Foreign Physicians and Health Care Costs

JAMA's article on foreign doctors harbors a naive central assumption; that bringing more doctors into the US will reduce the average physician salary. But Maggie Mahar weighs in and it may not be so.

Has everyone forgotten that competition between physicians tends to raise total costs rather than bring a healthy competition-induced drop in prices? Nobody really understands this counter-intuitive observation, but where physicians concentrate, more health care is delivered. It was one of the challenges of the Dartmouth Atlas to demonstrate there was real variability in the frequency of certain procedures, given the variations in the concentration of the specialists doing those procedures. More diagnostics lead to more opportunities for intervention. In the presence of salary pressures, physicians come up creative ways of maintaining a competitive lifestyle including the overuse of technology well within the gray range of the 'medically necessary'.

Oberlander's NEJM editorial is careful to only refer to managed competition; that is competition between insurance companies. But the brilliant management guru Michael Porter has taken on health care and refers to competition between providers and physicians. My instinct tells me it is of limited usefulness, that is only between large consolidated group of physicians or hospitals. In the more fragmented environment of small practices that still characterizes a significant proportion of health care, it is unlikely that competition would reduce physician salaries, and so have a limited impact on some prices for health care.

The use of the word 'provider' has confused the issue, as does the question of physician income versus health care prices. Competition may work for hospitals and large practices, but not with physicians. My world is primary care and incomes are below the range at which there can be a robust and significant growth in supply. Foreign doctors are not always so happy to stay in primary care. In many instances, foreign-educated doctors may be more specialty-driven, more entrepreneurial and less community-driven than native-born physicians.

With all due respect to Maggie Mahar, the doctors who are committed to their communities are less likely to leave their countries in the first place. Although recruitment of foreign doctors ignores international resource needs and risks a brain drain from countries that can least sustain it, the emigration of physicians will not necessarily improve the situation here. One of many reasons to leave is the pursuit of higher incomes, richer lifestyles and better opportunities.

At least in primary care, incomes are inappropriately low, given expectations for performance. I doubt the local plumber is going to be immediately available to dispense advice 24/7/365 for twice what the average internist makes today.

Competition makes absolutely no sense when prices are high partly due to a supply shortage. Bringing more doctors into the market, although a welcome notion, does not address the fundamental perverse failures of the US health care market. Nor will it reduce physician incomes! Nor will it reduce the nation's health care bill!