Medical associations, medical education and training on the job

This study analyzes the impact of medical associations (MAs) on physician income and standards of medical education and training on the job. Higher standards increase the probability of adequate treatment of patients. It can be shown that the older generations of physicians exploit the younger ones by either implementing seniority payments or by setting a higher standard for medical education and a lower standard for training on the job than the health authority. The rents which can be achieved by the physicians accrue only to the older generations who initially set up the MA. Abolishing the system in favor of individual contracting, therefore, requires considerations about a compensation of currently older physicians.