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Crisis in Veterans Hospitals and the Shortage of Doctors

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That veterans have to wait excessively to be treated is not the fault of the VA. The real reason is that that there is a shortage of doctors and not only for veterans but for the whole country. It seems to be a well-kept secret that practically all industrialized countries have more doctors per capita than the U.S. Compared to Austria's 4.6 and Norway's 4.0 the U.S. has only 2.6 doctors per 1,000 of its population.

It is rather odd that the United States can produce everything else in abundance but is unable to produce as many doctors per capita as other rich societies. The well-kept secret is that the American Medical Association (AMA) has been very successful in quietly restricting medical education in the name of fostering excellence in medical care. But that is just a pretext. The real reason is to inflate doctors' salaries well above competitive levels. Only half of those applying to medical schools are accepted, although generally the best apply and a much higher percentage would qualify. In addition, spite of the shortage of doctors, the medical profession is opposing foreign medical schools sending their students to the United States for internships. There are only 140 accredited medical schools in the country as compared to 200 law schools. So American doctors earn five times as much as Japanese doctors. I doubt seriously that they are five times more productive.

In order to increase the number of physicians per capita to Norway's level, the number of doctors in the United States would have to be increased by some 480,000. Compared to the 750,000 physicians in the United States currently, this would be a 60% increase. In other words, the high earnings of U.S. doctors are not brought about by market forces; they are not predicated entirely on their investment in education, but by the fact that the AMA protects doctors from market forces. In short, the AMA has been much more effective than other organizations in maintaining the salaries of its members well above competitive levels by restricting supply. Already decades ago Milton Freedman called the AMA the strongest trade union in the country. In other words, the AMA is for doctors what OPEC is to the gasoline market except even more successful in restricting supply.

What can be done about it? Not much, because the AMA has a stranglehold on medical education. But perhaps it would be useful for the Department of Defense (DOD) to set up its own medical schools so that it can train its own doctors in abundance. That should be feasible. DOD could also learn from the medical education in other countries in order to see how they are able to provide a better health-care system. In Germany, for instance, an undergraduate degree is not a pre-requisite to attend medical school. Students go directly from high school to medical school and thereby save four years' worth of time and expenses. Wouldn't that be something for the DOD could contemplate?

And are those doctors good enough? They're better! The evidence is that people are healthier and live longer if there is an abundance of doctors. Life expectancy at birth in the United States is three full years below that of Canada, 3.3 years below that of Australia, and well below Western European levels in spite of the fact that expenditure on health care is twice as much in the United States as in other developed countries. People in Israel live 2.5 years longer but spend one-fourth of what U.S. population spends on health care. Life expectancy among black males in the United States is at the level of Slovakia and Algeria, and below that of Tunisia and China. Something must be awry not only with VA hospitals but with medical care in general if a service that is so expensive delivers such inferior service. Our medical system simply does not provide adequate health care at affordable prices. So don't blame the VA. Blame the AMA!