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121 IRET Byline 1 (1993)

handle is hein.taxfoundation/iretbyln0121 and id is 1 raw text is: March 21, 1994 No. 121 Designer Medicine Men The Clintons' health care task force blames part of the rising cost of health care on the emergence of too many medical specialists. The Clinton proposal would decree that no more than 45% of medical school graduates would be allowed to go on to become specialists. The rest would be forced to become general practitioners. Furthermore, the limited slots for specialty training would be distributed by region and allocated by ethnic and gender quotas. The specialist provision is both ... all saving bizarre medicine and bizarre capital forn economics. How can something tivity, and n cost too much and be in glut? regardless Normally, over-supply is behindlit. associated with depressed prices. behind it. For example, a bumper harvest of economic r wheat results in lower wheat government prices, a bane to the farmer but a against or boon to consumers. type of savi On the other hand, an increase in demand for an item raises prices. If a fad sweeps the nation, the price of the adored item zooms, or shortages develop. Witness the not-available-at-any-price-the-week-before- Christmas phenomenon of the cabbage patch dolls of a few years ago. When customers demand more of a product or service, they bid up the price, signalling producers to supply more. Enormous advances in medical co ,ati 7tio of eas to isc ig. IRET UBLine Institute for Research on the Economics of Taxation technology have made better treatments possible. The public is eager to buy those treatments. But specialists have to be trained to deliver the new techniques. The higher earnings of those so trained encourages more students to enter those fields. Thus the consumers (patients) have called forth a greater supply of the specialists. This is the only explanation consistent with higher prices and higher production -- a demand-driven expansion of the industry. The Clintons seem to think, instead, that the specialists invented themselves, and somehow force patients to come to them and pay higher prices. The idea that there are simultaneously too many specialists and that they are nonetheless able to charge too much flies in the face of every known economic law. The Clinton proposal attacks symptoms without any regard to or understanding of their cause. To reduce health care spending, the Clintons' program tries to slow patients' access to advanced, high tech, and more costly medicine. If doctors are not ntributes to trained in such medicine, they on, produc- won't prescribe it, and that will nal income, hold down the cost. But surely the motive that can't help the patient. Keeping physicians in the dark can here is no hardly shed light on a patient's 'on for the condition. liscriminate ourage any The benefits of seeing a specialist are pointed out forcefully in a recent article by Malcolm Gladwell1. He points out that, when someone has a back pain, the cause may most often be simple muscle strain, but the same symptoms could be due to a crushed disc or even to various cancers or an abdominal aneurysm. The latter three causes are less common, but obviously more urgent to diagnose and treat correctly, with the latter two causes requiring the services of radiologists, oncologists, or vascular surgeons. A back specialist may be familiar with the subtle differences in symptoms that might distinguish IRET is a non-profit, tax exempt 501(c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote economic growth and efficient operation of the free market economy. 1331 Pennsylvania Ave., N.W., Suite 515, Washington, D.C. 20004 Phone: (202) 347-9570

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