Move over computer programmers. Medical doctors are also alleged to be in "short supply" these days. Meaning that we must import them from abroad—right?
Wrong.
Foreign-born physicians now make up approximately 23 percent of the total U.S. physician count, up from 17 percent in 1970. [Table 1]
Most foreign doctors come here on the J-1 program. Like its H-1b cousin, (see my H-1b analysis), J-1 is a guest worker visa.
The visa stipulates that doctors must return to their native countries after completing their hospital residency, and practice there before applying to return to the U.S.
But most don't go back: A loophole allows them to stay if they are hired by a hospital in a rural or inner city neighborhood.
And public policy has stimulated demand in exactly this area. Medicare provides a massive subsidy for hospital residency slots.
Data suggests that a resident is worth $70,000 a year to a teaching hospital. There are 24,000 such positions underwritten by Medicare —roughly 9,000 more than the number of MD degrees awarded annually by U.S. medical schools.
But at the same time, public policy has damaged the supply of American doctors.
It starts in medical school. We do little to help finance medical education in this country. By contrast, many foreign doctors are educated here, or in their home country, at heavily subsidized tuitions.
And American medical schools are expensive. The estimated total cost of four years attendance comes to approximately $140,000 for public schools and $225,000 for private schools. Although consumer prices are less than twice what they were 20 years ago, debt carried by the average medical graduate is 4.8-times higher.
At the same time dwindling insurance reimbursements, higher malpractice premiums (and increased competition from foreign doctors) have reduced the income that U.S.-born doctors can reasonably expect over their working lifetime.
And, although U.S. medical schools are graduating about the same number of doctors as twenty years ago, the gender distribution has changed dramatically— possibly as a result of affirmative action. Women have gone from less than a quarter of graduates to almost a half (Table 2). But many women graduates do not practice medicine full time if at all. Many quit medicine when their children are born.
Men generally don't have that luxury. They are avoiding medical school, as they are avoiding science and engineering generally, largely because the once-lofty economic returns simply aren't there any more.
This demand-supply gap has produced foreign medical schools in which every student plans to come to the U.S.—and U.S. hospitals that happily snap up every foreign applicant.
The truth: we probably have too many doctors. Funds spent on medical residency programs would be better spent helping Americans pay for medical school and increasing the pay for MDs who serve rural communities and inner-city neighborhoods.
The market for doctors is distorted by public policy. The mass immigration of foreign doctors is both a cause and an unnecessary and expensive consequence.
[Number fans click here for tables.]
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
