7.) Healthcare Professionals Flashcards
What are the typical characteristics of a career in medicine?
Very long training, low starting salary during residency, but very high salary after qualification. Work very long hours, have high discount factors, delta, as willing to wait to earn higher wages. Barriers to entry due to regulation and competition of medical school.
What are the barriers to entry in medicine and the consequences of this?
Regulations on physicians, allowing them to earn monopoly rents.
What are monopoly rents?
Extra wages above the competitive level that accrue to producers in a market where supply is artificially constrained.
What is physician induced demand (PID)?
Extra demand for medical goods and services induced by the advice of a physician who takes into account goals other than patients’ objectives.
What is defensive medicine?
Deviations away from optimal medical practice in order to reduce the risk of conflict with patients.
What type of demand is healthcare?
High income elasticity for demand, increases in income lead to increased demand. Takes a long time to train as a doctor so supply is lacking somewhat behind demand.
