Political Clout in the Age of Outsourcing

Americans were once nonchalant about outsourcing – until reports emerged about hospitals sending radiology tests to doctors in India, who provided low-cost accurate readings. Commentators and politicians took notice and debated what such outsourcing would mean for health care. Economists from MIT decided to take a closer look and found a single company in India with three radiologists doing such readings for US hospitals. Radiology, which relies on images that can be transmitted by computers, offers great potential for outsourcing. But doctors in the US have managed to erect steep trade barriers and thwart likely competitors. The profession is self-regulated, and doctors make board certification difficult for specialists trained outside the US. Indeed, the three radiologists in India were trained at Yale, University of Massachusetts and Baylor. Eventually, however, the spiraling cost of health care could drive an angry public to demand an end to self-regulation that protects careers and immense salaries. Economists warn that similar foreign competition looms for accountants, architects, educators, engineers and lawyers – whose fields are regulated and certified, providing accountability and safety, but also protecting salaries and jobs. The professionals can't expect much sympathy from factory workers who would have appreciated similar job protections. – YaleGlobal