> In recent years, the number of medical residents has become so restricted that even the American Medical Association is pushing to have the number of slots increased. The major obstacle at this point is funding. It costs a teaching hospital roughly $150,000 a year for a residency slot. Most of the money comes from Medicare, with a lesser amount from Medicaid and other government sources. The number of slots supported by Medicare has been frozen for two decades after Congress lowered it in 1997 at the request of the American Medical Association and other doctors’ organizations.

My guess is the 150K number ignores the revenue contribution of the residents (which must be significant because they carry out a significant amount of the work that requires a doctor at a hospital)

I did a google search and found one article that seems to confirm this: "Whether the programs are ultimately costs or moneymakers for hospitals is mostly unknown. Expenses tied directly to the programs are tracked, but overall cost-benefit accounting that would take into account such things as savings or lower medical bills for patients from the use of lower-paid residents instead of practicing physicians isn't done." http://www.modernhealthcare.com/article/20150719/news/307199...

The argument that federal funding is the only way to create more educational "seats" for doctors seems strange since the article claims they are paid much more than other fields, and is not really laid out well in the article.

This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals.

An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.

A similar thing is happening in the legal field. Clients wont pay for work done by first or second year lawyers, so large firms are cutting back entry level hiring and many smaller firms have stopped hiring entry level lawyers entirely. Thus you have a bizarre situation where there is a huge oversupply of JDs, but private-practice associate salaries continue to go up because there is a limited supply of experienced attorneys.

And the patient is still tended to by nurses, who do absolutely generate revenue for the hospital.

While they don't get a PFS payment, we also can't provide that Medicare pays for the residency and then everything else is a charity case for the hospital.

In market terms, this is clients saying entry-level workers with lots of education provide zero value, or the risk outweighs the benefits. If that's true, it means that people need training until 30-somethings before they are valuable to society. Or our education system is broken.

Or it's not true and it's market manipulation. Given the choice between "no service" and "pay a fair entry-level price", many people will pay something.

Talk about being sold a bill of goods - Come get a degree from here, and if you can't find a job, we'll garnish you and remove your ability to use the degree you're being garnished for.

I somehow doubt Hospital A, which has zero residency slots and receives zero residency funding from Medicare, cares if Hospital B down the road somehow loses their subsidies.

There is no "pure profit slot". Residency programs do not make money for the hospital. If they did, hospitals that do not have residency programs would open self-funded residency programs, and/or hospitals that already do have residency programs would expand theirs.

Yes, for the reason I said:

> An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.

Even if you don't trust the accounting numbers, you have to trust the overall (lack of) incentive for hospitals to create self-funded programs.

Saying the benefit is social benefit doesn't help here, obviously it is it's a hospital, there needs to be revenue numbers in the mix to talk about breaking even.

Given my background, I understand exactly what residents do.

My point still stands. Even if you don't trust the accounting numbers, you have to look at the end result.

Let's assume that residency programs are, at the margin, profitable for hospitals. Let's also assume that hospitals like profit.

- The statement "residency programs are profitable (at the margin) for the hospital" is logically equivalent to "increasing the number of residency slots (or programs) would be profitable for the hospital".

- If increasing the number of residency slots (or programs) would be profitable for the hospital, there would be more of them.

- However, there aren't - the number of self-funded residency programs has been (essentially) zero for decades.

Therefore, one of our two assumptions must be wrong. Either residency programs are not, at the margin, profitable hospitals, or hospitals just like turning down profit.

No, there are many options between 'profit' and 150k costs.

The question is can Medicare increase the number of residency's without increasing Medicare's costs. And because of the excessive number of specialists with higher associated costs the answer to that is clearly 'Yes'.

Thus, the cost of a residency slot is not inherently negative 150,000$/year. It's very possible for residency's to break even without hospitals to have any incentive to implement them, further that 150k/year provides profit even with the current mix.

Why are you bringing $150,000 into this? That's the median debt load of a resident - it has nothing to do with what a hospital makes.

> The question is can Medicare increase the number of residency's without increasing Medicare's costs. And because of the excessive number of specialists with higher associated costs the answer to that is clearly 'Yes'.

I... don't even understand what point you're trying to make here. The point is that hospitals cannot generally provide self-funded residency programs, because they lose money on those programs.

Yeas, it's true that not all residency programs cost the same amount - some fields are more expensive than others. But it's not like we're trying to optimize for the total number of residents in the system at any time; the reason we have more expensive programs like neurology is because we need neurologists. Yeah, we could "save money" by training them in EM instead, but then that'd just mean an even greater shortage of neurologists (and even higher market wages for neurologists).

Because 150k/year is the current subsidy per resident. People may reasonably not want to spend more money on this, but it's hard to argue with spending money more efficiently.

Residents are required to handle a minimum number of a large variety of cases by the time they graduate, in order to guarantee that they've seen a representative sample of cases in their field and have knowledge of all of them. E.g. a neurosurgery resident might need to do (completely fabricated numbers) 30 open vascular cases, 50 spine fusions, 40 tumors, etc. This is probably the primary limiting factor for specialist surgery residencies; these residents are profitable (they can handle the bulk of most simple cases fairly autonomously once they're a couple years into their training, and they stick around for 5-7 years), so many hospitals would like to hire more of them, but there are simply not enough patients with the necessary conditions for them to add more trainees.

