By Aaron Edlin and Dana P. Goldman, The New York Times
Aaron Edlin is a law and economics professor at the University of California, Berkeley. Dana Goldman is a pharmacy and public policy professor and the director of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California.
Whenever we call our physicians, we can’t get in to see them for several months. Our colleagues have a similar experience. This raises a simple question: Who is going to treat the approximately 30 million newly insured?
It isn’t just physician practices that are full; nurses are also in short supply. The Institute of Medicine sounded the alarm about a shortage of health care professionals way back in 2002, and pointed out its adverse effects on the quality of care. When we asked one of our doctors if he will care for these newly insured, he said it won’t be him -– he is plenty busy already — unless someone offers him a lot of money.
And that is precisely what will happen. Health care is not immune from the fundamental laws of supply and demand. If demand for care rises and supply cannot increase, then prices rise.
That would make it more expensive for all of us, including those who are currently insured. More ominously, it may also mean that the Congressional Budget Office’s estimates of savings from health reform will prove ephemeral. We would like to believe Peter Orszag, the Office of Management and Budget director, when he says we will cut costs by finding waste, but that is easier said than done (as the RAND Corporation has found).
So, if we don’t put our faith in increased efficiency, how can we provide all this extra care, never mind at acceptable cost?
First, let’s dispel a common myth: By providing outpatient care earlier, we can diagnose and prevent disease before it becomes expensive to treat. Fewer hospitalizations and fewer emergency room visits, some hope, will reduce overall costs. The effect is undeniable, but overstated. On balance, findings from the RAND Health Insurance Experiment, one of the largest social experiments ever conducted, suggest that insurance increases costs. The best estimates suggest spending by the uninsured could increase by $85 billion with universal coverage.
So, absent any policy and behavioral changes on the supply side, health reform stands to make medical care more expensive and less available. Medicaid patients already have limited treatment options — especially for routine chronic care — and some doctors turn away Medicare beneficiaries. With more privately insured patients running around, the poor and elderly are going to find it harder and harder to see a doctor.
Prices will also rise for the privately insured.
The wages of nurses have skyrocketed in the last decade, particularly if one accounts for overtime. There is an acute shortage of nurses, and according to some economists like Barbara Bergmann, only illegal wage-fixing by hospitals keeps the cost of nursing from rising further.
Perhaps doctors could squeeze in more patients, but can office visits really get any shorter? Already many patients are limited to only a few minutes with the doctor, and this after one hour in the waiting room. The reality is that without some changes on the supply side, we will not be able to provide all this care, never mind in an affordable way.
We can — and will — train more doctors and nurses, but that takes years. So what can we do? Two simple but important policies that should accompany any reforms that increase the demand for medical care are:
First, the United States should allow free immigration for all qualified nurses, doctors and medical technicians whose wages exceed $75,000 a year. Such an increase in supply may not stop health care costs from rising, but it will prevent them from rising even faster with a potential upsurge in demand. Doctors and nurses will not necessarily welcome this foreign competition any more than others do, so we should beware of their defining “qualified” in too restrictive a manner.
Second, we should eliminate guild restrictions that prevent substituting other forms of care. Pharmacists in particular are well-trained, accessible and knowledgeable, yet they have been left out of the health care debate. In many cases they could adjust chronic medications without a face-to-face visit to the doctor. Only the difficult cases need to be referred to the physician.
Already, we see foreign hospitals beginning to bid for the business of American patients. As we increase access to medical services, we should look abroad to provide the skilled practitioners we need at affordable price. Immigrants can clean up our messes in more ways than one.