Physician Shortage

1
Physician Shortage

• HCAI 5313 Policy Brief
• Mary Dwight
• April 28, 2007

2
Problem

• Association of American Medical Colleges (AAMC)
  predicts shortage of 90,000 physicians by 2020
• Council on Graduate Medical Education (COGME)
  projects deficit of 85,000 by 2020
• Other studies indicate deficit of 200,000
• Association of American Medical Colleges (AAMC)
  calling for 15 increased enrollment through
  2015
• Specialty and subspecialty care in greater demand

3
Parameters Impacting the Problem
4
Generation ComparisonGen-Xers Baby Boomers
vs.
Younger Physicians
Older Physicians

• Sense of bringing up-to-date knowledge to the
  practice (academic conceit)
• Feel that the older physicians are wasting their
  time in hospital politics, thus they are left to
  do the real work of the group
• Saving the physicians from an unbearable workload
  to feeling they owe them in return for years of
  work building the practice
• Look to the older physicians as a resource for
  referrals
• Gen-X physicians want work week of less than 60
  hours

• Sense of ownership/entitlement
• Partners/Owners
• Key rights Full compensation
• Majority vote for dismissal
• Support the younger physicians building their
  practices
• Call and weekend coverage demands were greater in
  past years accustomed to long hours
• Contribute to upholding the reputation to the
  community
• Looking to reduce hours and call coverage
• Modifying scope of practice- eliminating some
  services

5
Historical Projections

• Surplus predicted for 1980s and 1990s did not
  occur
• Response to inaccurate prediction
• Graduate Medical Education (GME) programs
  decreased the number of enrollees
• Based on recommendation from Graduate Medical
  Education National Advisory Committee (GMENAC)

6
Projected Demands on Healthcare

• Continued population growth in U.S.
• Cardiology
• Radiology
• Pediatric and surgical subspecialties
• Relative health of the economy
• Lifestyle
• Obesity
• Smoking

• Technological advances
• More procedures available
• Media and marketing yields greater patient
  requests for access
• General Surgery
• Older patients undergoing more procedures
• More aggressive in treating this age group now
• Studies require greater physician time
• Interpretation/Review of results
• Explanation of findings

7
Projected Demands on Healthcare (cont.)

• Aging of Baby Boomers
• Medicare plus Supplemental coverage
• Reduces financial constraints
• More disease-prone age group
• Urology
• Geriatrics
• Ophthalmology

• Downfall of managed care
• Negative consumer response to HMOs
• Healthcare choices more accessible
• PPOs
• Hybrid forms of insurance
• Increasing utilization

8
Supply of Physician Services

• Dependant on number of licensed MDs
• How many hours in work week
• Substitution (relative price) effect
• Labor for leisure when salary level increases
• Opportunity cost of time higher
• Income effect
• Substitution of leisure for labor
• Leisure is a superior good
• How many non-physicians to employ
• Avoiding backward bending labor supply curve
• Results in same or more office visits per week
• Physician incomes rise
• Not subject to phenomenon

9
Supply of PhysicianServices (cont.)

• Imminent Retirement of 38 of practicing
  physicians (2005)
• 1/3 of workforce- gt55yrs of age (2006)
• AMA total physicians- 779,605 (2002)
• Expected 340,000 large-scale retirement starting
  in 2010
• 22,000 physicians to retire annually by 2020
• 9,000 annual rate in 2000

10
Supply of Physician Services (cont.)

• Early retirement due to changing character of
  medical practice
• Independence and prestige changing drastically
• Sub-specialization
• Consolidation of small practices into larger
  groups
• Trend toward consumerism
• Relative decline in income for many specialties

11
Supply of PhysicianServices (cont.)

• Medical malpractice Negative legal climate
• Defensive medicine adds tremendous time demands
• Medico-legally necessary services
• Often non-medically necessary
• Leave practice
• Modify scope of practice (i.e. Obstetrics)

12
Graduating Physicians (2004)

• Reported Graduates
• 1980 14,469
• 2004 16,896
• 8.5 increase

• U.S. Census
• 1980 2.2 million
• 2004 - 2.9 million
• 7.5 increase
• Today - 3.1 million

Sources AAMC. Diversity in the Physician
Workforce Facts and Figures 2006
U.S. Census Bureau, www.factfinder.census.gov,
4/22/07
13
States Affected According to AAMC

