Thursday, May 18, 2006

Nanny State

I've been asked my opinion of Dean Baker’s ebook The Conservative Nanny State, which has some provocative theses on free trade and immigration. I'm interested in your thoughts. My take, after reading the first third of the book, is that he tends to oversimplify complicated issues. He also contradicts himself by offering opposing motivations of the "rich". For instance, if allowing more foreign-trained physicians would lower health costs, as Baker surmises, then why aren't the greedy capitalist business owners who pay the healthcare costs of their employees clamoring for more lax immigration policies for internationally trained doctors?

In fact, over 25% of the physicians currently practicing in the US are graduates of foreign medical schools; does Baker think that number should be 50%, 75%, 100%? In fact, foreigners make up a greater number of physicians than almost any other profession in the US, taxi drivers notwithstanding. If we are going to allow barrier-free immigration for physicians, then I suppose we are going to do the same for lawyers, chemists, teachers, economists and organic chemists as well. How many professionals should we allow in? A million? Ten million? 100 million? At some point we merely become a nation without borders, without sovereignty.

Baker would have a stronger argument if he supported opening more US medical schools or training more specialist surgeons to increase the competition, which economic law of supply and demand would seem to dictate lower salaries and lower costs. Unfortunately, studies show that if more surgeons practice in a given community, then more surgery overall is performed, even if the per capita number of cases declines. More doctors often leads to more healthcare expense. Just as having both a Wal-Mart and a Meijer store in town doesn’t mean that people will buy less televisions and toasters, having more doctors does not mean that people will access medical care any less.

It may seem I'm merely reacting to Baker's assault on the US medical system and his affectation for bemoaning the high salaries of US physicians, but I'm not. I have always been an advocate for a single payer system, or at least a single payment system, which could ensure better access to care for all at a controllable cost. This would surely provide the tools to decrease the total compensation paid to US physicians, but could lower the most highly paid specialists the most and spare those who provide primary care. In medicine, generalists make far less than subspecialty surgeons, with that discrepancy growing larger and larger. Salaries in medicine mirror the growing dichotomy in the US socioeconomic structure in general, with the rich getting richer and the "poor" just getting by. Just as in any economic system such large differences in wealth lead to class struggle and, as Marx and Engels point out, instability and warfare.

Another point I'll add: Baker keeps confusing immigration with free-trade. Restricting immigration is much different than restricting free trade. While US citizens may not be able to "enjoy the benefits” of having a horde of low-priced foreign-trained doctors rooting around their bellies at their local hospitals, these same citizens are more than free to travel to Mexico or Guatemala for their hysterectomy. Interestingly, that is happening to some degree with hospitals operating in Costa Rica and parts of SE Asia that cater to wealthy Americans and Australians, respectively. These hospitals are often staffed with well-trained nurses and doctors, but operate very cheaply because of the lack of expensive regulation and malpractice insurance. Caveat emptor.

In sum, the provision of healthcare is an extremely complicated economic model that even the venerable economist Peter Drucker couldn't solve. To think that simply opening our borders to every foreign doctor with a diploma would solve the problem is laughably glib. Would flooding the US market with foreign-trained physicians lower doctors' salaries? Certainly. But would it lead to lower healthcare costs? Never. And better quality? Ha! Is US healthcare in trouble? Yes. Does Dean Baker have the answer? Hardly.

Looking forward to finishing the ebook and engaging a more thorough discussion.

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