I’ve frequently heard the claim that one reason for high physicians’ salaries is that the AMA hasn’t allowed new medical schools to be built in the United States. By keeping supply low, the theory goes, the demand is high and accordingly so are the prices. I may have even repeated this once or twice without checking.
Well, the theory may be plausible, but data contradicts it. At least current data – new medical schools are currently being built. See the chart below:
There are even more slated to open in the coming years.
That said, there’s a surprising gap from the late 70’s to the early 2000’s. Perhaps this was true in the past, and people just haven’t gotten over their old anecdotes.
With the Baby Boomer physicians retiring in the coming decade (about half of all of them) just as the Baby Boomers are needing more medical care, there is a serious shortage of physicians on the horizon. Whether these new medical schools can fill the gap will remain to be seen. Even if they can make up the difference, there will be a serious reduction in the average experience level of the medical profession, which in itself will reduce the average salary. Unless there aren’t enough physicians to go around.