• Arizona, California, Florida, Georgia, Kentucky,
  Massachusetts, Michigan, Mississippi, North
  Carolina, Oregon, Texas and Wisconsin
• Deficits due to rapid population growth
• Doctors migrating from the area
• Inability to recruit physicians

14
Economic ArgumentsSurrounding the Projected
Physician Shortage
15
Negative Impacts on Practice

• Reimbursement cuts for Medicare/Medicaid
• Physicians limiting or eliminating from patient
  mix
• Affects reimbursement on commercial contracts
  based on reciprocals
• Escalating regulation and paperwork

• Rising practice expense
• Rising wage costs
• Higher costs of salary benefits (health coverage)
• Higher costs for supplies
• Higher costs for rent, telephone, and other
  expenditures

16
Barriers to Entry - AMA

• Some economists linked the high returns to
  strategic (profit-maximizing) behavior on the
  part of the AMA. (Johnson-Lans, 114)
• Guild imposing strict apprenticeship requirements
• Limits entry to the profession
• If demand remains constant, imposed restrictions
  on number of physicians will increase price of
  services
• Regardless of restriction due to quality control

17
Women in Healthcare Affecting Output

• Student stats
• 30.8 1981-1982
• 39.8 1991-1992
• 48 2001-2002
• Anticipate gt50 in the decade ahead
• Economic benefit
• 0.8 of the full-time week of 60 hours of todays
  male physician
• Flexible lifestyle
• Family Life

18
Prior Policy Responses

• 1960s shortage of physicians
• Immigration Act of 1965 (modified in 70s)
• Health Professions Education Act (1965)
• 1980s inaccurately predicted surplus
• Enrollment in medical schools virtually unchanged
  for past 25 years

19
Future DirectionProblem Resolution
20
Targeted Medical School Growth

• AAMC wants medical school enrollment targeted to
  needs of areas of population growth
• AAMC projects 17 rise in first year medical
  students by 2012
• Number of applicants at 35 - down 26 from 1996
• 15 increase would yield additional 2,500
  physicians yearly
• COGME purported a 24 increase in physicians
  between 2000 and 2020
• Rate to slow substantially after 2010
• After 2015, population growth will overtake the
  U.S. physician supply altogether

21
Medical School Expansion Projects

• According to survey of 125 US Medical School
  deans
• Enrollment to expand to nearly 19,300
• Variety of mechanisms
• New clinical affiliations (68)
• Expansion of existing campuses (50)
• New regional/branch campuses (22)

Source Medical Economics, March 2007
22
Controversy Looming

• Problem is where they are and what they are doing
• Recruitment problems
• Not symptoms of overall decline in physician
  population
• Only certain populations are lacking the
  specialties
• Improve efficiency rather than number
• Workforce planning to improve U.S. overall
• Determine desired health outcomes and composition
  of workforce needed to accomplish such
• A greater use of physicians for the care implies
  greater inefficiency. Andis Robeznieks

23
Future Physician Workforce Models

• Models differ in limitations, implications for
  population health outcomes, and resource costs
• Supply-Demand (extrapolation)
• Residency positions increase at expected rate of
  economic growth
• Trend (extrapolation)
• Existing trends, policies, and training
  maintained
• No future changes in market factors
• Need (expert)
• Number of physicians should match calculated
  number required for future population.

24
Future of Healthcare

• Currently using Supply/Demand (extrapolation)
  model
• Some argue for the Need model to be utilized
• Substitution of non-physician healthcare workers
  on the rise

25
Forces for Change

• Facilitate or restrict patient access to care to
  prevent over utilization
• Affect the quality of this care by controlling
  the operation of the healthcare delivery system
• National, regional, local, and institutional
• Societal effects
• Longer wait times for appointments
• Limited access in localities

26
Recruitment Strategies

• Subspecialty needs
• Address issues and priorities related to debt
  load and lifestyle
• Legislators expand loan-repayment and forgiveness
  programs
• Financial incentives
• Exposure to breadth of specialty career options
• Demographic conditions (i.e. Women)
• Work environment concerns
• Prevent over-utilization of services
• General and weekend call coverage
• Tactics for retention
• Recruit only in specialties of need in the market