For non-surgical residencies, the residencies are much shorter (so you have less time from highly-skilled residents), and the residents are less profitable, so funding is a significant limitation.

It's also important to note that residents are competing with mid-levels in the "less expensive practitioners" category, and mid-levels are a far better deal for the hospital in most specialties. They're somewhat more expensive in terms of raw salary, but they remain mid-levels, which means they have the time to develop near-perfect competence at the things they do handle, and they don't leave just when you've trained them up. A few good mid-levels make all the difference in keeping a department running smoothly.

Because they... don't make money if they do?

I don't know how to make it any clearer. The costs of providing additional residency slots (paying resident salaries, paying additional attending salaries, paying taxes, paying insurance, etc.) don't bring in enough additional revenue or offset enough other costs to be worthwhile.

It's not particularly complicated math - it's the same arithmetic a McDonald's franchise owner has to do to decide whether to hire another person to flip patties, just with bigger numbers attached to it.

A concrete example: I've had a resident do a checkup while I was in the hospital. If they hadn't done it, a fully trained doctor making a lot more per hour would have needed to. Did the hospital lose money on that checkup? If so, wouldn't they have lost more money if the fully trained doctor would have done it? If they make money on that sort of thing, what kinds of things are the opposite?

I don't know how it works, I've only ever been a patient. It seems like you might know, so I'm asking you how it works. Do you see how "they don't make money" is really not an answer?

You're assuming that, in the absence of the resident, they'd be hiring an additional attending physician. In reality, they'd just have a smaller staff, and you'd have to wait longer, the doctor would have to work longer/harder/faster, etc to cover the same patient load.

Hiring a resident doesn't bring in additional revenue. Insurers don't reimburse more per patient just because an additional physician was involved. Hiring a resident doesn't bring more patients in the door, because that's not the bottleneck for hospitals anyway. It does increase costs, because it's an additional person on staff - they have to pay them an extra $51,000/year, plus 25% of the cost of an additional attending physician to supervise them (and three other residents), plus taxes, plus health insurance, plus insurance to practice medicine, plus licensing fees, and so on.

> Did the hospital lose money on that checkup?

Probably not, unless you're on Medicare or Medicaid - in which case, yes, they do lose money on you on a per-patient, per-service basis.

If residents are just cheaper doctors, then hospitals would optimize for a high resident:attending ratio.

So what is it? As far as I know, in hospitals residents are really cost effective doctors. Yes, sure, they don't do the big fancy operations, but they are very capable.

It might be that hospitals have other parameters to factor in. Maybe if there would be too many residents compared to regular doctors, people would flock to other hospitals. And so on.

Yes, because they aren't yet trained to practice medicine. Residency is where they are trained to practice medicine.

> Do they require so much supervision?

Yes, both by practicality and by law.

> If residents are just cheaper doctors

They're not "just" cheaper doctors

> then hospitals would optimize for a high resident:attending ratio.

They tried. Patients died. Now we cap both the number of hours they can work per week (80 hours/week) and the resident:attending ration.

Sources :

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2896592/ https://www.ncbi.nlm.nih.gov/pubmed/21747093

Or of course it means, that attending doctors do a constant amount of (insufficient) supervision, or they ramp up supervision after someone screws up... :|

Residents are cheaper doctors, but they are cheaper because they are less trained, less experienced doctors. They aren't equally-capable doctors with lower salary demands.

But maybe the problem is that if we would have more generalists that'd just shovel more load on the specialists.

Once again, "non-profit" or "government agency" doesn't mean "no profit motive". The profit motive affects all players.

Someone has to pay for it, at the end of the day.

But do they do so at lower total cost including both their direct costs and the additional cost of supervision by a more senior doctor?

For the rest, well, I can't be as laudatory.

>This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital. From an accounting or business perspective, it's pretty clear that residency programs don't make money for hospitals.

It's pretty clear you are wrong here. Let's look at actual sources for a change: https://www.cms.gov/Outreach-and-Education/Medicare-Learning...

"Medicare pays for services furnished in teaching settings through the Medicare Physician Fee Schedule (PFS) if the services meet one of these criteria: 1 They are personally furnished by a physician who is not a resident 2 They are furnished by a resident when a teaching physician is physically present during the critical or key portions of the service 3 They are furnished by a resident under a primary care exception within an approved Graduate Medical Education (GME) Program"

Crucially, there is no distinction between how much a hospital can charge for services an attending working alone has delivered (1), and how much it can charge for services a resident has delivered, as long as the attending signs off on it (2). You might naively suppose that the "physically present" part of (2) means that both attending and resident are in the room for the dx differential, and through a Socratic back and forth they jointly treat the patient, and you'd be mistaken. And of course, if you're in your final year of residency, or you're a Chief Resident, the oversight an attending will choose to exercise will be perfunctory. Read more about just how much (or little) it take to technically comply with these rules: http://www.hcpro.com/HIM-283624-8160/Coding-billing-and-docu....

