Since many folks seem confused on the idea of free trade in doctors, let me make a few points that may help clarify the issue. First, we should think about trade in doctors like we think about trade in manufactured goods. When the Bush 1-Clinton administration wanted to increase trade in manufactured goods with Mexico, tariffs were not the issue. U.S. tariffs on Mexican manufactured goods were already very low (@2 percent, on average). The issue was setting up an institutional structure that guaranteed U.S. corporations security so that they could set up factories in Mexico without having to worry about expropriation, restrictions on repatriating profits, or other such concerns. The treaty also gave assurances that exports to the United States would not be blocked by future tariff or non-tariff barriers.
With this in mind, free trade in physicians� services would mean setting up a set of transparent education and licensing standards (which would also have to be standardized across the 50 states, just like with safety standards for manufactured goods). Every student in Mexico, India, or China, would then know that if they took the right courses and passed the right exams (administered in their home countries by U.S. licensed testers) then they would be able to practice medicine wherever they wanted in the United States, with the same opportunities as doctors trained in New York or Los Angeles. With such a structure in place, foreign students would train to practice medicine in the U.S., and foreign medical schools would teach to these standards.
We are very far from this �free trade� situation today. First, the rules were quite deliberately designed to restrict the number of foreign doctors (the NYT and Post both had several articles on this point in the mid-nineties, cited in The Conservative Nanny State). Second, the federal government, and many state and local governments have restrictions and even outright bans on employing foreign doctors. Governments are large employers of doctors.
Finally, it is illegal to hire a foreign doctor because they are willing to work for a lower wage than a native born doctor. While Wal-Mart is free to buy its toys and clothes from whoever sells them at the lowest price, an employer is supposed to certify that they were unable to find a U.S. citizen or green cardholder for a position before they are allowed to hire a foreigner. While this rule is not tightly enforced, it certainly precludes the possibility of a Wal-Mart Hospital that quite explicitly seeks out the lowest cost doctors from anywhere in the world. The government would throw the operators of Wal-Mart Hospital in jail. That�s because doctors have more political power than the workers who make toys or clothes.
-- Dean Baker