As for physician supply, the most cost-effective way to deliver the primary care product is thru clinics with 8 NP or PA and 2 internists. The patient will show up with either a card or bio-identity thumb drive. Swipe or plug it into a computer. A touch screen will guide them thru alogrithims. Ancillary tests will be then done based on the alorithim. The patient will finally see a provider who will estabilsh a diagnosis and use preferred meds to treat. If the condition is atypical, the patient will be referred to the physician. If the patient wants to see a physician, they will pay additional out of pocket. I suspect that many of the young without chronic medical conditions have little interest in establishing a doctor-physician relationship – just treat the acute problem.

The modern American health-care system has its roots in World War II. As part of the war effort the U.S. government imposed wage and price controls on its citizens. It was illegal for American employers to compete for scarce employees by offering them better salaries, so employers came up with a new concept—we now call it the ‘benefit.’ One such benefit was health insurance.

This was cemented by government policy allowing employer-provided health care to be paid for with pretax dollars, while individual health care purchases were paid for with post-tax dollars, creating a huge marginal incentive to demand that employers provide insurance rather than consumers purchasing it themselves.

Restraint of interstate policy sales and licensure-based barriers to entry in medical fields only exacerbated the resultant rising costs. As Roderick Long summarizes here, health care used to be inexpensive and widely available until the government stepped up its interventionist policies:

At the turn of the century, the average cost of “lodge practice” to an individual member was between one and two dollars a year. A day’s wage would pay for a year’s worth of medical care. By contrast, the average cost of medical service on the regular market was between one and two dollars per visit. Yet licensed physicians, particularly those who did not come from “big name” medical schools, competed vigorously for lodge contracts, perhaps because of the security they offered; and this competition continued to keep costs low.

The response of the medical establishment, both in America and in Britain, was one of outrage; the institution of lodge practice was denounced in harsh language and apocalyptic tones. Such low fees, many doctors charged, were bankrupting the medical profession. Moreover, many saw it as a blow to the dignity of the profession that trained physicians should be eagerly bidding for the chance to serve as the hirelings of lower-class tradesmen. It was particularly detestable that such uneducated and socially inferior people should be permitted to set fees for the physicians’ services, or to sit in judgment on professionals to determine whether their services had been satisfactory. The government, they demanded, must do something.

And so it did. In Britain, the state put an end to the “evil” of lodge practice by bringing health care under political control. Physicians’ fees would now be determined by panels of trained professionals (i.e., the physicians themselves) rather than by ignorant patients. State-financed medical care edged out lodge practice; those who were being forced to pay taxes for “free” health care whether they wanted it or not had little incentive to pay extra for health care through the fraternal societies, rather than using the government care they had already paid for.

In America, it took longer for the nation’s health care system to be socialized, so the medical establishment had to achieve its ends more indirectly; but the essential result was the same. Medical societies like the AMA imposed sanctions on doctors who dared to sign lodge practice contracts. This might have been less effective if such medical societies had not had access to government power; but in fact, thanks to governmental grants of privilege, they controlled the medical licensure procedure, thus ensuring that those in their disfavor would be denied the right to practice medicine.

Such licensure laws also offered the medical establishment a less overt way of combating lodge practice. It was during this period that the AMA made the requirements for medical licensure far more strict than they had previously been. Their reason, they claimed, was to raise the quality of medical care. But the result was that the number of physicians fell, competition dwindled, and medical fees rose; the vast pool of physicians bidding for lodge practice contracts had been abolished. As with any market good, artifical restrictions on supply created higher prices — a particular hardship for the working-class members of fraternal societies.

Historian David T. Beito delves into this history in exhaustive detail in his excellent book From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890–1967 — a former Show-Me Institute book club selection. In fact, I think I gave you a copy several months ago.

Doctor shortages are a big problem, but those shortages are artificial, a symptom of longstanding and ongoing government intervention in health care markets. Legislators won’t be able to provide solutions that fix this problem short of repealing the regulatory measures that led to the problem in the first place.