Then reread this short, moving piece published in the NYT mag for an illustration: https://www.nytimes.com/2017/10/24/magazine/the-rules-of-the.... As a resident in his third year out of medical school, how was it that the author was able to essentially run his own service if residents are really just stumps of malformed medical errata, all but useless unless they have their hands held by an attending?

Or just ask yourself: how is it that you can give a hospital a senior resident in radiology, or anesthesiology, or dermatology, who is just months away from demanding 350k+ on the job market, cap the resident's salary at 60k or less, and have the ability to work them for up to 80 hours, how is it that a hospital fails to make money here?

Sure, you can go through all the malpractice costs that have to be priced in, the free cafeteria food, the upkeep of the residents lounges. Sure, and Google spends a ton on the great insurance and fun perks it offers too. Somehow they manage to make sure they don't lose money on their employees.

>An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.

An even easier way to see you're making things up is to realize that medical residents can earn up to $100+/hr by moonlighting[0], all while they're apparently causing their home institutions to "predictably lose money" while earning an 10% hourly rate.

[0] https://www.staffcare.com/medical-moonlighting-for-residents... and the doctors discussed in this article aren't getting these opportunities after some long rigorous period. One of them was in his second year of residency once he decided to start moonlighting, literally a year out of med school. Again, this goes to show residents are pretty valuable right off the bat, are (overall, generally speaking) a bargain for their home institutions, and only get more financially profitable as time goes on.

Look, I could respond to each of the points you bring up in turn, and explain how it's actually quite easy for those individual statements to be true but still impossible for most residency programs to turn a profit.

But I've been on Hacker News long enough to know that, when someone begins a lengthy comment with an insult that underhanded and that personal, there's no way that they're in the mood for a good-faith discussion, and attempting to engage further in a reasoned debate is a recipe for frustration.

I see you're a relatively new commenter here, so I'll just say: on the off-chance that this interpretation is wrong, and you were looking to have a good-faith discussion on the topic, I'd recommend next time leaving off the personal insults.

That being said, you've made ~15 comments itt, in which you're variously appealed to your own authority ("Given my background, I understand exactly what residents do". Actually, I don't know any medical resident who could make such a statement, given how broad and diverse the fields that postgraduate medical training encompasses are, but sure.), and made repeated statements about what residents are and aren't capable of, all seemingly without citation or reference.

All of which is to say, I think if you could have made the case that the facts and figures posted above, and in this thread, are perfectly compatible with your contention about medical residents being a net financial drain for hospitals and academic centers, you would have done it by now. In that sense, I agree further debate would probably not be very productive.

One way this makes sense is how Medicare pays teaching hospitals. A hospital gets $X for a procedure code. If they are a teaching hospital, they get $X+2% (can't remember the exact bump but it's relatively small).

The more expensive the procedure, the bigger the bump for being a teaching hospital. That's the incentive to get residents practicing expensive specialties.

There's no "gravy train" - residency programs are not self-sufficient without this money from Medicare. It costs a lot to train a doctor, and that's even paying doctors less than minimum wage in many areas[0].

If they were, hospitals would be free to open as many residency programs as they wanted without Medicare's subsidies, except they generally don't. There are very few non-Medicare funded residency positions, and they tend to be very special cases in obscure regions.

[0] The average resident salary comes out to $12.25/hour, which is literally less than minimum wage in some areas.

No, the fact that hospitals don't just hire more residents is what demonstrates that it's not profitable for hospitals to simply hire more residents.

So far, in this entire thread, nobody has been able to offer one explanation that doesn't ultimately boil down to either "hospitals don't actually want to increase their profit".

Here's a practical argument: perhaps combined with the uncertainty of the above calculation, administrators are humans, for whom the inertia of the status quo "this is just how it's done" is powerful.

That's all speculation, just like your purely economic argument is just speculation. What would provide actual insight would be some understanding of why residencies are unprofitable, if it's true that they are.

No, that doesn't add up. Hospitals only receive $80,000 per resident from Medicare. If residency programs were profitable at level P, they could increase them from N residents to M residents, where (80000 + P)N < P M[0].

Furthermore, hospitals that currently don't receive any money from Medicare would simply expand self-funded programs, because they wouldn't be losing anything by doing so[1].

There's also no way that hospitals would be doing so much to preserve a mere $80,000 stipend, because increasing the number of physicians is in their best interest - it allows them to decrease their expenses (physician salaries) in the long run.

> That's all speculation, just like your purely economic argument is just speculation.

No, it's not speculation; it's exactly what hospitals, government employees, elected officials, and industry analysts have pretty much all been saying for decades. And it's supported by the actual evidence at hand, including all of the financial figures that they publish.

[0] Of course this doesn't work if P is a decreasing function of either N or M, which is the entire point - it is decreasing, and in fact, is already negative for the current value of N.

[1] Except, of course, if P is negative - which it is.

I still think you may be downplaying the impact of the risk calculation hospitals have to make regarding their ability to receive the stipend now or in the future. It may be only 80k, but clearly that 80k is enough to incentive many hospitals to have residents, so it must be material to them to some extent.

Your point about increasing supply of doctors being in hospitals' interest in the long run is interesting, but this is the same training conundrum everyone has: it is often difficult to make the decision to invest in the near term when the payoff is not realized until much later.

