If I could buy health insurance separately from my company I'd look into it. I know my company pays at least as much as I do for my insurance, but if I go off the company plan I can't get that money to use for insurance I like.

The result of this is I have incentive to not care what anyone charges. The only thing I can do is lower my satisfaction job rating if the doctor I want to go to isn't covered by my plan. If I actually could choose insurance I would would look into cheaper plans - if they tell me the doctor I want is more expensive so I need a more expensive plan to cover using him I would then have incentive to choose: see if I like a cheaper doctor, or pay more for the one I like.

The result of employer providing my health insurance is a large source of dysfunction in the health care market. I illustrated one, but there are others. (Note, there are other dysfunctions in the health care market - always it is complex)

So a middle-salary employee is looking at a 25% increase in healthcare costs due to paying with after-tax money.

You can. It's probably not in your best interest, because the individual market plans are more expensive, but there's nothing stopping you.

> I know my company pays at least as much as I do for my insurance, but if I go off the company plan I can't get that money to use for insurance I like.

That's your employer's choice. They could provide a cafeteria plan, which would give you the choice (but again, since individual plans are always going to be more expensive for the same level of coverage[0], they'd have to pay more money overall to provide the same tier of benefits).

[0] simply due to basic actuarial math

You can always venture away from your employer and visit healthcare.gov or a relevant state exchange.

From what you're describing I think what you're looking for is an HMO - either a branded facility like Kaiser or a "provider network" that agreed to guarantee prices to that specific insurance company.

You won't gain much transparency though - every provider works off the master price list, and the insurance company then negotiates a discount highly correlated with the size of that insurance company and general presence in the region.

While I agree with your points in general, this point is wrong. There are far more applicants for medical school (both MD and DO programs) than there are slots. I've been told this was done by the AMA to keep the supply of physicians in the US low to maintain high wages (and arguably high quality).

I do think we could allow students to go to medical school directly after high school, which is what some nations do.

Blaming the AMA is a dated view. I believe that used to be the case, but certainly isn't any longer. They are in favor of legislation that would increase the number of residency slots.[1]

edit: Forgot to add that US medical school grads aren't only competing against each other for residency slots. Foreign doctors that want to practice in the US also have to do a residency here due to licensing requirements.

[1]: https://www.ama-assn.org/content/ama-applauds-members-congre...

It's both dated and wrong. The AAMC, not the AMA, formerly capped the number of medical students in the country. But over ten years ago, they decided to lift the cap.

As you said, though, the residency slots are the bottleneck, so exactly what has happened is that we now have even more people graduating with debt from medical school who are unable to train in residency and eventually practice medicine.

Residency funding is subsidized by Medicare, so they're the ones who have the power to expand GME, if they want to.

You're right, but the reason that doesn't happen is that the price (ie, expected future earnings) is effectively fixed[0], and the current trajectory of that is already on the threshold of discouraging people from entering the field. As it is, a person who enters medical school at the age of 22 can reasonably expect to pay off their final student loan payment in their 40s[1]. That's a pretty hefty gamble to take at that age - you're assuming (against all evidence![2]) that medicine will continue to pay roughly the same in the future as it does today, and based on that assumption, you have to be willing to take a gamble that won't even break even until you're past normal childbearing age. That's a really tough sell, and I say this not hypothetically, but from experience.

It's similar to the "engineering shortage" in Silicon Valley - we know for a literal fact that the largest companies colluded to suppress wages, but simultaneously complain that they can't find enough workers that price. Except, we don't have to take out large amounts of debt before we can start working, whereas would-be doctors do.

[0] Not exactly fixed, but far from an actually competitive market that would allow proper consumption smoothing like you describe

[1] There are a lot of factors that determine this, like which specialty you choose, and where you practice, but that's a pretty reasonable rule-of-thumb estimate for someone who's still only thinking of applying to medical school in the first place.

[2] Physician earnings have been dropping steadily over the last few decades

With that said, why do you say doctor wages are fixed (and forseeably so)? Is there a variance in pay and legit competition for doctors and so on?

Also, I don't see why the long loan repayment period or anything else suggests doctor wages are hitting the "too low to get people into the field" level. Remember, there are still far more qualified people than med schools are willing to accept, which means there's still excess supply (in the sense that there isn't in SV tech labor).

Plus, being an MD has a level of prestige that doesn't show up in the wage, and which has numerous fringe benefits (like easier loan terms, since they know you'll probably always find employment).

You're right about the AMA limiting the number of medical school students. DO schools are not regulated by the AMA. Unfortunately, there are not enough residency spots for all the DO and MD students that graduate each year and they compete with foreign students. Increasing the number, which the AMA is doing without increasing the residency programs is just going to leave more students with 100,000s of thousands of student loans and no income.

0 - One medical, which charges an annual fee, makes preventative care more accessible? How do you possibly draw that conclusion. (I say this as a happy subscriber).

1 - purchasers of insurance, mostly still employers, do care about costs

2 - insurers aggressively negotiate with hospital groups, so you do see pricing power differences in action. Fewer hospital groups and condensed ownership in a geographic region gives hospital groups more pricing power. See eg Boston public employees insurance group attempting to cap payments at 160% of medicare [1].

3 - It's well known that for many common procedures, regional hospitals vs teaching hospitals can offer 3-4x price differences with no (or even better!) outcomes at the regional hospitals. It's the insurers choice not to pass any of those cost differences, except in the broadest sense, ie narrow vs wide networks, on to insurees. Insurers also exercises unilateral control over that decision.

4 - People aren't incentivized to get into med school? That's news to the many applicants. The admissions are capped, in many ways, by government choice: see medicare resident limits.

[1] http://www.bostonglobe.com/business/2017/01/23/state-health-...