Licensure Supply of Medical Services

A Flexner Report on U.S. Health Care

A recent article in The New Republic examines some of the cunundrums facing today’s health care system.  Most significantly, the article mentions that “In the war against disease, we have unwittingly created a kind of medicine that is barely affordable now and forbiddingly unaffordable in the long run.”

The article offers a few suggestions of how to address many of the U.S. healthcare systems ills.  For instance, it makes a compelling case that more resources should be spent on health care for the young and middle aged relative to the elderly (since a health improvement for a young person benefits them over more years typically than an older person).

One of the major proposals of the article was “a top-down, bottom-up study of the entire U.S. health system, with a view toward taking it apart and reconstructing it in a manner adapted to our nation’s needs—a multiyear, multidisciplinary project whose aim would be to change the very culture of American medicine.”

The authors motivates the study using the Flexner Report as a precedent:

“At the turn of the twentieth century, U.S. medical education was a disgrace, and care of the sick, except in a certain few facilities, was almost as bad. Something had to be done. In 1908, the newly founded Carnegie Foundation for the Advancement of Teaching stepped in, hiring a 42-year-old educator named Abraham Flexner to embark on a study of medical education in North America. His report, published two years later, became a clarion call for drastic change. Subsequently, armed with a total of $600 million provided by the Carnegie and Rockefeller philanthropies and other contributors, Flexner visited 35 schools in the United States and Canada, and provided the financial wherewithal for the changes so desperately needed. The result of this remarkable effort was that, within ten years, U.S. medical schools became the prototype upon which all others tried to fashion themselves; our nation’s medicine, like the vastly improved institutions that gave it new life, became the gold standard for the world.”

Was the Flexner Report a force only for good.  Although its true that the Flexner report lead to the improvements in medical education, it also helped to turn medicine into a cartel-like occupation.   As physician education requirements increased and the number of medical school spots decreased, the supply of American-educated physicians has not kept pace with need.  Physicians use their smaller numbers to increase their fees.  Further, by restricting the provision of certain medical services to certain specialties, physicians have been able to restrict competition and drive up prices.  Flexner may have increased quality, but it also increased cost.  [For more posts regarding my thoughts on licensure, see here]

On a side note, the notion that we need a single study of the U.S. healthcare system is not revolutionary.  Taking a bird’s eye view of health care is useful but many current academics, policymakers, and researchers in the private sector are already in the process of identifying the areas where the U.S. health care system could be improved.