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Old 07-31-2012, 12:27 AM   #21
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The Medical Cartel: Why are MD Salaries So High?

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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 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.
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Old 07-31-2012, 12:27 AM   #22
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Originally Posted by Joe Perez View Post
Now, the Fed says I can’t pocket any more than 20% of premiums. Well, I sure don’t want to take a $100,000 hit in my profits (that's a lot of Pepto-Bismol), but what choice do I have?

Well, for starters, I can increase my premiums! I desire $300,000 in profits, which means I have to spend at least $1,200,000 in payments, which means that my total revenue needs to increase to $1,500,000. That’s a 50% increase! Sure, I’ll be paying out a lot more, but who cares? I’ll just massively increase my reimbursement rate. The hospitals will get richer, and I’ll stay rich. Everybody wins.

Well, everyone except for the customers. But who cares about them?

Obviously I won’t be able to do it all at once (the Fed says I can’t hike rates more than 10% at a time) buy you better believe I’ll get back to my desired bottom line, and with a little extra for my trouble and legal costs.
This is impossible. The Free Market would prevent such an action from ever happening, and if an insurance company kept raising their rates, they would go out of business fast!

The only obvious way for an insurance company to do what you claim is to get more customers on board, which means their insurance will obviously be cheaper, which obviously means their rates will be lowered because of free market principles.

After all, there is no way competing insurance companies could possibly raise their rates to increase profits when other insurance companies are competing against them, otherwise, they would go out of business because the other insurance companies would steal all of the rate-raising insurance companies business.

It's all about the free market, and free market principles. What you claim is obviously impossible due to them, there's no way that could happen! No way!

Plus, because of the free market, the AMA has to be left unfettered! There's no way we could let the federal government in to regulate the AMA. It's a corporation, and the federal government has no right to interfere with it. None! The free market will regulate the AMA, but we have to leave the markets to be free! We cannot let the government regulate the AMA!
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Old 07-31-2012, 12:40 AM   #23
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Jason, I agree with you 100%. The AMA is absolutely a cartel, which artificially depresses the supply of healthcare professionals in order to fix pricing. (Well, they don't do this directly- they use their lobbying power to influence the state medical boards to do so on their behalf. You are attributing more authority to the AMA than they actually have.)

But since they're a private corporation in a free market, this is a good thing! It has to be, since it's the natural outcome of unregulated commerce. (I'm essentially quoting you verbatim here, distilling down about a hundred posts into two sentences.)

And, of course, they are not a monopoly. If you wish to do so, you yourself are free to start a Medical Association and go into competition with the AMA. I encourage you to do so, and report back to us on your progress. It'll be great! Without the burden of state licensing examinations, incompetent and barely literate graduates of the Hollywood Upstairs Medical College will finally be able to compete in the marketplace!



Thanks, Dr. Nick!
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Old 07-31-2012, 01:14 AM   #24
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If anyone here were to start a brake job shop, no problem.
Gov't doesn't protect brake shops. There is no gov't protected licensure process for car shops. There are no guild-specific barriers to entry.

If anyone here were to try to practice medicine without a license, one would get arrested very quickly.

The AMA exercises its control mainly over the medical schools and the board certification process.

If anyone were to try to compete with the AMA, they would find that the AMA would lean on the government to block competition.

Chiropractic, despite being well funded and organized, had to fight the AMA over decades to get where they are now. (Personally, I believe that Chiropractic has its place, and I don't believe in their cure-all claims).

If the government weren't protective of the AMA, there would be alternate pressures for the quality of doctors. For example, it would be in the interest of the malpractice insurance industry to try and figure out which doctor certification associations tend to hurt their patients and which don't. It would be in the interests of the health insurance companies to do the same.

In the world of scuba certification, for example, there are several competing agencies. Over time and due to competition, the ones that have been around for a while ended up having very good reputations. I have met no "barely literate" instructors.

The main misconception is in the absence of gov't regulation, there will be no market forces that will increase quality and reduce costs.
When in fact in most industries people accept the above to be true, such as in electronics or in the automotive industry. B..b..b..but, somehow, not in health care or in the financial industry.

Oh and Blaen99, I'm sorry your ***** is so small that you can't have a discussion without being a pompous ***.
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Old 07-31-2012, 04:03 PM   #25
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Originally Posted by Joe Perez View Post
While the AMA certainly wields political influence, this is by virtue of their strong lobbying organization, not by fiat.
(...)
Furthermore, the education and licensing of physicians in the US is (...) vested entirely within the medical boards of the individual STATES,
(...)
Further-furthermore, the AMA has a long history of running at odds with the federal government.
(...)
In short, stop blaming the government for everything (...) The Fed is no more responsible for the AMA than for the Screen Actors Guild or the Writer's Guild of America.



