If Milton Friedman Had Witnessed the Korean Medical School Admissions Controversy

Milton Friedman, a giant in free-market economics, argued that the benefits created by labor unions were stolen from non-union members. Friedman singled out the American Medical Association (AMA) as the most ironclad union among America's various labor unions.

The AMA was launched in 1847 with the lofty goal of 'improving public health care and advancing medicine.' However, Friedman argued that the AMA was nothing more than a cartel that blocked competitors from entering the medical market through measures such as limiting medical licenses.

One of his prime examples was the AMA's behavior after the Nazis came to power in the early 1930s and German Jewish doctors fled to the United States. Until then, anyone who graduated from medical school in the US could apply for a medical license without any other conditions, but the AMA suddenly proposed that 'US citizenship' be made a mandatory requirement. This was a move to block the German Jewish doctors who had entered the country as refugees from practicing medicine in the United States.

Considering that German medicine was, and still is, at the forefront of the world, Friedman viewed this as an argument made not for the protection of patients, but for the protection of American doctors' interests.

During the Great Depression of the 1920s, the AMA became even more blatant in its efforts to protect its turf.

In response to the government's efforts to increase the number of doctors, the AMA argued that 'increasing the number of doctors would lead to excessive treatment, which would bankrupt the national health insurance system' and put a stop to it.

This is an argument that is being repeated in Korea today.

The Korean Medical Association recently argued against the government's policy of expanding medical school admissions, claiming that 'an increase in the number of doctors would lead to excessive treatment, which would bankrupt the national health insurance system' and 'an increase in medical school admissions would lower the quality of education.'

Excessive treatment, which amounts to theft, is a matter of individual doctors' professional and ethical consciousness. Measures to prevent excessive treatment may include stricter enforcement and punishment of doctors or ethical training, but it has nothing to do with the number of medical school admissions.

The claim that an increase in the number of medical school admissions would lead to a spread of excessive treatment sounds like a 'self-deprecating joke' that classifies all doctors as potential criminals.

In a 1976 lecture after receiving the Nobel Prize in Economics, Friedman said, "If there is any scientific evidence to prove a correlation between an increase in the number of doctors and an increase in unethical medical practices, please present it." While there are some attempts to propose models such as 'provider-induced demand', which lacks empirical research, they are not considered answers to Friedman's question.

Similarly, the possibility of a decline in the quality of medical education raised as an argument against expanding medical school admissions is also lacking in evidence. Even if the medical education environment were to deteriorate, that would be a task for the education authorities and universities to address. The argument that the quality of medical education might decline is not a matter for the medical community to interfere with when it is not even certain.

Friedman analyzed that American doctors, through the means of limiting licensing, had managed competition in the medical market and increased their income by 17% to 30%. According to a recent survey, the average annual salary for doctors in the United States is $350,000 (approximately 460 million won). This is at the top of the list of various professions.

The same is true for Korea, where medical school admissions are strictly controlled. According to the National Tax Service, the average income of doctors in 2021 was 269 million won, significantly higher than that of other professionals.

In 2020, the average income of lawyers was 40% of that of doctors, which was narrower than in 2014 (60%). Of course, it is natural for professions with high demand in a capitalist society to receive high compensation. However, things are different when a particular group of professionals resorts to restricting competition to receive high compensation.

It is the government's responsibility to correct this market distortion. It may not be easy to persuade a group with the most powerful influence in our society, but consumers suffering from a shortage of supply will applaud the government's bold measures to normalize the market.

{Source: [Special Correspondent's View] If Milton Friedman Had Witnessed the Korean Medical School Admissions Controversy (msn.com) by Go Il-hwan, 2023. 11.}

The American Medical Association (AMA) and the Korean Medical Association both oppose government policies on the grounds that an increase in the number of medical school admissions could lead to excessive treatment and a decline in the quality of medical education.

However, it is important to note that Milton Friedman, who won the Nobel Prize in Economics, argued that the 'American Medical Association (AMA) is nothing more than a cartel that blocks competitors from entering the medical market through measures such as limiting medical licenses.' If their claims are pure and rational, they should be free from such criticism.

Personally, I believe that the establishment of a medical delivery system (1st to 3rd level medical systems) and the establishment of medical fees and medical systems should be prioritized. To this end, the government, medical organizations, and citizens as consumers should hold long discussions to find common ground. After that, the number of medical school admissions should be discussed from the perspective of balancing supply and demand in the overall medical market.

The income of medical professionals after graduation from medical school can be determined by looking at national economic growth and average national income. However, it can be determined by whether the country will establish a medical service policy as a completely public medical service, a public medical service + private medical service, or a completely private medical service.

All three of these medical services have their pros and cons, so each country should choose the service that suits it and build a foundation.

Most countries are aware of the pros and cons of both socialist and Commonwealth countries that prioritize public healthcare and the American healthcare system, which maximizes private healthcare services based on a fully market economy. It seems that no country can boldly reform its healthcare service policy because of the political struggle between politicians and related interest groups, and the politicians' interests.

November 5, 2023.