Shortages in Healthcare: Why? How Do We Fix Them?

Why Are There Shortages in Healthcare and How Do We Fix Them?

There will be a shortage of 21,000 - 55,000 primary care physicians by 2033. Additionally, there are 195,000 vacancies for nursing positions in America every year because of the nursing shortage.

Shortages in healthcare are determined by the Law of Supply and Demand. In a normal market situation, supply and demand reach an equilibrium price and an equilibrium quantity. As a result, there is NO Shortage.

However, if the price is set artificially low, then not enough will be supplied relative to demand and there will be a shortage.

In the case of labor, the 'price' of labor is the wage. The 'quantity of labor' is the number of people and the number of hours worked in that profession.

If there is a shortage, by definition there must be Rationing. Rationing comes in two forms:
1) Queue Rationing, i.e. a 'Waiting List'
2) Price Rationing, i.e. rationing based on ability to pay

Healthcare has both forms of rationing, ranging from trauma surgery weekend coverage (Queue Rationing) to Lasik eye surgery (Price Rationing).

Both forms have their Pros and Cons, which can be debated forever. The point is not which is 'better' or 'worse,' but rather that shortages in healthcare are 1) explainable, 2) have straightforward consequences and 3) can be addressed differently in different situations by different groups of people.

There is no 'One Solution' and that's ok.

Sources:

AHealthcareZ is 400+ Healthcare Finance Educational Videos.

AHealthcareZ Viewers Include: Employee Benefits Professionals, HR, CFOs, Insurance Brokers, Benefits Consultants, Doctors and Nurses in Leadership Roles, Hospital and Health System Administrators, Health Insurance Carrier and PBM Professionals, Pharma and Med Device Professionals, Academic Professors and Students in Healthcare Administration and Public Health.

90,000+ Views Per Month Across All Platforms.

Visit AHealthcareZ.com to Subscribe to the Healthcare Finance Video Newsletter.

[tannermurphree]

I am an RN who returned to my former career after year in the hospital. There’s a shortage because the job sucks, endless meetings and anxiety over pleasing the regulators.

[silviagarcia]

Apply the same laws to dentistry--there is no shortage of dentistry, why? they're all cash pay and you can get a tooth issue basically whenever you want. Dental insurance is extremely limited and costly and a business for the insurance company to lure the patient by covering some basics but not the complex. If primary care stopped accepting third party payment en masse, we'd see a stabilization of pay and supply, more doctors would choose this field because it would be an attractive lifestyle. Right now it is atrocious pay, abuse from employers and patients, and very limited concierge practices. So noboy is rushing into family practice or internal med, sadly. They want dermatology and ophthalmology.

[carlwattjr]

Limited spaces in med school by ama. Limited salary of nurses by hospitals

[komilakarimova]

I just started watching your videos and honestly impressed! You deliver information in a simple way and with a high quality! It's very rare today to find a person with this unique ability. Appreciate your work a lot!

[haddadda]

They should open more med school spots

[mdaverde]

Great video, surprised you didn't talk about the reduced doctor headcount due to residency funding

[DeWayneTooson]

Same thing is happening with public school teachers

[shanap]

There are a lot of Uber-like nurse staffing companies that are cropping up. I would like to hear more about this.

[brianree]

Thank you for creating these videos. You breakdown the information so its easy to understand!

[danieldeneve]

The physician supply is also restricted annually by government sponsored residency.

[claashorst]

Tip Top! Shared in the discussion in Germany and Switzerland via Linkedin & FB. Thank you very much.

[TraderZeta]

Great video. You have great presence. I am very fascinated on your thoughts on how the university system could have some impact on the situation.

[SpecialK]

From Artificial Pricing to Artificial Care => Robo-doc in-a-box here we come. Would be great to hear you speak about the various business venture opportunities being forged as a result of the shortages.

[briansweeney]

Of course some practitioners can afford to buy their own equipment (eg a LASIK machine) and be somewhat ‘affordable’- however more complex areas - eg neurosurgery, transplant surgery, dialysis- require more equipment, theatres, ICU beds, nurses, therapists - which individual specialists could not provide or bill for…

[otiliapopescu]

That's a great video, thank you, I observed you only depict facts, but why not solutions on them?

[AggresivelyBenign]

I don’t understand something. How are the US Healthcare costs set artificially low? I understand England and Canada, but aren’t prices in the US negotiated?

Or is it that the payers have the negotiating power, so they are setting the prices to their benefit so that the end result is reduced pay for hospitals and providers?

[komilakarimova]

So to have enough nurses and primary care physicians should their wages be increased? Why do you think it never be solved?

[BurqueMD]

Have you thought about writing a book? I have found your videos so helpful!

[NANA-ndkq]

Will you discuss Singapore model of care provision?
Hybrid of government-subsidized catastrophic care and self-pay using tax-advantaged HSAs.

[iMeta]

Health economics, I did not expect to see you so soon since that one class. This cannot be helped. 🤣 And I meant the topic, not shortages. Thank you US. 😒