I'm sure you're right about all this in general - training people is a tricky and expensive problem for every industry.

In this case, the likely culprit is that accepting residents for less than $150k/yr in sponsorship sabotages their ability to claim that the fair market value of residency training is $150k/yr, and they've calculated that the marginal benefit from accepting a single resident at a lower cost does not outweigh the risk of being forced to provide the same discount to their existing residency positions.

So you're saying that hospitals which receive no funding from Medicare eschew this potential profit center (a residency program) so that their rival hospitals can keep receiving funding from Medicare and make an even larger profit?

This makes even less sense than the other theory being proposed, which is that hospitals are eschewing short-term profit in order to increase the expenses they have to pay in the long-term.

> they've calculated that the marginal benefit from accepting a single resident at a lower cost does not outweigh the risk of being forced to provide the same discount to their existing residency positions.

only holds up for schools with existing residency positions, which there are many without. If a residency were profitable without the subsidies, one would expect to see those non-teaching hospitals launching residency programs. Especially so because they don’t have to worry about threatening the subsidies which they aren’t receiving.

My wife is in med school, here's my argument based on what I see in her education.

Training doctors is fucking hard.

Profits and business and all of that jazz plays a part, sure.

What I've seen is none of that really matters because hospitals can't even get enough qualified staff to support more residency positions. It takes a lot of work for a senior physician to include a medical student or resident in their daily activities. On top of already having a stressful job, dealing with naivety and inexperience of young doctors makes it very unattractive for doctors to want to participate in the process.

Yes, and I don't mean to discount the challenges in finding and compensating enough physicians properly for even agreeing to do this in the first place!

Put another way, what I was saying before is that, even if the costs were linear, hospitals couldn't pay for it (without external funding). But as you point out, the costs aren't linear, which makes it even harder.

Or put yet another way, we can't easily increase the number of residents we train to practice medicine, because we don't have enough people trained to practice medicine in order to train them.

This isn't unique to medicine; we have the same problem with law too[0]. Heck, I even know startups that have complained that they don't have the bandwidth they need to hire and train more people.

[0] https://news.ycombinator.com/item?id=15758207

This is pretty common knowledge among doctors of course, who starting at least a decade ago, have started clamoring for more and cheaper places in education programs. These it's tough finding any doctors at all who aren't asking for more doctors in training.

But systematic decisions to defund education, starting a long time ago (like 30 years ago or so) and have continued under every government since. That is the root cause here.

That's why medical networks are forming -- they put the GPs on a salary, cram in more nurse practitioners and PAs, avoid union contracts that are more common in hospital settings and extract more money from those settings.

So you have lots of implicit and explicit subsidy. Hospitals lose money on Medicare and some medicaid patients, and on no-pay patients who lack insurance. When my wife had my son, the unplanned c-section cost over $40k, largely because of those insane overheads that require subsidy.

Sutter is a shining example of this type of health system -- get huge regional scale, vertically and horizontally integrate, control patient flow, and crush payers at the negotiating table. Their prize is having some very profitable hospitals, including the second most profitable in the nation (almost $300M / year in profit at one hospital). And this profit is after paying their execs handsomely

Hospital spending is the biggest driver of cost, in no small part because of practices like the above

The Catholic hospital and medical network in my region was swallowed up with Trinity Health, which is a national medical network. Your interaction with a doctor or hospital is entering a sales funnel, where each additional interaction is engineered to generate more revenue for the network.

A family member had a stroke, which was debilitating and had a bunch of after affects. Prior to hospital discharge, the social worker (aka salesperson) drops a packet of nursing homes in the room and demands that it gets filled out by the end of that day. (which is illegal) That packet doesn't include acute rehab facilities, which is contrary to their physician's guidance. The list is sorted by available beds and exclusively consists of nursing homes owned by the medical network.

That is terrible about your family member though. Its a horrible system

Yea, but this is on over $12 billion in revenue. That's less than 2.5% margin.

it is interesting that sutter's overall system-level profit is $370M. i think they have a few other very profitable hospitals as well. they must spend a lot on corporate sg&A and executive salaries (their CEO has a $7-10M salary IIRC)

https://www.forbes.com/sites/brucelee/2016/05/08/very-profit...

https://www.beckershospitalreview.com/lists/100-top-grossing...

I'd love to see a breakout of corporate g&a vs provider level g&a at sutter vs a set of comparable systems. All that "non-profit" profit has to go somewhere

Medicare reimburses rates below-cost. About 7% below COGS, which means they lose money per-patient, even before they have to pay doctors, nurses, janitorial staff, etc.

> Or you know, hospitals with residency programs could just use of the massive insurance money they make to fund residency positions.

The "massive insurance money" is used to subsidize the losses that hospitals make on Medicare patients.

> It's not like the residents aren't employees or something

Great point. And that's why companies generally don't hire employees unless they work they do is profitable for the company. As it turns out, residents are not profitable for hospitals, which is why hospitals don't "just hire more of them".

