The supply of specialists

Monday's column hit on regulatory barriers to entry in medicine that really look like cartel-enforcement mechanisms. Westpac had this note in 2016:

Industry sources had several concerns about competition or the lack thereof in provision of healthcare and social support services, and about differing standards set for public and privately contracted providers of these services. 

One of the chief concerns was the cost of specialist care in New Zealand relative to many other countries, and the incentives specialists had to work in private healthcare rather than public healthcare, which exacerbated the problem. Some laid the blame at the door of the specialist colleges, which set the standards required before a specialist could practice in New Zealand. 

While acknowledging the importance of ensuring standards were sufficient to keep patients safe, there was concern that colleges acted as gatekeepers to limit the supply of specialists in New Zealand. This all but guaranteed that those who made it through the process earned high salaries. This monopolistic supply (increasingly requiring a fellowship on top of other qualifications) was having such an effect that some thought New Zealand now had an oversupply of GPs. Many people went part way toward becoming specialist before dropping out because the requirements had just become too restrictive, even though they were capable of practising at specialist level. There were immediate impacts on public healthcare provision due to cost pressures and time delays, yet the DHBs we spoke to appeared to believe there was no way around this hurdle.

HT: David Norman