WBUR.org, Boston’s National Public Radio news station, is conducting a report titled Are the Kids All Right? regarding the impact of the pediatric mental health provider shortage in Massachusetts. A shortage which the publishers state without question is getting worse. This is substantiated by a large number of studies made by the industry illustrating that the demand for such services are increasing while, particularly in Massachusetts, the supply of physicians is decreasing.
When considering the scarcity of resources in any paradigm, it is necessary to look at both the supply and demand side of the equation. With even the most elementary understanding of economics, one recognizes that when the demand for a service or product increases, the market expands, and the incentive for more suppliers to enter the market increases as well.
There are times, of course, in which the cost to supply a product or service is not in line with what is affordable to those who demand it. In such cases, the profit motive is by far the greatest conduit to bridging such a gap. In other words, the only rational way to make a profit is to identify a demand that is not being satisfied, and supply it in such a way that one can both make a profit and gain market share (in other word, supply it to the most people by increasing access).
So why is this not the case in Massachusetts? Why, in accordance with WBUR’s report and others, are indications showing the supply of pediatric mental health practitioners will continue to go down while demand will go up?
The reason is due to the fact that the government, not the market, is in control.
As stated in the report:
Dr. Eugene Beresin, director of Child and Adolescent Psychiatry Residency Training at Massachusetts General Hospital, knows that he and the doctors he trains are in great demand. He says there are several reasons why: Demand for kids (sic) services has skyrocketed since the 1990s while the number of certified training programs has remained stagnant. Beresin also says a big reason people stay away from the field is that child psychiatrists aren’t compensated for all of their time which is usually triple the amount of time that other medical professionals spend with a patient.
In child psychiatry, you need to see the child for a longer period of time, Beresin said. You need to make contact with parents, teachers, court officials. You have to write reports. The amount of ancillary work you have to do is pretty big.
It is evident that child and adolescent psychiatry is a demanding profession. The key element of this report is in its subsequent statement citing a recent Blue Cross Blue Shield of Massachusetts study which concludes, because of the lower compensation and an aging workforce, it’s likely that more than half of the pediatric mental health care workers in Massachusetts will leave in the next five years.
What the report neglects to cite is that lower compensation is due to the fact that government, not market forces, is what is driving down such compensation making the benefits to entering into the field minimal. Without a profit motive, no person or company is compelled to enter into the field to supply a demand. Even if there was a possibility to satisfy the demand at a lesser cost and in turn a lesser price, why risk the time and effort to do so when such compensation is capped by the government?
Without proper incentive, there is no motivation; and without motivation the gap in supply and demand is not closed. Access to care is minimized.
This article is a compliment to a another analysis of nationalized health care published by this author titled, Health care employment opportunity costs and the inevitable rationing of care.
© 2011 Objective Nation