This isn't quite in line with reality. If you familiarize yourself with specific hospital system figures, you find gems like this: Of Beaumont Hospital's 395 residents, 91 are not covered by Medicare and so are paid for by Beaumont. The $57 million for GME represents 4.73% of Beaumont's net patient revenue in 2013, or about $189,368 per resident. [0]

The 91 residents that are trained within the hospital system without medicaid funding speaks to the fact that residents are in fact employees. [0] http://www.modernhealthcare.com/article/20150719/news/307199...

...nobody ever said that residents weren't employees? The point is that they are and hospitals aren't going to go out and hire more unless it's profitable for them to do so. (Which it isn't, or else they would have done so, and that article even says as much).

I never said all do - I said that in aggregate, Medicare reimbursements are 7% less than COGS. "Efficiency" doesn't really enter the picture, because COGS isn't driven by efficiency (ie, overhead); it's driven by upstream costs.

> So logically it is better to employ more residents if you have sufficient patient load since it would reduce COGs.

Nope, none of the stuff you mentioned falls under COGS.

> One could argue that medicaid and medicare patients are sicker and there are more of them than most so they provide a larger revenue stream than private insurance covered patients (and they also require more procedures)

This is the classic "we'll lose money per customer, but make it up in volume" argument.

Ok, then please define what you mean by COGs.

>This is the classic "we'll lose money per customer, but make it up in volume" argument.

You misunderstand the argument. Since I wasn't clear, these two articles highlight the main points:

https://www.kff.org/report-section/a-primer-on-medicare-how-...

https://www.washingtonpost.com/business/economy/medicare-pri...

Also with respect to these and the efficiency argument, please see:

https://theincidentaleconomist.com/wordpress/hospitals-medic...

All anyone in this thread is trying to figure out is why folks getting paid poorly to do work that we know costs tons of money (because we see the bills) would incur net negative profit.

Because hospitals have to pay:

- residents' salaries

- attendings' salaries

- health insurance

- residents' insurance (for practicing)

- licensing fees

- taxes

It turns out, that all comes out to a lot of money. And hiring additional residents doesn't really save them much money, or bring in much additional revenue. The costs are greater than the revenue or savings. So, it's not profitable.

> to do work that we know costs tons of money (because we see the bills)

That's a question of medical billing, which is a whole other separate topic. In short: hospitals don't receive anywhere near the sticker amount for those bills, and a massive chunk of reimbursements from privately-insured patients goes towards recouping the losses that Medicare and Medicaid patients incur (as explained elsewhere, hospitals lose money on a per-patient basis for publicly-insured patients).

It seems to me that all of that (both the fully loaded costs of an employee, and the complexity of medical billing) applies equally to any other doctor, with a single exception. The exception is the portion of the attendings' costs that can be "charged" to each resident.

Is it that the additional cost in attendings' time, along with the reduced ability to earn larger sums for complex unsupervised procedures, outweighs the lower salary?

Or provide alternate ways for people to demonstrate equivalent competence.

Or eliminate the residency requirement completely.

Huh? What does that even mean? The only people who do their residency training with EM physicians are residents training in... EM.

> Or eliminate the residency requirement completely.

So... have people who aren't qualified to practice medicine be allowed to practice medicine?

Residency isn't just some arbitrary requirement - it's how neurosurgeons actually train in neurosurgery[0], and so on.

[0] Well, to be pedantic, neurosurgery also requires a post-residency fellowship. But you'd be hard-pressed to make the argument that neurosurgery fellowships could somehow eschew the residency requirement - it's a prerequisite for a reason.

Doubly pedantic: further specialization within neurosurgery (complex spine, vascular, tumor, peripheral ...) is done via fellowship, but plenty of practicing general neurosurgeons ended their training with residency. Source: wife is in her final year of neurosurgery residency. Of the folks in her program who have graduated while she's been around, about 1/2 did a fellowship, the other half went straight into practice.

(I hesitate to post this extremely minor correction, because everything you've said in this thread is absolutely spot-on and a very welcome dose of facts.)

So please enlighten me instead of just slamming what seems a fairly obvious point without adding anything of actual substance to the discussion. Because from the perspective of an actual patient it seems rather silly that a nurse can't take a blood test, and a paediatrician-in-training can't study with a family doctor or another paediatrician in a private practice. And it seems absurd that extensive state funding is now accepted as necessary simply to certify someone to oversee tasks like prescribing antibiotics, or signing-off on STD tests, or allowing patients to get blood test results.

No-one is suggesting that neurosurgery should be done by people without specialized training (I would actually think that "residency" is a poor way of measuring competence in that field as well, fwiw). And by reducing the complaints to this rather silly level all you are really suggesting you have no practical answer to the question of why "residency" is a reasonable bottleneck blocking the certification of doctors and keeping the costs of general medical care far above what is actually needed to deliver the vast majority of it that doesn't involve cutting into people's brains.

EDIT: I love the downvotes people, but you would be better off answering the question since I have karma to burn and enough experience with the US medical system to know that "residency" hasn't been necessary for almost any of the medical care I have received.

> Why have you elevated some bottleneck guild requirement into a general license to write prescriptions? Or sign-off on an STD test? Or allow patients to get blood tests? Or to inform them of said test results?

Literally everything you listed here can be done by a mid-level (i.e. non-MD), and commonly is (though the scope of prescriptions they can write is limited by states, IIRC).