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If the government weren't protective of the AMA(...)
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Old 07-31-2012, 08:11 PM   #26
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You agree the AMA is a cartel/guild.
My point is that said cartel functions only because it is protected by gov't.
And I pointed out, what would happen if you tried to "practice medicine" without a government issued medical license? In contrast, you can practice auto repairs without a similar license. Any cartel of repairmen can try and do things to prevent non-certified mechanics from working, but without the force of law defending the cartel it cannot stand.

Here's yet another article:
The Evil-Mongering Of The American Medical Association - Forbes.com
The Evil-Mongering Of The American Medical Association

Quote:
According to a 2007 study by McKinsey&Company, physician compensation bumps up health care spending in America by $58 billion annually,on average, because U.S. doctors make twice as much as their OECD peers. And even the poorest in specializations like radiology and surgery routinely rake in around $400,000 annually.

But how has the AMA managed to get away with such princely remuneration that ordinary mortals in other professions--even ones such as law and engineering that also require arduous training--can only dream of? After all, in a functioning market, a profession offering such handsome returns would become a magnet for more people who, over time, would bid down "excess" wages.

But that's not how it has worked in medicine since 1910 when the Flexner report, commissioned by the AMA, declared that a surplus of substandard medical schools in the country were producing a surplus of substandard doctors. The AMA convinced lawmakers to shut down "deficient" medical schools, drastically paring back the supply of doctors almost 30% over 30 years. No new medical schools have been allowed to open since the 1980s.

Still, the AMA along with other industry organizations until recently had issued dire warnings of an impending physician "glut" (whatever that means beyond depressing member wages), even convincing Congress to limit the number of residencies it funds to about 100,000 a year. This imposes a de facto cap on new doctors every year given that without completing their residencies from accredited medical schools, physicians cannot obtain a license to legally practice medicine in the U.S. Even foreign doctors with years of experience in their home countries have to redo their residencies--along with taking a slew of exams--before they are allowed to practice here.

The upshot of all this is that now the country is facing an acute shortage of doctors that even the AMA and its sister organizations cannot deny anymore.

One way to relieve the shortage of providers that the medical industry has created would be for the AMA to abandon its aggressive game of turf-protection and allow nurses, midwives, physician assistants and practitioners of alternative therapies such as chiropractors, to offer standard treatments for routine illnesses without physician supervision. For instance, midwifery, once a robust industry in this country, has been virtually destroyed, thanks to the intense lobbying against it by the medical industry. In 1995, 36 states restricted or outright banned midwifery, even though studies have found that it delivers equally safe care at far lower prices than standard hospital births.

Similarly, the AMA long regarded chiropractory as tantamount to "quackery," and barred doctors from professionally associating with chiropractors or making referrals to them, something that the courts overturned as an illegal violation of antitrust laws in 1987. But the AMA is undeterred. Three years ago it launched something called the "Scope of Practice Partnership," a self-appointed watch-dog group, whose express purpose is to ensure that chiropractors don't offer any services that might be remotely considered outside their legal scope.

The AMA does all this in the name of patient protection.
Society is a bunch of people on an island.
Government is a guy with a gun, given one by the people with the belief that he will "do the right thing" and protect us.
Instead some people BRIBE the guy with the gun to come up with RULES (favorable to them) backed by said gun.

You can't change the dynamic by stopping the lobbying. That's like saying nobody can meet with lawmakers. You can only change the dynamic by barring the gov't from anything beyond the protection of individual rights. Which means, the gov't should be barred from writing economic intervenionist laws, in a similar manner as "Congress shall make no law abridging..."
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Old 07-31-2012, 08:18 PM   #27
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If you look at the history of regulation, it did NOT come about because some high-minded people wanted to protect the public. That is a MYTH.
It was brought about by big business themselves because they wanted to be protected from small competitors!

Here's a HuffPo article (which is considered a leftie source):
Anthony Gregory: Then, Who DID Build It, Mr. President?

Then, Who DID Build It, Mr. President?

The writer quotes Gabriel Kolko, a "new left" historian
Quote:
Gabriel Kolko wrote in his highly influential book on the Progressive era, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916:
Despite the large number of mergers, and the growth in the absolute size of many corporations, the dominant tendency in the American economy at the beginning of [the 20th] century was toward growing competition. Competition was unacceptable to many key business and financial interests... Ironically, contrary to the consensus of many historians, it was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it.
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Old 07-31-2012, 09:19 PM   #28
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Before I actually put time into refuting, well, every god damn retarded thing you just said Jason, there's one thing you must explain.

