The Promise of Foreign Doctors

The news that foreign-born doctors trained abroad practicing in America are just as good as US-born and US-trained doctors (US-born doctors who trained abroad are worse, presumably because going to foreign medical school selects for less qualified applicants) is an indication that we have far too few foreign doctors practicing in the United States. Our American doctors are the highest-paid doctors in the world, earning much more than Canadian or French or Dutch doctors, to say nothing of the Indian and Pakistani doctors who tend to emigrate here. And yet our doctors fail to demonstrate the kind of superior performance that would justify this sort of thing.

I often think that if the American Medical Association were renamed the International Brotherhood of Doctors, AFL-CIO that discussion of health care policy in this country might be much-improved. Then perhaps conservative and centrist elites would suddenly recognize that massive medical protectionism is a major impediment to improving productivity in the health care sector.

In terms of practical steps, I think there are two main issues here. One is international standardization of qualification standards. As the NYT explains, to practice in the US foreign doctors “have to pass a series of rigorous exams and complete residency training.” The goal should be to develop an international standard for medical training that can, in principle, be completed in any country so that a degree achieved in Bangalore or Brussels is just as valid a credential as one earned in Boston. Second, it would be good to develop some kind of system of transfer payments to compensate poor countries that train medical professionals who go abroad. If too many Indian doctors leave the country, then India is going to lose interest in training doctors even though they seem to have comparative advantage in doctor-training. You want to turn this into a proper trade in medical services where US taxpayers win through lower Medicare cost growth, but Indian taxpayers also win via compensating payments from the United States.

The more general points are that higher levels of immigration by skilled professionals is highly desirable, and that the general arguments in favor of free trade in goods also apply to high-end services. Asymmetrical application of arguments for economic liberalization to the low-skilled only exacerbates inequality and stunts growth.