> by reducing the argument to this level you are only suggesting you have no adequate response to the actual problem

I have no idea what you're talking about; I posted a minor factual correction to someone else that has nothing to do with this point. Again, you seem to be very, very confused.

----

In your edit you say:

> I would actually think that "residency" is a poor way of measuring competence in that field as well

Residency is not a tool for measuring competence. It is the means by which that competence is acquired[1]. You demonstrate competence by passing the written and oral boards in your specialty.

> "residency" hasn't been necessary for almost any of the medical care I have received.

May this continue to be true. If everyone were so lucky, the medical system would be much, much simpler.

[1] Foreign doctors who may already be competent are required to go through residency in the US as well; there probably should be a way to short-circuit that and allow them to demonstrate competence.

You may simply be talking past each other here. All of my (now doctor) friends who went through residency pulled at least one, and usually more than that, rotations through ED. I can't imagine all 3 hospitals had wildly different residency programs than the rest of the nation, so I imagine 3-6mo of ED rotation is quite common during residency.

This does not sound like a system where students can fulfill their residency requirements working at general care facilities with trained doctors who have years of experience.

> The major obstacle at this point is funding. It costs a teaching hospital roughly $150,000 a year for a residency slot.

So why exactly is there a slot shortage if people can literally fulfill their residency requirements pretty much anywhere? There are plenty of hospitals that could easily use the labor.

I mean... I appreciate getting downvoted for reading the article and addressing it directly, but if there are indeed adequate residency spots then you are disagreeing with the article and would be better served to focus on what it gets wrong instead of attacking me for making rather rudimentary observations that follow from its core premise.

[1] however, from what I've seen it isn't a critical issue for US healthcare; we need more mid-levels and to expand their scope of practice more than we need residents. For residents, it would be far more effective to reduce the span of pre-residency training somehow, so that people aren't starting residency with $300k in debt.

According to the above article, new programs are not capped. However, the bureaucracy hurdles you are required to jump to establish such a residency program is huge.

Another way is to require certification for more kinds of activities in the first place.

If Americans want access to less expensive healthcare, why not make it so that some kinds of medical treatment are available from people with ~2 years of education instead of 10? (Yes, the treatment would be inferior, but also much less expensive.)

Also, when IBM's Watson becomes the world's best diagnostician (Any Day Now), what will its legal status be? Probably IBM would be happy with a special exception to the law that makes it hard for other computer companies to enter the market?

We already have. It turns out that patients generally don't want this. When given the choice, they generally opt for the practitioner with more training (the physician) over the one with less (an NP or PA).

Sure, we can (and do) pass these costs on to the patient, or (in some cases) force them to use the cheaper option, but at that point, you're literally talking about either:

(A) forcing patients to assume the costs of their care directly, either entirely or in proportion; or

(B) forcing patients to use the lower-cost, lower-quality option

Politically, people don't like (A) because it means patients' access to quality medicine is restricted by their ability to pay. And people don't like (B) because nobody likes to be told that they can't have access to the top level of quality (whether or not they're expected to pay for it themselves).

That's because there's no price consequence for the majority of people in that circumstance. If the doctor costs $500 to see, the 2 year example costs $50, and the person actually has to feel that cost, it's very obvious which one they will choose.

Most working Americans get heavily subsidized insurance from their employer; most of the rest get almost entirely subsidized coverage from the government. Accordingly, very few Americans ever directly touch the cost of care. The majority of all Americans never get anywhere near that in fact. That's one of the big reasons why we're spending a trillion dollars per year beyond what we should be.

Yeah, by my calculations, my SO is currently taking home around $-1 per hour in residency. Some reasons: ~50k/year, expensive area, ~400k in loans, 8% interest rate.

I took a slightly more comfy route, career-wise (Ph.D.). Her bank account will likely surpass mine when she's ready to retire (around 55-60).

Most of the residents I've been around either seem to be in denial about how terrible their debt situation is or quickly change the subject.

At the time she's licensed, she'll be over a million dollars behind where she would have been if she went straight into industry. Break even is something like 25 years down the road - even with "high doctor salaries"

If there are more aspiring doctors than can fill the subsidized slots (there are), you can balance demand and supply by passing some of the costs on to the resident[1]; many will still gladly accept this because of the extreme returns to becoming a doctor.

The fact that they don't allow that happen is not a funding issue.

You can further massively increase the supply at little cost to doctor quality by getting rid of the pointless four-year degree pre-requisite. (vindicating the blame placed on the AMA)

More generally, if demand vastly exceeds supply (as it does here), subsidies can't be the bottleneck. To reiterate the analogy (from the past copies of this exchange), it would be like saying the musical Hamilton can't come to LA because the TSA won't pay for the plane tickets to get the cast down there. No: there is enough demand to cover the cost of airfare. And there is enough demand to cover the shortfalls in resident subsides.

[1] Concretely: instead of funding 100,000 slots at 100%, fund 120,000 at 80% or something like that.

And every time, I've explained that there aren't "extreme returns" to becoming a doctor. After accounting for all the expenses that physicians are required to pay out-of-pocket (which are not tax-deductible, due to AMT), the expected take-home pay is lower than what a mid-career engineer at Google or Microsoft makes, And the debt load is already high enough that it's discouraging people from entering the field[0][1][2], due to both the size and the risk..