How can something that only comprises 15% to 27% of the market, depending on what segment of the market you look at, be a monopoly? How can something with many healthy and active competitors, that only comprises a minority of the market, be a monopoly, and have monopolistic power? How can something *that does not even have ------- mandated membership and is completely voluntary* be a monopoly and/or have monopolistic power?

You keep trying to allege that the AMA is a monopoly, and has monopolistic power with a monopolistic strangehold over the medical profession - but the numbers don't back it, and you've done everything you can to say it is a monopoly, while ignoring the actual numbers and reality. Hell, you've even quoted revisionist history made largely out of whole cloth - and yet, still you have yet to post anything proving what you are claiming about the AMA. The most hilarious part? You haven't even addressed the whole issue of it being state medical boards being the one who okay doctors, not the AMA *or* the federal government, and are completely dodging that you are clamoring for federal regulation of a private corporation in an active free market with a lot of competitors and ultimately federal interference in something that is currently solely a state right.

Just because a talking head you like says something about the AMA does not make it true.
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Old 07-31-2012, 09:37 PM   #29
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Before we begin the next round, I'm going to summarize the thread to date for those who are just jumping in:

Everyone: (intelligent conversation.)

Jason: Government is evil! Corporations are inherently good!

Me: Actually, the organization you're complaining about is a private corporation.

Jason: No, I reject your reality! Look at these irrelevant links! Abolish all consumer protection!


Now, on to business:

First, I'm going to paraphrase a tad, as this has been said about a dozen different times in different words:
Quote:
Originally Posted by JasonC SBB (paraphrased) View Post
Government regulation of professional services in both un-needed and inherent harmful. In the complete absence of all regulations, business will naturally seek a high level of quality and safety.
Dude?

Seriously?

Have you *EVER* visited any Caribbean or Central American nations? They have very little in the way of professional regulation, and trust me, you have never seen lower standards of quality and safety in terms of building construction, plumbing or electrical work anywhere else in the western hemisphere. (Apologies to the couple of members we have here from the Caribbean, but you know damn well I'm right.)


Moving back into the realm of direct quotations:


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Originally Posted by JasonC SBB View Post
You agree the AMA is a cartel/guild. My point is that said cartel functions only because it is protected by gov't.
My point is that what you've said here is a completely false and unsupportable statement. I don't know why you can't understand the difference between the AMA (a private research, publishing and lobbying organization) and the 50 states of the US. They're very different things.


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Originally Posted by JasonC SBB View Post
And I pointed out, what would happen if you tried to "practice medicine" without a government issued medical license? In contrast, you can practice auto repairs without a similar license. Any cartel of repairmen can try and do things to prevent non-certified mechanics from working, but without the force of law defending the cartel it cannot stand.
Oooooh, I was so hoping you'd say something like that.

I chose a state mostly at random (Delaware, because I think its name sounds funny) and went to their state Division of Professional Regulation website. Here is a small sample of the various businesses which the state of Delaware requires that you be licensed to operate:
  • Adult Entertainment
  • Aesthetician
  • Architecture
  • Athletic Trainers
  • Barbering
  • Boxing
  • Cosmetology
  • Deadly Weapons Dealers
  • Electrician
  • Hearing Aid Dispensers
  • Landscape Architect
  • Land Surveyors
  • Manufactured Home Installation
  • Nail Technician
  • Plumbers
  • Real Estate Appraisers
  • River Pilots
Oooh, those damn greedy barbers and their government-protected cartel!
(full list here: Division of Professional Regulation)




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Society is a bunch of people on an island.
No, a bunch of people on an island is a Reality TV show. Trust me- I work in the broadcast industry, and I know a thing or two about making TV shows.


Quote:
Government is a guy with a gun, given one by the people with the belief that he will "do the right thing" and protect us.
Instead some people BRIBE the guy with the gun to come up with RULES (favorable to them) backed by said gun.
Mostly correct. Technically, one guy with a gun would be a dictator, which is only one style of government.







Quote:
The upshot of all this is that now the country is facing an acute shortage of doctors that even the AMA and its sister organizations cannot deny anymore.
And that’s where you’re wrong.

Again.

There is absolutely no shortage of doctors in the US. We consistently rank in the top 6 or so countries in the world in terms of dermatologists and cosmetic surgeons per capita. What we have a shortage of is general practitioners.

Why? Well, because of the free market, actually.

