Another Look at the Shortage of Physicians.

The article presents information on studies conducted in United States concerning the shortage of physicians. One study has examined incomes of physicians relative to that of the other comparable groups in the economy. The basic assumption in this type of analysis is that if the incomes of physicians increase faster than the incomes of other comparable groups, then, the supply of physicians is not increasing as fast as the demand. Such a rise in the incomes of physicians, relative to the income of others, is taken as evidence of a shortage of physicians. Another study indicates that there is presently a shortage of physicians, but that the shortage is being decreased. This study calculates the internal rate of return on an investment in training to become a physician. In conclusion, then, is that even though the market may operate as we would expect on the basis of market theory, the equilibrium market solution to the supply of physicians is likely to be non-optimal. Although it is not clear, in a world where external effects are not unusual, that an increase in the supply of physicians would move us closer to the optimal allocation of resources, it is clear that the market supply of physicians will be non-optimal.