Government Reform

Reason.tv: Bracing for ObamaCare—Shirley Svorny on the Economics of Healthcare Regulation

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ObamaCare expands coverage to millions of Americans, but, warns Professor Shirley Svorny, without stronger measures to expand the supply of healthcare providers and contain costs, we can expect a physician shortage and soaring premiums.

The California State University, Northridge economist suggests options for lowering costs and dismantling state-level regulations that restrain competition and innovation.

Approximately five minutes.

Interview by Paul Detrick. Shot by Alex Manning and Detrick. Edited by Austin Bragg.

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  1. 20 Worst-Paying College Degrees in 2010

    If you want to avoid the worst-paying college degrees, think twice before choosing a college major that involves children.

    Included among the 20 worst-paying college degrees are elementary education, special education, social work and child and family studies. That’s the conclusion of the latest annual study of college degrees by Payscale, Inc. that compiled starting and mid-career pay for dozens of college majors.

    College Degree
    Starting Pay
    Mid-Career Pay

    1. Child and Family Studies
    $29,500
    $38,400

    2. Elementary Education
    $31,600
    $44,400

    3. Social Work
    $31,800
    $44,900

    4. Athletic Training $32,800 $45,700
    5. Culinary Arts $35,900 $50,600
    6. Horticulture $35,000 $50,800
    7. Paralegal Studies/Law $35,100 $51,300
    8. Theology $34,700 $51,300
    9. Recreation & Leisure $33,300 $53,200
    10. Special Education $36,000 $53,800
    11. Dietetics $40,400 $54,200
    12. Religious Studies $34,700 $54,400
    13. Art $33,500 $54,800
    14. Education $35,100 $54,900
    15. Interdisciplinary Studies $35,600 $55,700
    16. Interior Design $34,400 $56,600
    17. Nutrition $42,200 $56,700
    18. Graphic Design $35,400 $56,800
    19. Music $36,700 $57,000
    20. Art History $39,400 $57,100

  2. without stronger measures to expand the supply of healthcare providers and contain costs, we can expect a physician shortage and soaring premiums

    Uh, I know it’s rude to say “I told you so”, but remember when a few of us Canadians tried to tell those Americans who wanted “Canadian Style” medicare (Libertarians are obviously not in that group) that there would be problems with supply and costs?

    Well, we told you so.

    1. There are Canadians who think ill of the Canadian healthcare system? I didn’t even know you existed.

      And hear I had relegated Canadians as the Great White North equivalent of the “BUY YEW ESS AYY” crowd we have down here…

      Do other Canadians think the same way or are you an aberration?

      1. are you an aberration?

        I live in British Columbia, not Aberra.

        There are a few Canadian libertarians. However, since Bell Canada and Telus took down all their phone booths, we don’t have a place for a convention any more.

  3. without stronger measures to expand the supply of healthcare providers and contain costs, we can expect a physician shortage and soaring premiums

    There is this terrific system for avoiding shortages, increasing the supply of in-demand goods and services, and controlling costs called a “market.” Unfortunately it doesn’t work at all when you dictate from on high what people will pay and be paid for goods and services.

    1. I’m interested in this “market” of which you speak, and would like to subscribe to its newletter.

    2. Better be careful with your talks of markets. Tony or Chad will be on you refuting the market and calling you a corporatist.

  4. without stronger measures to expand the supply of healthcare providers and contain costs, we can expect a physician shortage and soaring premiums.

    This doesn’t even make sense. If we expand the supply of providers, won’t we be expanding the amount of medical services provided? And if we grow the amount of services provided, won’t this increase the amount of money we spend on these services?

    Or, we can not expand the number of providers, which will impose a cap on the amount of services that can be provided, and (by extension) on the amount we spend.

    But I don’t see any way to do both. You can either expand outlays enough to support enough providers that there is ample supply, or you can try to control your global budget, which will inevitably lead to shortages.

    1. Expanded supply in providers (through deregulatory mechanisms such as loosening licensing requirements or allowing physicians assistants to do more) will increase the supply of services, driving prices down as the providers compete for your business. You seem to be saying that limiting supply will somehow affect demand; it won’t, and as demand continues to grow, prices will skyrocket.

      1. The AMA is the problem. They regulate the number of seats in med schools and residencies, deliberately keeping supply low and prices high.

        Less than 40% of people who apply to med school EVER get into one. There is no lack of willing doctors, and given how badly the salaries of competing professions (science, law, higher ed, business, etc) have been hammered in this recession, I can assure you that there will still be plenty of willing applicants in the future.

        1. Ah, Chad. Did you know that physician employees of State and Federal Gov don’t need to pass the usual licensing tests? Enjoy your Nigerian or Paki provider. I assure that you are incorrect about American kids.

          1. It is simply not true that physicians employed by government are not licensed. Please provide some evidence for your statement, dr kill.

        2. Med schools are limited in number of students they can train. There are some schools in the Caribbean who train many more physicians than US schools but how well are they trained?

        3. Chad|8.16.10 @ 5:47PM|#
          “…given how badly the salaries of competing professions (science, law, higher ed, business, etc) have been hammered in this recession, I can assure you that there will still be plenty of willing applicants in the future.”

          Chad, are you familiar with the laws of supply and demand? The reason the salaries of med folks are what they are is *because* of the rent-seeking by the AMA. So once (or if) that’s gone, there is scant incentive to go to med school. Hence a resultant lack of supply in med folk.
          So either the AMA continues to restrict demand and raise salaries and restricts supply or the AMA fails and the salaries drop, along with the supply.
          Got that?

  5. Why can’t I run your Youtube videos here in Brazil?

  6. Shirley seems to get hung up on “physicals”. Doing physicals does not make people healthier. They seldom do anything to pick up disease in early stages. Save money by not doing physicals. This based on my experience of practicing medicine for 40 years. We can save lots of money in medical care by doing away with fee for service. Kaiser has the right approach in my opinion. I am not affiliated with Kaiser in any way.

  7. Having lived in Norway for many years, I can tell you this lady is spot on for what to expect of National Health Care: Quality and convenience go down, prices go up. Period. Not only is FedEx a good example, but so is Lasik Surgery, cosmetic surgery, and cell phone services – all of which are not directly regulated by the FedGov, but their succeess is obvious. Why don’t we emulate REAL success stories when it comes to Health Care?

  8. She forgot something vital: In the state of Alabama, BCBS has a monopoly. All we really need here is free competition, the laws that apply to all other businesses, to apply to the enormously profitable insurance companies as well, so that I can shop for insurance as well. BCBS Alabama doesn’t offer the prices or the array of services that it does in other states because it doesn’t have to. There are NO other viable choices.

  9. I agree with your point of view, your article is very good, thanks for

    your useful resources.

  10. The California State University, Northridge economist

    Go Matadors!!

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