Specifically, one group of corporations (private health insurance companies) decided that they would collude to fix the wages of general physicians by publishing reimbursement schedules which cap the amount of money that a physician can collect from performing any given service, regardless of the time they spend or the costs they incur. This is the natural behavior you would expect of an insurance company operating as a for-profit corporation.

So, since we have a relatively free market, medical school graduates have increasingly chosen to align themselves with specialty practices in which they are free to charge large amounts of money for performing elective procedures, rather than providing “core” healthcare services in an environment made burdensome and unprofitable not by any government, but by a group of corporations.





Shall we next debate how the federal government is to blame for the wooden acting and incoherent plot in Star Trek V: The Final Frontier?
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Old 07-31-2012, 09:43 PM   #30
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....Delaware requires their **** stars to be licensed by the state? What? I mean...what?

What kind of test does a **** star take? "Here, let me show you all I can fit!"?!?

...The more I think, the more disturbing the tests that that particular field would take to be licensed gets.
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Old 07-31-2012, 09:48 PM   #31
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Not the individual strippers, just the people who own and operate strip clubs.
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Old 07-31-2012, 10:48 PM   #32
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Mr. Pompous Blaen: I explained that the AMA exerts its control via the medical schools, med school quotas, and via its influence on the State medical boards, not directly at the doctors.

Joe:

1) 3rd world countries are corrupt corrupt and poor NOT because of a lack of "regulation", but due to a LACK of RULE OF LAW and LACK of PROTECTION of individual and property RIGHTS. I spent MANY YEARS in a 3rd world country and one of my best friends used to work in gov't there. We have had long discussions on this and we have come to the same conclusions.

2) The definition of a free market is one with free entry of competitors and all transactions are voluntary on both sides. When there is regulation, that means a guy with a gun (gov't) has rules about what transactions can and cannot do or be. And when a few players influence the rules, you get Corporatism. It is a MYTH to think that lack of regulations is the same as lack of rule of law.

3) The health care industry is heavily regulated and is NOT MUCH OF A FREE MARKET. What the industry players do in the presence of the regulations is what remains of said free market. And of course, when there are heavy regulations, costs go up. You are blaming what remains of the free market instead of the onerous regulations that made it what it is.

Before we continue we need to agree what "regulations" are. Regulations are rules about HOW you must run or must not run your business. Protection of property rights, and enforcement of contracts, are NOT "regulations". For example, gov't going after fraud, is not "regulation". Gov't telling Honda, they must use a catalytic converter, instead of "your emissions must meet these target numbers", is not. (I'm assuming here that environmental protection laws are a necessary thing).
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Old 07-31-2012, 10:58 PM   #33
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Quote:
Originally Posted by JasonC SBB View Post
Mr. Pompous Blaen: I explained that the AMA exerts its control via the medical schools, med school quotas, and via its influence on the State medical boards, not directly at the doctors.
And I've explained why that is where your argument falls apart.

You are demanding *federal regulation* of a *private corporation*'s actions who is a *minority player* in a field with numerous healthy competitors, in an area that is currently solely a state right.

I mean, you keep insisting the same thing, and seem 100% dead set determined to try to think I haven't read it. But I have.

And the problem is, what you are insisting and it's logical conclusion is 180 degrees from the stance you normally take on this - hell, it's 180 degrees from what you say in the next few sentences in that very post! It baffles the mind. The core of your argument is "The AMA is bad!", and the extension of it is "The federal government should take regulatory action!". I mean, am I totally misunderstanding you? Are you saying the AMA is good and my head is up my ***, and instead I read you as saying the AMA is bad?

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Old 07-31-2012, 11:18 PM   #34
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Originally Posted by blaen99 View Post
I mean, am I totally misunderstanding you?
Nope, you got him right.

Apparently, private corporations are inherently good, except that they become inherently evil when they behave in the manner which you would expect them to in a genuinely free market.


I've still seen nothing posted in support of the false assertion that the government props up the AMA.
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Old 08-01-2012, 12:24 AM   #35
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Jason: Government is evil! Corporations are inherently good!
Corporations are NOT inherently good. Competition and market forces result in successful businesses that meet customer demands. If this is in the presence of a rule of law that protects individual and property rights, then these people will generally behave well. This is because of the net sum of forces and incentives, market and otherwise.

Quote:
I don't know why you can't understand the difference between the AMA (a private research, publishing and lobbying organization) and the 50 states of the US. They're very different things.
And they are IN BED together. The dynamic that makes this possible is the power of gov't to "regulate". If gov't had no power to sell economic favors, there would be no Corporatism.

Quote:
Technically, one guy with a gun would be a dictator, which is only one style of government.
In a democracy you also have ONE guy with a gun, but he was supposedly voted to do that by the people, and the rules are supposedly also voted in.

