My co-blogger Garett Jones posted this week on the supply of doctors, suggesting a new way of thinking about them. He used the idea of opportunity cost: if potential doctors face a high opportunity cost because of lucrative opportunities in the business world, then we won't get many new doctors.
Garett granted that doctors have succeeded in getting the government to restrict their supply but he seems to favor his new explanation.
Here's why I don't, and in laying this out, I'm making a point that his commenter, Mark V. Anderson, made.
There is a huge latent supply of people willing to be doctors. I know a number of them myself. One young man I know wants so badly to be a doctor that he took a year off to study for the MCATs. For every person admitted to medical school, there are many who are not. Presumably many of them could be good doctors. Some casual evidence: this young man was studying for his MCATs at our kitchen table and I started looking through the material he was studying: the physics of the spring, mechanical advantage, etc., things that I'm sure would come in very handy when he's trying to do a surgery. Other casual evidence: Navy officers I've taught at the Naval Postgraduate School who were enlistees in the Navy Medical Corps because they didn't cut grasp enough math or chemistry to get into medical school. One of them told me how he had once delivered a baby in Alaska with a flashlight in his mouth. [The enlistee's mouth, not the baby's.]
So why aren't these people, and many like them, doctors? Because of the aforementioned restriction of supply. Raise the opportunity cost of doctors and you won't get fewer doctors: you'll just get a shorter queue trying to get into med schools. Lower the opportunity cost of doctors and you won't get more doctors: you'll just get a longer queue trying to get into med schools.
Note: Commenter MingoV writes that the constraint is not due to the AMA restricting supply but is, instead, due to the limited federal funding of slots in medical schools. Even if that's true, that doesn't undercut my case that the binding constraint is slots in medical schools. Instead, MingoV is addressing why there's a binding constraint. But we don't need to take as given that the only way to become a doctor is to go to medical school. We're just used to that way because that's how it has been legislated for close to a century. One can certainly imagine motivated potential doctors learning to be doctors by apprenticing to existing doctors for a few years. That would expand supply without increased federal funding.
Coda: The binding constraint is the restriction on slots in medical schools.
Postscript: I'm not making fun of Garett's style by using his "Coda." Imitation, in this case, is flattery.