Physician Supply and Distribution
At first glance, physician distribution may seem like a boring topic. Who cares what kinds of physicians there are, where they live, and what type of practice they have? Yet these same facts drive national policy and will drive the health care market during your years of practice as a physician.
- What were earlier federal policies?
- What were they supposed to correct?
- What has happened since then?
- What are our problems now?
- What role do HMOs play?
- How does this affect medical students and physicians?
Within the past year, students came face to face with the relevance of health care policy as Congress debated issues such as capping medical residencies to 110% of U.S. medical school graduates and placing restrictions on residency programs to promote equal numbers of generalist and specialist physicians. These proposals can seem threatening, as our current system allocates the amount of first year residency slots to equal 140% of U.S. medical school graduates, and currently, medical students choose to enter specialty practice three times more frequently than they enter generalist practice. The majority of medical students, physicians and members of the community at large were initially caught unaware by these proposals. Where did they come from? Why does the government have the right to control physician supply and distribution? (COGME)
Yet, with a second look, medical students can see that we have entered medical school during a time of evaluation, when the medical community is examining the successes and failures of earlier policies and is working to change and improve national policy so that health care professionals can provide high-quality health care to everyone in the country. By using this module, you can educate medical students about our practice environment: physician distribution, the effect of HMOs, and the changing proportions of generalists and specialists.
STUDENT ORGANIZERS GUIDE
- Organize a brown bag lunch or afternoon discussion.
- In this module, you will find materials for students: a fact sheet about physician supply and distribution and an article, "The Third Report of the Council on Graduate Medical Education." This report was written in 1992 by a group of physicians and health care providers commissioned by the federal government to examine the data on the nation's supply and distribution of physicians and medical personnel. COGME's Third Report has sparked examination of the current system and has become quite influential in determining national health policy.
- Invite a physician to come speak about this issue. Invite someone interested in policy and/or active at an affiliated School of Public Policy. Or invite a generalist physician who has worked in an underserved area, or who works in an HMO, to tell you about their experiences.
As Congress debated capping residency positions to 110% of U.S. medical school graduates and equalizing the number of generalist and specialist physicians, it became increasingly apparent that we, as medical students, should have a preliminary understanding of the policy involving the medical system around us. Even though health care reform did not pass the 103rd Congress, our generation of medical students is still entering a changing medical system, which will continue to be molded by market forces and federal/state policy, ideally improving access to, and cost and quality of health care for all Americans. What drives these policies? How can our medical education system provide the physicians needed in our country? How will we be affected?
When Did All This Start?
In the 1960s, the medical community and the federal government
decided to work together in order to provide adequate medical
care to the citizens of the United States. Reports such as the
1966 Millis report called for the country to provide equal access
to primary health care. "Medical schools and teaching hospitals
should prepare many more physicians than now exist who will have
the desire and the qualifications to render comprehensive, continuing
health services, including preventive measures, early diagnosis,
rehabilitation, and supportive therapy, as well as diagnosis
and treatment of acute or episodic disease states." And
so, as the government enacted plans such as Medicare and Medicaid,
it simultaneously provided incentives to increase the number
of physicians in the hopes of reaching a growing population and
providing medical coverage to an increasing number of medically
underserved areas. These incentives were given to medical schools
to increase their number of medical students, and to hospitals
to subsidize residency training.
Since 1960, the number of allopathic (MD) and osteopathic (DO) medical schools has increased from 86 to 141, and the total enrollment has increased from 30,000 students in 1960 to over 70,000 in 1994. (COGME)
Presently, the federal government pays hospitals approximately $70,000 per year per resident that they train (average resident's stipend: $31-38,000). The bulk of federal money, $5.5 billion, is paid by Medicare via Direct Medical Education Funds ($1.5 billion) that are paid per resident, and Indirect Medical Funds ($3.33 billion), which supplement payment for patient care. In addition, the Department of Veterans Affairs pays $400 million and the Department of Defense pays $200 million. (COGME)
The number of residency
positions has been growing rapidly.
Currently, there are 24,000 first-year residency slots, which
are filled by 18,000 allopathic and osteopathic U.S. graduates
and by 6,000 International Medical Graduates (IMGs).
Currently in the U.S., the number and type of residency positions are determined primarily by the ability of teaching institutions to develop programs of acceptable quality. Because residents provide service for the hospital and the hospitals receive $70,000 per resident, it is not surprising that the number of residents trained in the country is growing.
Since 1990, 1,500 new positions
have been added.
As a point of comparison, in Great Britain, the government finances
all residency slots and controls the number of positions by specialty.
In Canada, the number of positions funded by the provincial ministries
of health care is determined in negotiations between the medical
schools, provincial governments and physician associations.
While increases in physician numbers during the 1960s, 1970s and 1980s were due to more U.S. medical students, recent increases relate more to the number of IMGs. Since the mid-1980s, the number of first-year IMG residents has increased from 12,000 in 1988 to 19,000 in 1992, an increase from 15% to 22% of all residents. In New Jersey and New York, IMGs currently make up 58% and 42%, respectively, of all medical residents. (Shroeder, S.A. The Latest Forecast: Managed Care Collides with Physician Supply. JAMA, July 20, 1994. Vol. 272(3): 239-240.)
