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Chapter 1: Problem 11

To receive a medical license in the United States, a doctor must complete a residency program at a hospital. Hospitals are not free to expand their residency programs in a particular medical specialty without approval from a residency review committee \((\mathrm{RRC})\), which is made up of physicians in that specialty. A hospital that does not abide by the rulings of the RRC runs the risk of losing its accreditation from the Accreditation Council for Graduate Medical Fducation (ACGMF). The RRCs and ACGMF. argue that this system ensures that residency programs do not expand to the point where they are not providing residents with high-quality training. a. How does this system help protect consumers? b. Is it possible that this system protects the financial interests of doctors more than the well-being of consumers? Briefly explain. c. Discuss whether you consider this system to be good or bad. Is your conclusion an example of normative economics or of positive economics? Briefly explain.

Short Answer

Expert verified
a. This system protects consumers by ensuring that medical service quality is maintained. b. Yes, this system can protect the financial interests of doctors. This is done by limiting the number of specialists in a field, potentially leading to higher wages for these specialists. c. This is seen as normative economics. Whether this system is good or bad depends on perspective: it's beneficial for consumers who receive high-quality services, but can be restrictive for potential doctors.

Step by step solution

01

Understanding Consumer Protection

The system can protect consumers by ensuring the quality of medical services. The approval and regulation process by the Residency Review Committee (RRC) and the Accreditation Council for Graduate Medical Education (ACGME) prevents hospitals from enlarging their residency programs without considering the impact on the quality of medical training. This ensures that the released doctors are well-trained and can provide high-quality medical services, hence, protecting consumers from substandard medical practitioners.
02

Evaluating Financial Interests of Doctors

Yes, it's possible that this system protects the financial interests of doctors. By controlling the number of residents in a specialty, the RRC can restrict the supply of doctors in that field. With a restricted supply and a constant or increasing demand for these specialists, wages for doctors in that specialty are likely to be higher than they would be if there was no control over the number of residency positions.
03

Assessing the System from an Economic Perspective

Whether this system is good or bad greatly depends on perspective. From a consumer perspective, it could be good as it ensures high-quality services. From a potential resident doctor's viewpoint, it might be considered bad due to restricted opportunities. This conclusion is considered normative economics because it involves personal judgments or opinions about what policies should be, rather than stating facts or causation (which would be positive economics).

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