Question

The Affordable Care Act (ACA) has increased the share of the population with health insurance. Most of the newly insured are young and reasonably healthy. As a result, the ACA will primarily affect the demand for primary care services, and many anticipate a shortage of primary care physicians. (Porter, 2015). Some other observers suggest that this concern is overblown (Auerbach et al. 2013). The production of primary care is changing in ways that shift its supply. One change is the rapid expansion of patient-centered medical homes, which emphasize a greater role for technology, nurses, physician’s assistants, and nurse practitioners. Another change is the growth of nurse-managed clinics. Both of these innovations reduce the number of physicians needed to provide primary care for a population.

If there were a shortage of primary care physicians, what would happen to their incomes?

Answer 1

Generally when there is an equilibrium in the market for any good or service, there is no shortage or surplus because the market equilibrium price is also the market clearing price

Here we are considering the fact that due to increased health insurance there might be an increase in the demand for physicians and at the current income level there might be a shortage of physician as well. This is true for primary health care physicians at least. If the market is allowed to operate freely then their incomes are likely to increase because of the increased competition among newly insured consumers that will push up the price of health care. This will ultimately increase quantity demanded of primary health care physicians and therefore their income.