US Physicians: Supply Shortages and how they Impact Salary
by lauberja on 2007-09-23
In an economic context, healthcare consumption is no different from other consumer services. Where there is a demand, the market will attempt to meet it through supply. Where supply outweighs demand, prices may fall as the market becomes competitive and vice versa in reverse circumstances. With physicians and the provision of healthcare services, supply and demand do not fluctuate with price as much as other services.
This is for a number of reasons. The main one being that demand for healthcare comes more as a necessity so demand cannot increase and likewise cannot decrease for the same reasons. However; on a different level, the relationships between health care service providers and medical professionals can indeed be impacted by pricing especially in a global marketplace.
Many foreign countries, such as the UK, provide healthcare through the state and also have legislation in place which means that private medical care can only be provided by Physicians that are working out of hours. This makes private healthcare more of a luxury than a necessity and places salaries firmly in the hands of the UK government - a similar structure is also implemented in France. As a result, salaries are only used as an incentive to induce young academics to enter the profession rather than being a bi-product of any consumer-side market forces.
The salary of medical professionals in the US is similar to the UK and France and will act as a factor as young students choose their career path. When students go onto choose a medical subject, the market as a whole becomes far less relevant and healthcare providers are left in a position where they must compete to secure the services of physicians. On the other hand, during times of higher amounts of available physicians the tables will turn and prices will become lower for service providers as hiring staff becomes less competitive.
At this point in time, the break-down in international trade between service providers and physicians has had a profound effect and a much expected one at that. Although healthcare consumers are left in a position where by they may not migrate as easily between providers, actual healthcare professionals may do so with relative ease. This has created a situation where by a shortage of supply causes foreign doctors to migrate and for foreign healthcare service providers to raise their prices in an attempt to keep their talent. According to years of authoritative economic theory, this should indeed result in a shift towards international equilibrium where by all service providers will move towards a middle ground in pricing. Despite this, the higher levels of demand for nationals will always play a role in the formation of the market that is formed.
This is for a number of reasons. The main one being that demand for healthcare comes more as a necessity so demand cannot increase and likewise cannot decrease for the same reasons. However; on a different level, the relationships between health care service providers and medical professionals can indeed be impacted by pricing especially in a global marketplace.
Many foreign countries, such as the UK, provide healthcare through the state and also have legislation in place which means that private medical care can only be provided by Physicians that are working out of hours. This makes private healthcare more of a luxury than a necessity and places salaries firmly in the hands of the UK government - a similar structure is also implemented in France. As a result, salaries are only used as an incentive to induce young academics to enter the profession rather than being a bi-product of any consumer-side market forces.
The salary of medical professionals in the US is similar to the UK and France and will act as a factor as young students choose their career path. When students go onto choose a medical subject, the market as a whole becomes far less relevant and healthcare providers are left in a position where they must compete to secure the services of physicians. On the other hand, during times of higher amounts of available physicians the tables will turn and prices will become lower for service providers as hiring staff becomes less competitive.
At this point in time, the break-down in international trade between service providers and physicians has had a profound effect and a much expected one at that. Although healthcare consumers are left in a position where by they may not migrate as easily between providers, actual healthcare professionals may do so with relative ease. This has created a situation where by a shortage of supply causes foreign doctors to migrate and for foreign healthcare service providers to raise their prices in an attempt to keep their talent. According to years of authoritative economic theory, this should indeed result in a shift towards international equilibrium where by all service providers will move towards a middle ground in pricing. Despite this, the higher levels of demand for nationals will always play a role in the formation of the market that is formed.
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