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Comment by 74948494i4 | Hacker News Reader

Apparently most hospitals make low margins. If this is true, and the goal is to make healthcare more affordable, something has to give, no?

https://www.kff.org/health-costs/key-facts-about-hospitals/?...

It is also unclear how this is any different than traveling nurses which operate similarly.

What is the solution that doesn’t result in at least some large group of people making less money?

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Among the things that need to give are 1) insurance companies should make no money because there's no margin left in the system for them, and 2) we should have several times as many doctors, which means breaking the protection racket that intentionally limits the supply.

What is the protection racket that intentionally limits supply? The primary bottleneck to producing more physicians is lack of available residency slots. Teaching hospitals are free to add more but for various reasons choose not to. In part I think they're waiting and hoping that Congress will kick in more subsidies through the Medicare program.

https://savegme.org/

Even if financial constraints were removed, the notion that we could produce twice as many physicians is ludicrous. There simply aren't enough attendings able to supervise a lot more residents, nor are there enough patient cases coming through the teaching hospitals to give that many residents the practical training they would need.

> What is the protection racket that intentionally limits supply?

It's the AMA.

"Free to add more" is hiding a LOT of important nuts and bolts of the guild system that discourages new entrants.

Nonsense. The AMA doesn't limit the number of residency slots. Did you even read through the website I linked above?

The website you linked above is quite literally rent-seeking for government funds to fund the residency requirements defined by the AMA.

Can you imagine if that website were for programmers?

"Waaaah we need more Staff Engineers at OpenAI but we just can't afford training them due to Congress not doling out enough for it, boo hoo".

Residency requirements are defined by ACGME. The AMA is a member of ACGME but ACGME operates independently. If you think that residency requirements should be changed then make a specific proposal instead of wasting our time with snarky, low-effort comments.

https://www.acgme.org/

State medical boards are the entities which ultimately decide on physician licensing criteria.

The physician protection racket case is put forward by Nobel Prize in Economics laureate Angus Deaton and his wife Princeton economist Anne Case in their 2020 book Deaths of Despair and the Future of Capitalism: https://press.princeton.edu/books/hardcover/9780691190785/de...

This AMA/ACGME protection theory is covered by Yascha Mounk at https://www.persuasion.community/p/deaton and elsewhere.

Discussion of physician protectionism is also found in the 2017 book by John Hopkins political science professor Steven Teles and Niskanen Center vice president Brink Lindsey The Captured Economy: https://global.oup.com/academic/product/the-captured-economy...

The New York Times covered the AMA's lobbying in this 1986 article: https://www.nytimes.com/1986/06/14/us/ama-board-studies-ways...

There's also the 1970 article by University of Chicago economics professor Reuben A. Kessel, The A.M.A. and the Supply of Physicians: https://scholarship.law.duke.edu/lcp/vol35/iss2/4/

Did you even read through the website I linked above? Your references are badly outdated. While the AMA once lobbied Congress to limit Medicare funding for residency slots they reversed position years ago. And even back then, there was nothing stopping teaching hospitals from expanding residency programs using their own funds or other sources.

There are valid reasons to criticize the AMA but blocking the training of new physicians isn't one of them.

You're citing an AMA public relations campaign to retain public funding of residencies but I'm not sure anyone here is arguing that it should be cut. The AMA made public statements holding the same position about increasing funding and removing the 1997 residency caps in 2006. And yet notable academics since 2006 still have suggested (eg, the books in 2017 and 2020) that the profession, ie the membership of the AMA, presumably even with this formal position taken by their association body, is behaving in a protectionist manner. Either way, part of the argument is that physicians' documented earlier collective behavior (old boys club), suspected ongoing culture, and inherent economic interests, are still causing present and future problems.

Even if that was all true, so what? Congress is free to increase the Medicare budget for residency programs if that's what voters want. And teaching hospitals are free to expand their own residency programs regardless of whether Congress acts.

The AMA, and physicians in general, are obviously not the primary obstacle here. Complaining about their past actions won't solve any of the actual problems we have today

"So what?" The shortsighted protectionism in 1910 and 1997 put them into the eyes of political scientists and ideologues and, before AI, there was talk of addressing the shortage using graduates of foreign schools and scope increases for mid-level providers: https://www.politico.com/agenda/story/2017/10/25/doctors-sal... Now, if something radical doesn't change, the shortage will probably primarily be addressed by increased private equity corporatization of medicine and AI-assisted diagnosis (made politically possibly by the retaining of concierge practices for the wealthy). This started with someone saying "we should have several times as many doctors" and, whether those are US trained or foreign (NHS trained?), the likely result is physician wages and power will fall. America was kind of designed to be controlled by the professional class, rather than landed aristocrats, so this will contribute to the ongoing reshaping of the country.

#1 seems like a feature, not a bug. The real problem is that health insurers in their current form exist at all.

Germany has non-profit sickness funds (Bismarck model). So you don’t have to ban health insurance companies when rolling out universal healthcare. Their freewheeling excesses have to be reined in. Access is a right. Standardize coverage and prices on both the insurer and hospital/doctor ends. Once everyone is in the same risk pool, there will no longer be a perverse incentive to deny claims for profit. A single standard plan will also have the negotiation power to drive down prices.

We are saying the same thing: I was stating what the desirable state would be.

A much larger supply of doctors would presumably lower their pay significantly, right? Will people still want to put in the years and years of training to become a doctor if the pay drops significantly?

