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Department of Uh-Oh
Or should this post be called "Markets in Everything"?
...there is plenty of anecdotal evidence that Germany has become less attractive for people in fields like medicine, academic research and engineering. Those who leave cite chronic unemployment, a rigid labor market, stifling bureaucracy, high taxes and the plodding economy — which, though better recently, still lags behind that of the United States.
Here is the full story, which is an object lesson in what happens if you don't pay your doctors enough...
Posted by Tyler Cowen on February 7, 2007 at 12:02 PM in Medicine | Permalink
Comments
Anecdotally, the preferred destination for German emigres is presently Sweden.
Posted by: Cyrus at Feb 7, 2007 3:29:28 PM
i haven't read the full story but the subject of doctor's salaries reminds me of milton friedman. he stated that licensing requirements that limited the supply of doctors, especially by eliminating competition from immigrant doctors, kept doctor salaries and medical expenses higher than necessary.
by the same token, price and wage controls, a rigid labor market, stifling bureaucracy and high taxes are bad for a nation's economy and consumers.
Posted by: choe at Feb 7, 2007 3:47:51 PM
The primary subject of the article (the engineer) mentioned that his dealings with his unionized employees pushed him to leave Germany for Canada. Meanwhile, the last time I visited Canada, the owner of the inn I stayed at in Montreal told me she shuttered her own mechanical engineering firm because the unions were threatening her employees with violence if they didn't unionize. If that guy really wanted a change of pace he should move to a nice Right-to-Work state in the US, like Virginia!
Posted by: Christina at Feb 7, 2007 4:00:03 PM
Probably couldn't get in, Christina.
For some reason, Saudi students are more important.
Posted by: Sandy P at Feb 7, 2007 4:03:15 PM
Canada has an immigration system that was reformed in the early 90s to massive emphasize educational achievements. I hear that it's actually causing complaints that they aren't getting enough skilled trade workers, and that it has the downside of attracting lots of people who technically have advanced degrees, but from very poor Third World universities, degrees not worth the paper that they're printed on. But so it goes.
The US has an enormous number of applicants every year, so we basically have a lottery system, together with the employer sponsorship and student visa stuff.
Posted by: John Thacker at Feb 7, 2007 6:18:04 PM
The Milton Friedman comment about licensing limiting immigrant physicians is not applicable in the US, where we employ huge numbers of immigrant physicians. Expect this trend to change though as emerging economies will be able to retain most of their medical talent. Reduced supply of immigrant physicians, not licensing, will drive prices up in the US.
That said... how many people really favor having no qualifications for medical personnel?
Posted by: a clarification at Feb 7, 2007 6:29:10 PM
Physicians cannot really set their own prices except for elective procedures. Physicians are limited by what the Center for Medicare/Medicaid Services reimburses for them. Physicians make more money by learning how to manipulate the the diagnosis codes and ensuring that they bill for all of their services.
Virtualy all oncologisit get paid the same price for the same procedure. The best surgeon does not really get to charge more because he is better.
Posted by: superdestroyer at Feb 7, 2007 6:49:26 PM
The notion of high marginal tax rates on the highest paid workers, along with frustration with unionism ring true, and part of me is surprised there aren't more such emigrants.
But there is also the case that people really do prefer to live in their home country, there is some sort of instinctual pull, so I am also not surprised that the numbers aren't higher.
Increased emigration numbers aren't necessarily a bad sign, although it may well be. I fully expect that over the years that the more developed countries in the EU swap workers to a greater degree much the same way people in the US switch states on a frequent basis. There are language issues in the EU of course, so don't be surprised if countries like the UK and Ireland get more than their "fair share" of immigration from within the EU with their English, and with more business friendly environments bringing in more workers following new job creation. The UK government of course also has a quite friendly tax policy for rich foreigners.
Posted by: happyjuggler0 at Feb 7, 2007 10:28:36 PM
If I want to buy a stock or mutual fund, I can call up my old friend the ob-gyn. I know three anesthesiologists who became financial analysts with investment firms. Two radiologists run imaging businesses, and a good orthopedist friend dropped out to put up magnetic resonance imaging (MRI) facilities. Each trained hard for at least nine years to join his field of medicine. In no case could leaving have been an easy divorce.So here is the cause of your doctor's pain in 2007. Behind him or her is a 15-year trend of diminishing fees that shows no signs of abating. Graduating med students aren't blind; they see established physicians with busy practices dropping out. Looking ahead they see more headaches--more controls and regulations, more scrutiny, more liability, less money. So what has the resourceful American doc done?
From TIME.
Posted by: bob montgomery at Feb 8, 2007 11:51:50 AM
Permit me to quote from the article, "The trigger for this latest bout of angst was the release last fall of new government statistics showing that 144,800 Germans emigrated in 2005, up from 109,500 in 2001. At the same time, only 128,100 Germans returned, a decline of nearly 50,000 from the year before. That made it the first year in nearly four decades that more people left than came home."
So, for the first time in 40 YEARS, there are more emigrants than immigrants, and by 16,700 people, and we're supposed to believe that there's a problem or some kind of lesson to be learned? I guess that's why you gotta read the link...
Posted by: gab at Feb 8, 2007 4:53:04 PM
Bob,
Doctors in the US have less market power than they used to have, when they were self-employed professionals. Much of that power has transferred to the hospital chains and HMOs that now employ them, and as superdestroyer observes, to Medicare. It's no surprise that they're no longer as affluent in comparison to the rest of society as they used to be.
I think they should unionize to demand better pay, better working conditions and more autonomy. If we go to single-payer (which seems unlikely), unionization would be certain. I'm not sure how unionization would affect the quality of healthcare, but at some point doctors should look out for themselves, without changing careers. Heaven knows teachers' unions do. The other option would be to copy the ADA and limit medical school enrollment, but I'm not sure if they could get away with that.
Posted by: Jess Austin at Feb 8, 2007 11:25:08 PM
"Canada tries to stop medical brain drain"
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Posted by: 謝文豪 at Apr 1, 2008 10:22:18 PM
Posted by: at Oct 22, 2008 10:06:38 PM