Making medicine an even riskier bet (by taking on an even larger debt load with a longer time horizon) isn't going to solve any of that; it'll just lower the overall quality. At that point, it's more efficient to talk about NPs and PAs than piling on more debt to physicians.

[0] https://news.ycombinator.com/item?id=15758833

[1] https://news.ycombinator.com/item?id=15757466

[2] https://news.ycombinator.com/item?id=15758984

Also, the returns aren't simply monetary, but the fact that you have much higher social status in general that outweighs a lower net salary, even if it got to that point.

>Making medicine an even riskier bet (by taking on an even larger debt load with a longer time horizon) isn't going to solve any of that; it'll just lower the overall quality.

They still have to meet the med school and residency requirements.

>the expected take-home pay is lower than what a mid-career engineer at Google

The typical doctor would not qualify to work at Google.

>At that point, it's more efficient to talk about NPs and PAs than piling on more debt to physicians.

Or, as I said before, lifting the pointless requirement to have an unrelated four year degree. Or applying a whole host of QA feedback loops to the process. That doesn't change the fact that Medicare funding cannot reasonably be called the bottleneck here, for the same reason a subsidy can never be called a bottleneck when there is excess demand.

[1] marginal in the economic sense; not saying they are rare just that they're not common enough to affect the logic

The top ones absolutely would. In fact, math and statistics (which includes CS, in their categorization) is the second-highest performing undergraduate major for medical school matriculants.

You're kidding yourself if you think that the top students aren't making career decisions between medical school or finance and STEM and factoring in the massive difference in both risk and reward in the process.

> Or, as I said before, lifting the pointless requirement to have an unrelated four year degree.

There is no requirement to have an unrelated four-year degree - or any degree at all. Medical schools could accept someone straight out of high school. Except they don't, because the top-performing matriculants are those with a degree in the humanities, followed by those with a degree in the social sciences. Pre-med, amusingly, comes in dead last.

> the fact that you have much higher social status in general that outweighs a lower net salary

This may be the funniest thing I've read in this thread. No, compared to the other options available for a bright, qualified college student, going into medicine is probably the worst option if you want to optimize for either wealth or social status.

But sure, if you want to propose an incredibly convoluted process for filtering away the top prospective doctors (incentivizing them towards finance and STEM instead, for the better pay and respect), replacing them instead with less-qualified, middle-of-the-pack, independently-wealthy people who are willing to take on an extremely large and risky debt load because they can afford to and they don't have any other well-paying options... fine, go ahead, I won't stop you. If you think that that's the answer, then that means there's no policy solution needed. Nothing's stopping you from finding those people and going to them and encouraging them to take on that debt load themselves and apply to medical school today. They can take out those loans themselves, or use their own money to pay their own way.

But then please stop derailing these conversations by talking about lifting non-existent requirements, or making rather pedantic quibbles about terminology. When we're talking institutional policy, it's perfectly fine to say that an existing subsidy is "the bottleneck", in the sense that, ceteris paribus, increasing it would alleviate the problem and decreasing it would exacerbate it.

>The top ones absolutely would.

I was referring to the typical one.

>Medical schools could accept someone straight out of high school. Except they don't, because the top-performing matriculants are those with a degree in the humanities, followed by those with a degree in the social sciences. Pre-med, amusingly, comes in dead last.

But they're not even considering those without a four-year -- that's another cause of low supply.

>This may be the funniest thing I've read in this thread. No, compared to the other options available for a bright, qualified college student, going into medicine is probably the worst option if you want to optimize for either wealth or social status.

You're saying the typical doctor has lower social status than the typical CS job or finance?

>But sure, if you want to propose an incredibly convoluted process for filtering away the top prospective doctors (incentivizing them towards finance and STEM instead, for the better pay and respect), replacing them instead with less-qualified, middle-of-the-pack, independently-wealthy people who are willing to take on an extremely large and risky debt load because they can afford to and they don't have any other well-paying options...

That's a strawman -- the comparison was to doing e.g. 10% more residencies by having them 10% less funded. Still no requirement for independent wealth.

>But then please stop derailing these conversations by talking about lifting non-existent requirements, or making rather pedantic quibbles about terminology. When we're talking institutional policy, it's perfectly fine to say that an existing subsidy is "the bottleneck", in the sense that, ceteris paribus, increasing it would alleviate the problem and decreasing it would exacerbate it.

When you talk about "the bottleneck", has a precise meaning: "this is the limiting factor that must be relaxed for any growth". If that criterion doesn't hold, it's just one of many factors and one of many options to consider.

When you say that Medicare subsides are "the" bottleneck, you're claiming it's literally impossible to have more doctors unless a government agency spends more tax money on it. That's every bit as false as the equivalent claim about Hamilton in LA and the TSA: if the private market is already willing to pay, and to be paid, enough for it to happen, the problem can't be insufficient subsidies, but a refusal to implement well-trod solutions (or the regulations that prevent that well-trod solution).

That is definitely not a pedantic quibble, but the difference between "this needs more money" and "this only needs more money because they're adhering to harmful practices" (like rejecting qualified students who don't yet have a four year degree, which they're apparently doing even if not required).

