The supply side of the health-care debate

To say that the new Affordable Care Act has sparked controversy is an understatement, especially over consumer issues such as insurance costs and access to doctors and insurance. But some issues come from the producers’ or suppliers’ side, says N.C. State University economist Mike Walden.

“One of the things that the Affordable Care Act is expected to do is to increase the use of health-care system, particularly by those folks who did not have health insurance in the past. And if we put this in economics lingo, that means the demand for health care will increase.

“Now the concern that some economists would have would be, ‘Well, if you don’t have a comparable increase in the supply side, then you could see the price of health care go up or at least the waiting time increase.’

“Now some say that, no, this won’t happen, because as part, again, of the Affordable Care Act, there are going to be motivations for increased efficiency in the delivery of health care. But if that doesn’t happen, we do need to worry about simply the amount of health-care supply that’s out there — in particular, the number of health-care professionals.

“Now if you look, for example, at the supply of doctors, actually over the last couple of years we’ve had a significant increase in the number of individuals going … into the medical care field to study medicine, both the doctor level as well as the support level.

“But people who study this issue say that where the real roadblock may be is in terms of hospital residencies. Once an individual completes their medical training, they usually have to go practice for a couple years in a hospital setting. They are called residents. There’s been little expansion of those number of residencies.

“So some argue that that’s really where we need to look to make sure that the health-care supply increases at the same time that the demand is going up.”