The doctor deflator

The doctor deflator

An organization of Indian doctors in the UK says that some 5,000 doctors who worked for the National Health Service (NHS) there have returned to India. Another 10,000 could be forced to leave, after the British government changed the immigration rules on skilled workers such as doctors.

The interesting question is: if 15,000 doctors come back next year, where will they work? A modern hospital employs something like 150 doctors. So a hundred new hospitals would be needed to absorb the sudden increase in the supply of doctors in India.

Despite the hospital-building spree in big cities, it is unlikely that a hundred new hospitals will be up any time soon. The alternative: increased competition among doctors to get placed in existing hospitals and perhaps a drop in medical fees.

The deflator for medical services, an indicator of inflation, has been one of the highest sectoral deflators in recent years. Could that change?