They're not. If they were a profit center, there would be more of them, unless you think that hospitals would willingly refuse to do something that's clearly profitable for them.

If it is the case that the author has intentionally neglected to mention other factors that contribute to a resident being a cost center, I would sincerely be interested to learn about this.

That's not what we're talking about.

What people are proposing here is literally that hospitals are eschewing short-term profit in order to increase the expenses they have to pay in the long-term (physician salaries).

Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability. What makes you think hospitals are different?

In addition to everything you said (which is true), in this case, the hospitals and doctors have opposing incentives. I can't imagine why hospital administrators would collude to increase their expenses (ie, their employees' salaries).

When Apple, Google, etc. were found to be fixing wages, they were trying to keep salaries down, not bring them up.

The original claim you were responding to was that a doctors guild artificially limits the number of doctors available by capping the number of medical schools, the implication being that it leads to higher a demand for doctors and thus higher prices.

Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them?

Are you disagreeing with the OP only on who is creating the artificial demand?

That's a pretty fundamental misunderstanding of economics, then. Capping the number of medical schools can't cause higher demand for doctors. It can restrict the supply, which means that the prices will be higher, but it doesn't affect demand at all.

> Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them?

Even if this premise were correct: why would hospitals refuse to do something that's profitable for them, just so that they could pay more in expenses (salaries) in the long run?

My lord, that clearly means an excess of demand over supply.

Because they expect revenues to outpace those expenses??

First: residents are doctors.

Second: Yes, they ratio of residents to attendings is fixed, by law, as is the number of hours that they're allowed to work per week. Both of those were fixed because we found that working residents 100-120 hours/week and without enough attendings resulted in mistakes and people dying.

Since this ratio is fixed, it means that hiring 4 more residents also means hiring an additional attending, and you only get an additional 320 resident-hours/week from them. It turns out that this isn't profitable, because if it were, more hospitals would do it.

Does how long it takes someone to pay a debt off say anything at all about how big the debt load was? You've juxtaposed these sentences as if it does.

Many people pay off their student loans last, as they're usually very low interest. You could have a student debt into your 40s but not because you can't pay it off - rather because it's cheaper than your mortgage.

Why pay off a cheap debt to buy a new expensive one?

People probably pay off their student debts in their 40s as they part of pay off the last of the mortgages and look to finally get rid of other debts.

As explained below, no, the debt load that doctors hold is not very low interest. It's in the line of 8-10%. For contrast, I have credit cards that have APRs within striking distance of those rates, and that's consumer debt.

You seem to be thinking of undergraduate student loan debt, which is heavily subsidized.

>> They do not. You may be confusing the AMA (which less than 25% of doctors even belong to) with the AAMC.

Actually the AMA is the problem. They lobby to uphold the incredibly strict licensing requirements that doctors use to maintain the exclusivity of their job.

Doctor licensure requirements are stricter in America than most of Europe. For instance, why do doctors NEED to do a 4-year undergrad degree before medical school? Why do they NEED to go to a 2+ year residency after medical school? In Europe, students can go straight to medical school from high school.

Each additional licensure requirement to become a doctor decreases the supply of new doctors, increases the salary of current doctors, and increases the cost to consumers.

https://mises.org/library/how-government-helped-create-comin...

They don't. Medical schools can accept students straight out of high school, as long as they've completed the required pre-medical coursework. They don't, however, because those students drastically underperform their peers who received an undergraduate degree in a different field.

> Why do they NEED to go to a 2+ year residency after medical school?

Because without it, they literally have never been trained to practice medicine. Where do you get the idea that Europe is somehow different? Residency is required (and comparably long) in the UK, Germany, etc.

I guess all those Australian medical schools will be interested in hearing how their graduates "drastically underperform" all these American doctors who did a postgraduate medical school.

http://www.med.monash.edu.au/medicine/admissions/direct-entr... - Bachelor of Medicine, a 5 year undergraduate degree with direct entry from school, and the 5th year being clinical rotations.

Seems to work well enough, to me, as someone who has used physicians extensively in both countries, and worked in healthcare in both. "drastically underperforming" doesn't really fit that picture.

https://www.texastribune.org/2017/11/16/regents-vote-create-...

If there's an artificial restriction in the supply of doctors (because the government sets an arbitrary limit on the number of residency slots it will fund), then doctor salaries are inflated by government fiat. If we increase the number of residency slots to reduce the price of medical care --- which everyone seems to agree we badly need to do --- then doctor compensation will decrease. You seem to believe that's a bad thing.

The following shows the percentage of residency positions filled by speciality: http://www.nrmp.org/wp-content/uploads/2017/06/Main-Match-Re...

The issue isn't with the supply of graduating students, it's with the number of residency spots.

This year 95.3%[0] of graduating students matched to a residency program. Out of 18.5k applicants, only 17.5k matched to an available residency program.

0: http://www.nrmp.org/wp-content/uploads/2017/03/2017-Match-by...

Residents need lots of close attention by experienced doctors. The current attending:resident ratio is already suboptimal, from what I've seen.

doesn't matter if the non-debt income is substantially higher.. most would rather take 500k a year with 100k of debt repayment over 100k a year with none..