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> Iirc residents are a profit center for hospitals, meaning that if they really wanted to, residency slots could be self funded by the host institution without

> Iirc residents are a profit center for hospitals, meaning that if they really wanted to, residency slots could be self funded by the host institution without federal funding. That line of reasoning sounds like an attempt at obfuscation (not necessarily by you, but by the hospitals and medical profession in general). They're not. If they were a profit center, there would be more of them, unless you think that hospitals would willingly refuse to do something that's clearly profitable for them.

sjg007 9y ago
Well the alternate is capacity. They only have so many doctors on staff to supervise which limits the slots. Think of it as a management problem.
- chimeracoder 9y ago
  > Well the alternate is capacity. They only have so many doctors on staff to supervise which limits the slots. Think of it as a management problem. First: residents are doctors. Second: Yes, they ratio of residents to attendings is fixed, by law, as is the number of hours that they're allowed to work per week. Both of those were fixed because we found that working residents 100-120 hours/week and without enough attendings resulted in mistakes and people dying. Since this ratio is fixed, it means that hiring 4 more residents also means hiring an additional attending, and you only get an additional 320 resident-hours/week from them. It turns out that this isn't profitable, because if it were, more hospitals would do it.
  - sjg007 9y ago
    Yes, obviously, residents are doctors. By "doctors on staff" I meant supervising doctor. The phrase "on staff" usually means permanent staff vs the residents who are temporary.
hkmurakami 9y ago
There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. Fwiw my information is gleaned from "An American Sickness" where the Harvard MD writer claims that a resident costs something like 180k but makes the hospital 300k. If it is the case that the author has intentionally neglected to mention other factors that contribute to a resident being a cost center, I would sincerely be interested to learn about this.
- chimeracoder 9y ago
  > There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. That's not what we're talking about. What people are proposing here is literally that hospitals are eschewing short-term profit in order to increase the expenses they have to pay in the long-term (physician salaries).
- rayiner 9y ago
  > There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability. What makes you think hospitals are different?
  - chimeracoder 9y ago
    > Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability. In addition to everything you said (which is true), in this case, the hospitals and doctors have opposing incentives. I can't imagine why hospital administrators would collude to increase their expenses (ie, their employees' salaries). When Apple, Google, etc. were found to be fixing wages, they were trying to keep salaries down, not bring them up.
albedoa 9y ago
> unless you think that hospitals would willingly refuse to do something that's clearly profitable for them. The original claim you were responding to was that a doctors guild artificially limits the number of doctors available by capping the number of medical schools, the implication being that it leads to higher a demand for doctors and thus higher prices. Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them? Are you disagreeing with the OP only on who is creating the artificial demand?
- chimeracoder 9y ago
  > The original claim you were responding to was that a doctors guild artificially limits the number of doctors available by capping the number of medical schools, the implication being that it leads to higher a demand for doctors and thus higher prices. That's a pretty fundamental misunderstanding of economics, then. Capping the number of medical schools can't cause higher demand for doctors. It can restrict the supply, which means that the prices will be higher, but it doesn't affect demand at all. > Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them? Even if this premise were correct: why would hospitals refuse to do something that's profitable for them, just so that they could pay more in expenses (salaries) in the long run?
  - albedoa 9y ago
    > Even if this premise were correct: why would hospitals refuse to do something that's profitable for them, just so that they could pay more in expenses (salaries) in the long run? Because they expect revenues to outpace those expenses??
  - albedoa 9y ago
    > That's a pretty fundamental misunderstanding of economics, then. Capping the number of medical schools can't cause higher demand for doctors. It can restrict the supply, which means that the prices will be higher, but it doesn't affect demand at all. My lord, that clearly means an excess of demand over supply.

sjg007 9y ago

Well the alternate is capacity. They only have so many doctors on staff to supervise which limits the slots. Think of it as a management problem.

chimeracoder 9y ago
> Well the alternate is capacity. They only have so many doctors on staff to supervise which limits the slots. Think of it as a management problem. First: residents are doctors. Second: Yes, they ratio of residents to attendings is fixed, by law, as is the number of hours that they're allowed to work per week. Both of those were fixed because we found that working residents 100-120 hours/week and without enough attendings resulted in mistakes and people dying. Since this ratio is fixed, it means that hiring 4 more residents also means hiring an additional attending, and you only get an additional 320 resident-hours/week from them. It turns out that this isn't profitable, because if it were, more hospitals would do it.
- sjg007 9y ago
  Yes, obviously, residents are doctors. By "doctors on staff" I meant supervising doctor. The phrase "on staff" usually means permanent staff vs the residents who are temporary.

hkmurakami 9y ago

There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. Fwiw my information is gleaned from "An American Sickness" where the Harvard MD writer claims that a resident costs something like 180k but makes the hospital 300k. If it is the case that the author has intentionally neglected to mention other factors that contribute to a resident being a cost center, I would sincerely be interested to learn about this.

chimeracoder 9y ago
> There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. That's not what we're talking about. What people are proposing here is literally that hospitals are eschewing short-term profit in order to increase the expenses they have to pay in the long-term (physician salaries).
rayiner 9y ago
> There are plenty of reasons to eschew short term profitability for long term profitability and prevent flooding the market. Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability. What makes you think hospitals are different?
- chimeracoder 9y ago
  > Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability. In addition to everything you said (which is true), in this case, the hospitals and doctors have opposing incentives. I can't imagine why hospital administrators would collude to increase their expenses (ie, their employees' salaries). When Apple, Google, etc. were found to be fixing wages, they were trying to keep salaries down, not bring them up.

albedoa 9y ago

> unless you think that hospitals would willingly refuse to do something that's clearly profitable for them. The original claim you were responding to was that a doctors guild artificially limits the number of doctors available by capping the number of medical schools, the implication being that it leads to higher a demand for doctors and thus higher prices. Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them? Are you disagreeing with the OP only on who is creating the artificial demand?

chimeracoder 9y ago
> The original claim you were responding to was that a doctors guild artificially limits the number of doctors available by capping the number of medical schools, the implication being that it leads to higher a demand for doctors and thus higher prices. That's a pretty fundamental misunderstanding of economics, then. Capping the number of medical schools can't cause higher demand for doctors. It can restrict the supply, which means that the prices will be higher, but it doesn't affect demand at all. > Granted that it's a lack of residencies and not medical schools that creates the demand, is creating artificial demand not a reason why hospitals might willingly refuse to do something that's clearly profitable for them? Even if this premise were correct: why would hospitals refuse to do something that's profitable for them, just so that they could pay more in expenses (salaries) in the long run?
- albedoa 9y ago
  > Even if this premise were correct: why would hospitals refuse to do something that's profitable for them, just so that they could pay more in expenses (salaries) in the long run? Because they expect revenues to outpace those expenses??
- albedoa 9y ago
  > That's a pretty fundamental misunderstanding of economics, then. Capping the number of medical schools can't cause higher demand for doctors. It can restrict the supply, which means that the prices will be higher, but it doesn't affect demand at all. My lord, that clearly means an excess of demand over supply.