However the opposite of dictatorship is NOT democracy. Democracy is merely another authoritarian system, one in which 51% can do what they want with the other 49%. It's great for the 51% (on those issues where you are part of the 51%), but sucks for the 49%. And are we all each not part of the 49% or 1% on this issue or another?

Furthermore voting gives the people the illusion that they are getting what they want or what is good for them.

Last edited by JasonC SBB; 08-01-2012 at 12:52 AM.
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Old 08-01-2012, 12:25 AM   #36
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I've still seen nothing posted in support of the false assertion that the government props up the AMA.
You just said it, it has lobbied for favorable laws.
Such as the one that says you can't practice medicine without a state-board license.
If gov't didn't defend the AMA, then it wouldn't pass such a law.
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Old 08-01-2012, 09:56 AM   #37
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Quote:
Originally Posted by JasonC SBB View Post
Corporations are NOT inherently good.
Well, what DO you like then, aside from cake and anarchy?


Quote:
Competition and market forces result in successful businesses that meet customer demands. If this is in the presence of a rule of law that protects individual and property rights, then these people will generally behave well. This is because of the net sum of forces and incentives, market and otherwise.
Ok, so in this case, market forces resulted in the formation of several private, commercial health insurance companies. These companies competed with one another in the free market to meet customer demands (lower premiums).

They did this, in part, by creating rate schedules which say (to hospitals and doctors) "For performing X procedure, we will pay you Y amount of money, regardless of your costs incurred." So the market naturally set a level for the value of primary healthcare services.

Thus, new physicians graduating from medical school have chosen to enter specialty fields where they can charge higher rates for their services, rather than operate a general practice and deal with private insurance companies.



I still fail to see how the AMA played any role at all in any of this.



Quite to the contrary, in fact. In addition to private insurance carriers, Medicare is a huge pain in the *** for doctors in private practice, and the AMA strongly opposed the creation of medicare.


Now, if you want to argue against medicare, be my guest. See the Ronald Reagan album I posted earlier.
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Old 08-01-2012, 10:26 AM   #38
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Originally Posted by Joe Perez View Post
These [commercial health insurance] companies competed with one another in the free market to meet customer demands (lower premiums).
No, they didn't. They certainly didn't compete in a strictly free market, and they didn't even compete in a mostly free market.

You may or may not be impressed with this point, but there it is.
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Old 08-01-2012, 10:42 AM   #39
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I'll grant you that it's no longer a free market now that Obamacare is in place.

However this fundamental shift in physician demographics has been going on for at least two decades, and greatly preceded any government intervention in the pricing of healthcare services apart from medicare / medicaid. Heck, I got to listen to it at the dinner table as a kid growing up, as my father was a general practitioner and my mother an RN.


But even if I were to handwave over that and accept the premise that the government interferes with the price structure of basic healthcare services in general, it still doesn't answer for how the AMA is supposedly to blame for any so-called "Doctor shortage", as the AMA has always strongly opposed such government interference. That is the core tenet of what I wish Jason to explain to me.
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Old 08-01-2012, 11:05 AM   #40
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Quote:
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But even if I were to handwave over that and accept the premise that the government interferes with the price structure of basic healthcare services in general, it still doesn't answer for how the AMA is supposedly to blame for any so-called "Doctor shortage", as the AMA has always strongly opposed such government interference. That is the core tenet of what I wish Jason to explain to me.
I'm guessing that Jason is referring to (among other things) the AMA's 1910 Flexner Report that result in over half of the U.S.'s medical schools being closed down, and the continuing influence of the AMA in selecting members to the LCME which controls the number of medical schools and overall number of medical students. Given the much faster growth in secondary medical education and care (less directly influenced by the AMA), it's reasonable to suggest that we could see similar growth in available primary care (and as a result, lower costs) were the AMA not seeking to create and enforce artificial barriers to entry.

And while it's easy to make cracks about unregulated third-world medicine, the simple fact is that we actually have a pretty good analog -- veterinary healthcare. The relative lack of regulation means that yes, there may well be more bad vets than bad doctors, but also that the market influences hold more sway. People don't just pick a vet out of the phone book. They ask around, get recommendations, find out who their friends trust. Care is incredibly cheap and generally high-quality. Moreover, there is a range of care available to people, in accordance with how much you are willing to spend, which means people are less likely to forgo preventative or minor care because of excessive expense.

Again, I'm assuming that his argument is that, absent the hand of government, it'd be nigh impossible for a single trade organization like the AMA to gain this kind of long-term market control.
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