Are Doctors’ Overpaid?: introducing the idea of a cartel


In celebration of the Match Day, which is a day that fourth-year medical students find out where they get matched to the residency program, for some of my friends in medical schools, i came across an article from NPR’s Planet Money about the general overpaid issue for physicians in America and the possible reasons behind this problem.

According to Health Affairs, American doctors, who make an average salary of almost $300,000, are paid around twice as much as doctors in other wealthy countries, and this made me kept wondering why physicians are such a high paying job in the United States only? Is because the competition for people to get through medical school is so high that there are not many people left to continue pursuing medicine in the pool? Or is it because there are rules that restrict the number of people who can get residencies?

What is a cartel and how it might affect the healthcare system?
After investing this issue of overpaying in physicians, I found that there, indeed, are rules that restrict the number of people who can get residencies. Some experts call these rules the work of "a cartel.” In economics, “a cartel limits the supply of something to increase the amount of money they can charge.” I think in this case of overpaying in such selective occupation is understandably common. In an economic sense, some possible adverse effects on patients who are consumers, in this case, include putting more pressure on the national healthcare system. This is because healthcare is a necessity for people’s lives and the demand for healthcare is inelastic. So if the majority of physicians decides to raise the visits fee or other medical charges together, this action would definitely place a financial burden on healthcare as well as the medical insurance companies. Besides, the system of how physicians get paid is lack of transparency, in my opinion, because, for example, when you receive the bill from the hospital, you could not tell how does that massive amount of money break down?

In this nation, there is always a demand from patients to seek for doctors, so that this, again, creates the inelastic demand but limited supplies in comparison to the supply. For example, for some underserved areas, it is difficult for patients to visit doctors. So what if the medical education in the United States does not weed out most students who are interested in medicine, in this way, there will be more availability of doctors in the United States to cover those underserved areas and maintain the medical balance throughout the United States. Could we change this medical imbalance issue by training more physicians in the medical field and thus increase the supply of the availability of physicians?

Above all, do you think we should lower the wages for doctors in the United States and ultimately increase the number of physicians? Comment below and tell us what you think.

Sources:
https://www.npr.org/sections/money/2019/03/12/702500408/are-doctors-overpaid
https://www.economicsonline.co.uk/Business_economics/Cartels.html

Image:
http://siteimages.textbooks.com/uploads/2017/02/Match-Day-Advice-Medical-Residency-Match-Textbookscom-Blog.jpg

Comments

  1. AnonymousMarch 20, 2019 at 11:48 AM

    I think that there are obvious positives and negatives to lowering income of doctors and having more physicians. On one side, it would be beneficial to have more physicians so that more people have access to doctors, on the negative side though, this would mean a lower income for all of them which might have less people become physicians and also it might become easier to become a doctor. This could be negative because we want to be sure our doctors are properly trained and prepared.

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