thread. With respect to the topic at hand, am I interpreting your position correctly when I assert that you are saying that as a matter of economics you do not believe that shortages be a problem under ObamaCare?

  30. Dr. Mike says:

    I know of several PCPs who are planning on leaving primary care, depending on the results of the upcoming election. Yes, it is an emotion-driven decision that is not based on reality (no one can know for sure what the health care landscape will look like in the 7th year of an Obama presidency). None the less, I believe that there are enough physicians contemplating moving up their retirement plans to at least make a temporary impact on the availability of physician services.
    If as a 50-ish year old family doc I were interested in staying in primary care (which I am not) I could see some attraction in the idea of running a “prevention practice” focusing on physicals and managing preventative screenings. Much of the work can be done by staff (the medicare wellness visit doesn’t require anything close to physician level competence), and if one did a lot of these, and simply referred all the acute stuff to the local urgent care or ER, I could imagine a tidy profit. But herein lies the fallacy in most pundits reasoning regarding the primary care crisis – it is not about money. Paying more certainly would be one way to increase slightly the number of primary care physicians, but what you would see is that most PCPs would scale back just enough so that practicing medicine might became tolerable again, and their income would be about the same as it is now, and the shortage would not improve. What it’s really about is why people go into medicine in the first place. Primary care within the current system (and in PPACA) simply is not enjoyable and does not fulfill the idealistic vision almost every medical student has.

  31. Bob Hertz says:

    Where Linda Gorman is correct is here:

    The ACA legislation was influenced by years of assertions that free preventive care would make our health system not only better but even cheaper.

    This belief was fueled by some grotesque situations where
    diabetic patients could not afford $50 of insulin and then went into a $20,000 coma and amputation. These were real tragedies, but there was too much extrapolation.

    American liberals do have a pattern of asserting that health care should be a right, but not thinking through just who will provide that right.

    The EMTALA law of 1996 was a classic example. Giving a right to receive emergency care (at least stabilization) is very progressive. I favor it myself.

    But not one nickel in new taxes was assessed to pay the hospitals who had to provide this right.

    The hospitals were supposed to handle the extra cost by cost shifting and by tapping their own profit pools and reserves. In other words, the health care system has lots of extra money sloshing around, you go find it.

    Which has actually worked to some degree, but it is not honest social policy and we are hitting limits in this area. I agree with Linda and Dr Goodman on this area.
    They are wrong about Medicare but they are right about shortages.

  32. Al says:

    Uwe: “That’s be $500 for the lecture you missed as an undergraduate.”

    Dr. Steve: “I’ll keep my 500 dollars.”

    Dr. Steve demonstrates how free choice and free markets save a lot of money that would otherwise have gone to wasted services. [Note: This is not meant to demean those services. It merely states that those services (whether good or bad) are better allocated through the free market.]

  33. Uwe Reinhardt says:


    I agree that free choice and free markets, which basically would ration health care by price and ability to pay, would eliminate the delivery of a lot of health-care services (to those who could not afford them). This, after all, how free markets allocate scarce resources. You can find it in every good freshman economics text.

    Fortunately, it would not eliminate delivery of the services I, or John or probably you now get. Because we are willing and, more importantly, able to pay as much or more for them than we would be charged for them in a free market, evidently these services would not be wasted. By contrast, putting a stent into an unemployed 55 year old probably is a waste. I get it.

    So, we agree.


  34. Uwe Reinhardt says:

    Bob Hertz:

    The EMTALA was passed in 1986, not 1996. Alas, I forgot who was President at that time and signed the on to the law.

    Must have been a Democrat, I reckon. Republicans don’t pass unfounded mandates or grant unfunded entitlements.


  35. Al says:

    Uwe, I am surprised by your freshman textbook analysis that makes you believe we agree. We Don’t. Providing insurance without the ability to provide healthcare simply lets that 55 year old unemployed person die on line rather than obtain the needed care. I suggest you read further than that freshman textbook of the 1900’s and move onto systems that have provided the world with wealth and upward mobility. That system seems to have provided very well for both you and me along with those that choose to use their given energies to lift themselves out of misery.

    Choice and markets provide the lowest costs and the best services in the long term which is where sustainability is the problem. I don’t think anyone that has posted recently desires to leave those unfortunates to die in the streets. We are a very charitable nation and most are even willing to be charitable with their tax dollars if those tax dollars are targeted directly to those with *true* need. The only way that can succeed is to intervene with the least possible interference into the market place.

    You want to intervene with a sledgehammer.

  36. Bob Hertz says:

    The social decision to preserve life or not is, I think, more subtle than the last few posts have implied.

    What I am trying to say is that there are gradations in how much medicine is provided to individuals in crisis.

    The Canadian system appears to have no trouble giving quick, efficient care for broken arms and legs.

    But when a famous skier, I forgot her name, recently had serious brain injuries, she had to be flown to Colorado for a chance at survival.

    There was a severely premature baby that had to be sent to America from Canada also.

    I myself had a heart attack at age 60. I was in surgery for a stent in about 40 minutes in St Paul MN. Any longer and I could have died.

    America spends a ton of money and then some having well-equipped hospitals about every 100 miles in most states. It saves lives, maybe 250,000 a year.

    If America has to save money and we get 250,000 more deaths, that does not make us a cruel and heartless nation. I would rather that we judge health care by historical standards. A nation where most 55 year olds get treatment for heart attacks is at the very top of medical history. We beat ourselves up too much if we find that not ALL 55 year olds survive.