The planet pays doctors much less than the USA does. They still have doctors.

The USA doesn't recognize those other doctors (in more ways than 1 apparently) and that is an aspect of the issue.

Given the NHS(and many other western countries) still has a surplus of med student to training places with much worse compensation than the US, the answer is yes.

Prestige and potential higher pay for specialisations will still attract people to the profession, although maybe not if the university costs for medicine remain as high as they currently are.

Insurance companies absolutely need profit. The basic argument is simple - insurer's capital moves like a random walk and if premiums equal claims (i.e., zero drift), that eventually falls below any starting level. In practice, that means that a failure gets socialized (e.g., state guaranty funds assess levies on the remaining, solvent insurance companies, which ultimately pass those costs down to consumers through higher premiums)

What we need is competitive markets, what we get is heavy intervention. For example, https://en.wikipedia.org/wiki/Certificate_of_need system means that to build a new hospital one needs to go to their direct competitors to ask for their permission. Imagine if to open a pastry shop you needed a permission from every other pastry shop in the city - bonkers.

Most hospitals (both for-profit and non-profit) are terribly inefficient. They burn up clinician time on administrative tasks that could be automated or performed by cheaper office staff or not done at all. And employees often waste a lot of time just waiting around because no one has optimized workflows to shorten queues or eliminate bottlenecks. The incentives are structured in a such a way that there's often little reason to improve.

Most software development shops (both for-profit and non-profit) are terribly inefficient. They burn up programmer time on administrative tasks that could be automated or performed by cheaper office staff or not done at all. And employees often waste a lot of time just waiting around because no one has optimized workflows to shorten queues or eliminate bottlenecks. The incentives are structured in such a way that there's often little reason to improve.

Ha ha, but it's a matter of degree. Every organization has some level of inefficiency but having seen how the sausage is made I can guarantee you that the average software development shop in a US tech company is significantly more efficient than the average hospital. It's not something that you can quantify in a directly comparable way but anyone familiar with the industry will tell you the same.

I made a lot of sausage, including for US companies. My personal preference is smoked, not dried.

This is certainly true. With modern AI agents, it is entirely possible that the duty cycle of a software engineering enterprise is not actually the 8h/24h we have today but closer to a 24h/24h system. Certainly my ideal is to proceed software engineering organizations closer to the latter system.

I manage a team of devs in the healthcare industry, I've worked in other regulated industries and healthcare is unique. I could go on forever but it comes down to the fact that healthcare is uniquely risk averse, for understandable reasons.

Risk tolerance is an orthogonal issue. The point I raised is about operational inefficiency which has no impact on risk (in terms of legal compliance or patient safety) one way or the other.

It’s a complex problem because a lot of those hospitals are non profit, so they have zero incentives to have high margins because no shareholders to return money to. Higher salaries for executives though…

It's REALLY important to understand that non profits have just as much incentive to maximize their income as for profits.

They have no stock holders to pay, but the people running them will pay themselves multi million dollar wages if they can!

It’s important to note that in most countries the law even states that they need to pay competitive salaries for these positions, so they can’t even pay them much lower amounts than their non profit counterparts

That's not entirely true and a misstatement of how these work, take Blue Cross of Michigan. It is a nonprofit, it's board is controlled by the members, essentially they are the share holders, they have a interest in lower prices and an efficient operation.

How the board gets approved to be elected is a bit self selected, but in theory it should be controlled by people that have incentives, the same as a public corporation.

Now this is an insurance company and not a provider network,some provider networks are more self owned.

check the admin headcount vs healthcare worker last time I looked up admin grew exponentially

Traveling nurses make more than lots of doctors though, so I dont think they're being taken advantage of. However, Im sure this company is trying to take a piece of that traveling nurse pie.

The exact profit margins of hospitals as a whole doesn't matter. Hospitals are where health care happens but financially, they are simply a platform for a multitude of other private entities which make profits on top of the simple hospital fees - the "Uber For Nurses" thing is just one of many ways this happens, you have everything from data management companies to separately own MRI machines adding to the patient's bill and having a voice in the management of the hospital.

Yeah, maybe it's the idea that hospitals should make profit that should give?

Like, sorry, but not being from the US the whole idea of a "margin" when running a hospital is insane. Hospitals are paid from our ample taxes and the patient pays nothing - there is no room for profit there, not should there be one.

How much does your country’s medical professionals make, how long do patients wait for care and what is the level of care as measured by variety and efficacy? Seems hard to compare without normalizing these things.

>How much does your country’s medical professionals make

Let's assume UK. Less. US physicians earn about twice what their UK peers do, US RNs about 1.5x https://www.commonwealthfund.org/publications/issue-briefs/2...

>how long do patients wait for care

About the same or longer, in general UK consumes less healthcare per person, but...

>what is the level of care

Better outcomes in the UK https://www.pgpf.org/article/how-does-the-us-healthcare-syst... and longer UK life expectancy https://www.oecd.org/en/publications/2025/11/health-at-a-gla... (and of course US has higher levels of chronic illness https://www.healthsystemtracker.org/chart-collection/how-has...

All for far less (share of GDP) than US https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS?locat...

Trying to compare national healthcare systems based on life expectancy is a total non sequitur. Most of the factors which limit US life expectancy relative to other developed countries have little or nothing to do with healthcare (or lack thereof). It's mainly other problems like car crashes, suicide, violence, substance abuse, and sedentary lifestyles.

mhm

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