An image portraying the projected physician shortage in the United States.
Image Credit: https://uofuhealth.utah.edu/notes/postings/2013/01/013013physicianshortage.php#.X5Ca2UJKjPY
By Tim Jenis, JHBL Staff Member
The word “Cartel” is associated with numerous negative concepts. It is most commonly associated with the illegal drug trade, and a quick google search of the word will show problems with this thinking. The first of many results for this search show drug trafficking-related content. Drug trafficking cartels, such as the Sinaloa Cartel, are merely examples of cartels. The definition of the word cartel is much broader than the general perception of the word. According to Merriam-Webster, a cartel is defined as “a combination of independent commercial or industrial enterprises designed to limit competition or fix prices.” Cartels are a more common concept than people think and affect the United States in ways more than just the illegal trade of drugs.
What if I told you that medical physician associations, such as the American Medical Association behaved like cartels? What if I told you that because of their concerted action, there is a shortage of doctors in our country, despite the common perception that the United States is the wealthiest nation in the world. Why is it that a country as powerful and well off as the United States has fewer doctors available for its people than many smaller nations? According to a study done by Peterson-KFF, Americans spend more money than any other country on healthcare but have fewer practicing physicians per 1000 citizens than 12 different nations. The United States also boasts the highest average salary for physicians due to the lower density.
The purpose of antitrust policy is to determine whether a restraint serves to either promote or hinder competition. Typically, the Sherman Act only applies to commercial activities that are for profit. This does not bar the American Medical Association from antitrust liability just because it is not a for profit entity. What these associations are doing are not per se illegal via the Sherman Act but should be analyzed under the more flexible rule of reason for antitrust analysis. When making a rule of reason analysis, the nature, scope, and likely effect of the restraint should be considered when determining the legality of the restraint. The nature, scope, and effect of antitrust cases should weigh pro-competitive aspects of the restraint with the anti-competitive aspects under the rule of reason, with the side that has the more compelling argument determining the legality of the restraint.
A big part of the physician shortage is the increasing difficulty of acceptance into medical school. As time progresses, medical school has become increasingly difficult to get into. GPA requirements have skyrocketed in the face of increasing numbers of “weed-out” classes for pre-med students. According to a Princeton Review study, the average undergraduate GPA of all admitted medical school applicants is a 3.71. Who sets these high requirements? The American Medical Association, in connection with other medical associations. On top of this, applicants must take and obtain a high score on the MCAT, one of, if not the single hardest, entrance exam for graduate schools. If a candidate does get into medical school, now they are tasked with four years of grueling classes, four more years of residency, and an additional internship or fellowship before becoming a practicing physician. Medical school graduates are also commonly plagued with immense student loan debt. The time between acceptance into medical school and seeing your first patient as a practicing physician is commonly over a decade. This is the nature of the restraint employed by these associations. This is the restraint that should be subject to the rule of reason antitrust analysis. The restraint on medical school admission prevents many good candidates from pursuing this field of profession, thus limiting the number of practicing physicians there are available to the public.
Even though medical school application numbers have risen dramatically, the effect of this restraint is the fact that there is still a shortage of doctors in many areas in the United States. When there are fewer doctors, the current doctors are paid more. This is simple economics. When supply is low, demand rises. The American Medical Association seems to be gatekeeping medical school and keeping the salary of physicians up. This is a common theme used in cartels and is present here among the medical associations in charge of the medical school admission process. If there are fewer doctors in the country, competition among the existing doctors drops, harming society by keeping medical bills costly and access to doctors limited.
As for the scope of this restraint, the associations control the medical school process and have their hands in every cog of the “medical machine” for the entire country. The associations control the process by working together to set these lofty requirements for prospective doctors applying to every medical school in the United States. Each and every applicant across the country has to essentially defeat the associations’ incredibly difficult challenges, which are set to allegedly keep the existing physicians’ salaries up. Clearly, the scope of this restraint is massive.
Like any antitrust analysis, there are two sides to the case. The anti-competitive nature of the restraint must be weighed against the aspects that are pro-competitive. There are, in fact, benefits to this restraint. If the requirements to become a doctor are incredibly high, only the best and most qualified people will become practicing physicians; thus, promoting competition, not hindering it. As to the restraint’s effects, it can be argued that these medical school requirements have improved the quality of students they are producing. It is important to have the best and the brightest working in these high-stakes roles, and in essence, that is what these restrictions are doing. The people who are most dedicated, skilled, and have the ability to help the most people are the ones who are becoming doctors, which, according to the American Medical Association, is the purpose of the high requirements. The nature and scope of the restraint on medical school admissions cannot be refuted. The associations clearly restrict thousands of worthy applicants from medical schools all over the nation by these lofty requirements and costs of admittance. However, it can certainly be argued that the associations’ purpose for these restraints was not to destroy competition but to simply put only the best, most qualified people in positions to succeed.
So yes, these medical associations are cartel-like. They do seemingly behave in a concerted manner in order to possibly harm competition among physicians. Like any true antitrust problem, there are clear pros and cons to each side. The associations could drop the requirements to get into med school, but maybe doing this would decrease the quality of doctors in the country. They could decrease the cost of med school, but maybe this would decrease the ability for med students to receive adequate training. There is no exact solution to this problem. This is just another issue plaguing the American people, especially those who live in underrepresented areas of the country without access to the same level of care available in more affluent cities.
Tim Jenis is a second-year law student at Suffolk University Law School with an interest in real estate and business law. Tim interned for Keches Law Group and is a member of Suffolk Business Law Association, and the Suffolk Law Housing Discrimination Testing Program in addition to being a staff member on the Journal of Health and Biomedical Law.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHBL or Suffolk University Law School.
Sources:
https://core.ac.uk/download/pdf/62555617.pdf
https://qz.com/1676207/the-us-is-on-the-verge-of-a-devastating-doctor-shortage/
https://www.medpagetoday.com/infectiousdisease/covid19/85661
https://www.savvypremed.com/blog/why-is-it-so-damn-hard-to-get-into-medical-school
https://www.medpagetoday.com/special-reports/exclusives/83059
https://www.healthsystemtracker.org/indicator/quality/physicians-per-capita/
https://naibuzz.com/10-countries-highest-doctors-salaries-world/