The Economic Theory That Explains Why Americans Are So Mad- revisited

I recently listened to this episode from June 4, 2024 and while there were some points I agree with I have to say I was disappointed with how out of touch I felt Annie Lowrey was for the reason for rising medical costs in the United States. It bothered me enough that I wanted to bring it up here and see if maybe I misunderstood or if this is actually a common conception that people have. Her quote was, “And I actually think that the fact that you've had this bending in the health care cost curve, there's space for, yeah, let's start getting drug prices down. Doctors and nurses, cover your ears. Let's allow more of them in and allow more competition so that in the long term, you can have lower wages for them. It's very, very, very unpopular, but that would probably be good. Let's increase health care supply, but let's just get the prices down for all of these things. Let's rationalize this completely irrational system. Is that good on a bumper sticker? Does that win elections? I'm not sure about that, but it's good policy.”

Full disclosure- I’m a registered nurse. I make $28/hour. I had to pay for a college degree for this job. Does she really believe that nurses making $28/hour (take out 30 minutes for the unpaid lunch break that we don’t get) are the reason for outrageous health care costs? What about the MBAs making bonuses based on profit? There are numerous studies that show how much hospital administration staffing has increased in the last few decades. I can link to articles in the comments if anyone is interested. How is bedside staff making $28/hour the problem? For physicians, the cost of medical school and their minimum wage residencies put them deeply into debt upon starting out. Why would you target the pay of the people actually working bedside to keep you alive and not hit the salaries or the executives and CEOs at the top making millions off our back? I was a huge fan of the Ezra Klein show, but this really rubbed me the wrong way.

*edited to add- Something that I see coming up from a lot from people who aren’t in health care is the misunderstanding of current staffing. There is not a nursing shortage in the United States. Hospital administration learned during COVID that they could run on a bare bones staff and that staff would work harder to still provide the best care they could. Example- nurses taking 3 ICU patient instead of 2. Something I’ve noticed too is that patients that aren’t that sick get moved into the ICU for closer medical monitoring- ie to have a nurse with only three patients instead of a nurse with 8 as they would in a lower acuity unit. Who pays for this? Patients, either in worse care or higher prices. The ICU is considerably more expensive than the floor. Increasing the supply of nurses is only going to make wages go down more while hospitals continue to run on the bare bones staff.

What is the incentive for a hospital to properly staff once they know how little staff they can run on?

If it’s happened with nurses I’m not sure what’s to stop it from happening with doctors as well. Flood the market, drive down wages, and hire the same number as before. Who sees the benefit of the decreased cost? If you think hospital admin is going to pass the savings onto the patients and not into their own pockets, you’re significantly less jaded than I am.