  37. Uwe Reinhardt says:

    To Ms. Gorman:

    My oh my! I must have struck a nerve in you with my commentary.

    One does not have to deny the tenets of basic freshman economics to argue, as I do, that the ACA’s impact on the alleged doctor shortage is only marginal and not a major issue. The delivery systems of other countries — Canada or Taiwan, for example — have readily absorbed much larger influxes of newly insured citizens in the wake of health reform. The physician population ratio in this country now varies by a factor of 2 across the U.S. Somehow systems make do with varying ratios of physicians to population.

    We constantly hear how inefficient our health-care system is and how, because of third party payment, it engenders waste by delivering huge numbers of unneeded services. A commentator on this very post just made that point. It is not unreasonable to assume that some of this waste will be squeezed out as the newly insured enter the health system. If doctors can do useful stuff for newly insured and hitherto underserved patients, perhaps they will be moved to cut out some of the useless stuff health insurance led them to deliver to the already insured.

    Aside from President Nixon’s temporary price controls on health care, the first serious and permanent system of price controls in Medicare was the DRG system introduced by the Reagan administration in 1883. It has been called Soviet pricing, which is fair enough, as it is centralized administered pricing. Yet I do not recall the emergence of a shortage of hospitals capacity at the time. On the contrary, it kept expanding apace, until occupancy ratios were around 50% by the mid 1990s.

    The next price controls in US health care were introduced in 1992 by the administration of George H.W. Bush, who insisted that they were to be accompanied by an overall budget cap on Medicare physician payments called the “Volume Performance Standards.” It was later morphed into the notorious SRG system introduced into law, in 1997, by the House Ways and Means Committee then under California Representative Bill Thomas. No one then screamed of a physician shortage either. On the contrary, the Council on graduate Medical Education, the AAMC and others were lamenting a physician surplus.

    Now, mind you, if for ideological or purely partisan reasons I had to lob more bullets at the ACA, I would make a big deal of an alleged physician shortage triggered by the ACA as well. As I said in an earlier comment, on this or another post, I would even throw in global warming, with all those newly insured folks driving all over the place to get free proctologies, angioplasties, stents and stuff, driving up oil prices in the process, which in turn feeds more money into the hands of our enemies, and which also drives up corn prices (via ethanol) and thus food prices, leading to starvation all around. You see how that works? I would place concern over the physician shortage caused by the ACA in roughly this class of lament.

    Finally, you declare that wanting to ask the now uninsured how convinced they are by John’s argument – or, to put it another way, whether they would rather remain uninsured or be insured but possibly have to wait for an appointment with a doctor – is a tactic trying to shift attention by clouding the issue with emotion. Not emotion – it is just a choice situation. After all John and you simply use economic theory to make presumably unemotional assessments on their behalf.

  38. Al says:

    Uwe writes: “We constantly hear how inefficient our health-care system is and how, because of third party payment, it engenders waste by delivering huge numbers of unneeded services.” … “It is not unreasonable to assume that some of this waste will be squeezed out as the newly insured enter the health system.”

    That is where the theoretician requires hands on experience. It is just as likely or more likely that there will be more “waste” not less and we all know what happens when you ass-u-me. It is likely much easier and less risky to go through the motions of providing healthcare when one deals with the less important problems. One doesn’t get as many calls at night. One doesn’t get sued. One doesn’t have to research. One doesn’t have to stretch their brains. In fact one can text message while practicing medicine at the same time.


  39. Uwe Reinhardt says:


    I am not a physician. Perhaps you are one. If you are, it is fascinating to learn about the medical ethic that drives doctors’ work habits: they would rather give unnecessary care to an already insured person than meet the genuine need for care of a newly insured person.

    Is this, then, how American doctors behave?

    Learning new stuff every day.



  40. Al says:

    Uwe writes: “they would rather give unnecessary care”

    Most definitely you are not a physician. What you call unnecessary is unnecessary to you until you go whining to a physician about some unimportant complaint as if it is a life and death issue. It involves your life so there is nothing more important. It is not the physician’s duty to cure the world. He deals with whomever enters his doors with whatever problems they enter with. It is the meddling of others that pushes so many of the worried well amongst the sick. It is the meddling of others that prevents medicine from developing new methods of managing patients more effectively. So far it appears that almost all the experts have to offer is one program after another where there is little more than a name change to a previously failed program. I am sure name changes have advanced the careers and job opportunities of many of the elite while doing great harm to the nation.

    Best. Keep learning and one day you will get it right.


  41. Uwe Reinhardt says:


    I guess you are right with all those squeamish people running to the doctor instead of toughing it out.

    Well, to cheer you up, Al, I send you the link to the story of a New Jersey woman who behaved more along the lines you would prefer. here’s the link:



  42. Al says:

    Uwe, Thanks for the article. I didn’t notice your name in the paper volunteering to pay for her care. I also note that she didn’t bother to spend her own money for a simple office visit to find out her options. I do note the large amounts of uncompensated charity care that individual physicians offer without any government assistance. This is done by individual practicing physicians, even ones that do not generate the high fees and wonderful meals from speaking engagements.

    I hesitate to criticize, but calling people squeamish and encouraging them to tough it out is the wrong thing to do. Maybe these people should see their physician or simply call him or email him to find out what to do. But, I forget, the wisdom from the elite institutions doesn’t allow for Medicare patients to pay physicians for these types of verbal interventions as they are considered part of the office visit and thus the patient is forbidden from paying the physician even if they do so voluntarily and Medicare is uninvolved.



  43. Carson Fuller says:

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