I have heard people argue that the reason that America's healthcare costs are so high have to do with the AMA and the restriction of the supply of doctors. This makes sense, but how does the AMA restrict the supply of doctors? I understand that the AMA is essentially a guild and can therefore limit who can and cannot become a member. However, only 22% of physicians and medical students are members of the AMA. What about the other non-AMA physicians?
To my second question, does the government issue licenses proclaiming that an individual is a doctor and can legally practice medicine? How does the government do this? Does the government do it by regulating the requirements for medical schools? I understand that you can't just claim to be a doctor and open up a practice with no training, I'm just wondering what training is required and who decides that and how.
Sorry if some of these are stupid questions, I am just trying to clarify my understanding of the U.S. medical system. Even from pro-liberty individuals, I hear some about the AMA and that they restrict the supply of doctors, but the mechanism through which that is done isn't explained. You can become a legitimate physician without dealing with the AMA, right?
AMA licensure has limited the number of medical schools: http://www.lewrockwell.com/archives/fm/08-90.html
The Flexner Report of 1910, which Murray N. Rothbard discusses elsewhere in this issue, further restricted entry into the profession, as legislatures closed non-AMA-approved medical schools. In 1906, there were 163 medical schools; in 1920, 85; in 1930, 76; and in 1944, 69. The relative number of physicians dropped 25%, but AMA membership zoomed almost 900%.
During the great depression, as Milton Friedman notes, the AMA ordered the remaining medical schools to admit fewer students, and every school followed instructions. If they didn't, they risked losing their AMA accreditation.
Today, with increasing government intervention in medicine – often at the AMA's behest – the organization exercises somewhat less direct policy control. But it still has tremendous influence on hospitals, medical schools, and licensing boards.
It limits the number of medical schools, and admission to them, and makes sure the right to practice is legally restricted. The two are linked: to get a license, one must graduate from an AMA-approved program. And there is a related AMA effort to stop the immigration of foreign physicians. The AMA also limits the number of hospitals certified for internships And licensure boards will accept only AMA-approved internships.
The licensure boards – who invariably represent medical societies – can revoke licenses for a variety of reasons, including "unprofessional conduct," a term undefined in law. In the past, it has included such practices as price advertising.
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I'm not familiar with the US system, but I imagine that it is the AMA that sets who can become a doctor (i.e. MDs) and who cannot and also which regulates the length and content of the curriculum? If so one need not be a member to be affected by it.
Freedom of markets is positively correlated with the degree of evolution in any society...
Which level of government created the licensing board? Who decides who is on the board?