PH 370: supply

Overview of Supply Side of Health Care

• Focuses on the supply side of healthcare, including:
  • Clinician labor markets
  • Clinician pay and incentives

Key Concepts of Week 8

• Clinician Labor Markets: Examines the employment conditions, compensation, and supply dynamics affecting clinicians.
• Clinician Pay and Incentives: Discusses how clinician compensation affects healthcare delivery and labor market supply.

Supply in Economics

• Definition: The quantity of a product or service offered to consumers at a given price over a certain time period.
• Healthcare Examples:
  • Healthcare services (hospitals, clinicians)
  • Health insurance plans (private, public)
  • Health-oriented goods (healthy foods, clean environments).

Economic Context

• Demand Side: Covered in weeks 4-7, focusing on:
  • Health insurance
  • Adverse selection
  • Moral hazard
• Supply Side: Covered in weeks 8-11, topics include:
  • Clinician pay
  • Payment reforms
  • Technological impacts on healthcare.

Clinician Pay Comparison

• Certified Nursing Assistant (CNA):
  • 2023 mean pay: 43,050 - 47,960.
• Primary Care Physician (PCP):
  • 2023 mean pay: 256,730 - 305,960.
• Annual Difference: Around 258,000 between highest paid CNA and PCP.

Compensation Overview

• PhD/MD Training:
  • Medical education costs around 140,000 (public) - 225,000 (private).
  • Time commitment involves:
  • Medical school (4 years)
  • Internship (+1 year)
  • Residency (+2+ years based on specialty).
• Physician Pay by Specialty (2023):
  • Plastic Surgery: 501K
  • Orthopedics: 497K
  • Family Medicine: 219K.

Labor Market Barriers

• Historical overview shows 1800s had few barriers, while modern barriers include:
  • Regulatory frameworks
  • Licensing and accreditation requirements (e.g., AMA, AAMC).
• Monopoly Rents: Extra wages above competitive level due to artificial supply constraints.

Workforce Issues

• Current Clinician Shortages:
  • Resulting from inadequate supply compared to demand, especially in underserved areas (Health Professional Shortage Areas).
• Forecasts indicate nursing shortages and changing demographics among healthcare professionals.

Physician Agency & Ethical Considerations

• Physician-Induced Demand: The concept that clinicians may create demand for services to benefit financially, possibly leading to unnecessary treatments.
• Defensive Medicine: Refers to practices aimed at minimizing malpractice risks, potentially leading to excessive testing and procedures.

Solutions to Current Challenges

• Incentives for Training: Advocate for scholarships, loan repayment strategies, and finances for medical education.
• Regulatory Changes: Reevaluating licensing requirements and scope of practice laws to ensure adequate supply of healthcare professionals.

Conclusion

• The supply side of healthcare economics is vital for understanding clinician market dynamics, compensation structures, and the implications of barriers to entry in the profession. These factors directly affect the accessibility and quality of healthcare delivery in the United States.