IMGs tend to remain in generalist medical specialties at the same rate as U.S. graduates. While significantly more IMGs enter internal medicine and pediatrics residencies, they then subspecialize at a higher rate than U.S. medical graduates.
How has this policy affected
the number of physicians in the United States?
Between 1960 and 1988, the number of physicians in the United
States more than doubled from 250,000 to 650,000. Initially,
it was hoped that increasing the total number of physicians in
the United States would increase the number of practicing generalists
who would provide primary care to the majority of Americans,
particularly by serving in underserved areas.
Yet, while the total number of physicians has doubled, the proportions of generalist and specialist MD physicians have changed from 50% generalists and 50% specialists in 1961 to the present proportions of 28% generalists and 72% specialists. When ob/gyn and emergency medicine physicians are included in the generalist definition, the ratio is still 32% primary care to 68% specialists. This decline in the percentage of generalists is likely to continue, as the amount of allopathic medical students expressing interest in generalist medicine in 1991 and 1992 fell to 17% of U.S. medical graduates. (COGME)
Due to the increased number of physicians, primary care access has improved in some areas of the country. According to the Government Accounting Office (1994), the ratio of primary care physicians in the most densely populated urban areas improved from one primary care physician per 1,265 residents in 1975 to one per 879 in 1990. In rural areas the ratio improved from one primary care physician per 2,536 people in 1975 to one per 1,872 in 1990.
However, these improvements have surprisingly not affected the most underserved areas of the country, the very areas that the initial legislation was designed to benefit. The number of Health Profession Shortage Areas (HPSAs) - defined as counties/communities with more than 3,500 people per primary care physician - has increased slightly to more than 2,000 areas.
During the 1980s and 1990s, the number of full-time physicians needed to serve these areas has actually increased slightly from 4,496 in 1984 to 4,533 physicians in 1992.
Why are there more specialists
than generalists?
Some of the factors leading to the increased number of specialists
include: higher financial compensation for specialists, decreased
prestige for generalists, medical training based in tertiary
care centers, decreased exposure to generalist role models, and
(for physicians practicing in rural and underserved areas) relative
isolation from technology and peer support.
A study by Schroeder and Showstack described how primary care internists, while limiting charges to those allowable under Medicaid, could triple their annual income by providing common laboratory procedures in the office; although they would not be able to treat as many patients. (Schroeder S.A., Showstack J.A. Financial Incentives to Perform Medical Procedures and Laboratory Tests: Illustrative Models of Office Practice.)
Hsiao and Stason demonstrate that a surgeon receives three to seven times more money per hour for time spent in the operating room than for time spent with patients or in consultation. (Hsiao W.C., Statson, W.B. Towards Developing a Relative Value Scale for Medical and Surgical Services. Health Care Financing Review, Fall 1979: 23-28.)
In addition, students who train in tertiary care settings are more likely to remain in those settings. Model training programs, such as some based in Minnesota, Pennsylvania and Iowa, demonstrate that medical students who train in rural areas are more likely to practice in those areas. (COGME)
Does this affect the cost
and quality of medical care?
While it has generated a great deal of important research over
the past 20 years, our country's specialist-centered system has
also contributed to the high cost of medical care, the discontinuity
of individual care and the shortage of physicians in rural areas.
For a specialist-centered model of care to flourish, specialists must work in metropolitan areas where they have a large patient base. As a result, both the number of specialists and the total number of doctors concentrated in metropolitan areas have continued to grow.
Care provided by specialists is more expensive than similar care provided by generalists. A study conducted by Welch and Miller et al. concluded that geographic distributions in physician costs did not relate to the percentage of inpatients vs. outpatients, the number of diagnostic studies conducted, or the severity of patient illness; instead, physician costs related to the percentage of specialists vs. generalists in a given area. (Welch, W.P., Miller, M.E., Welch, H.G., et al. Geographic Variation in Expenditures for Physicians' Services in the United States. NEJM, 1993; 328: 21-27.)
Residents of low-income areas in Washington, D.C., who often do not have access to primary care physicians, are hospitalized three times more frequently than people in high-income communities for asthma, diabetes, high blood pressure and many other conditions that can be treated with routine medical care (Washington Post, August 1, 1994.)
How do HMOs affect this
issue?
Enrollment in managed care plans has increased from 12.5 million
people in 1983, to 45 million in 1993. In 1994, HMOs served 16%
of the population. HMO systems tend to utilize an increased number
of generalist physicians and a decreased number of specialists.
Therefore, as managed care grows, our country will likely be
faced with a specialist surplus and a generalist shortfall.
Anecdotal data from large HMOs indicate that generalist physicians are already receiving higher salaries and that specialists are finding significantly less demand for their services. Specialists who were not quick to join HMOs - often those specialists with the strongest private practices - are now having difficulty finding opportunities to join.
According to the Bureau of Health Professions, in a managed care-dominated health care system utilizing 137 physicians per 100,000 population, there will be a shortage by the year 2000 (of 35,000 generalist physicians, and a surplus of 115, 000 specialist physicians) if present patterns of specialty choice continue.
According to Weiner in a study examining HMO staffing patterns, when our medical system develops to the point where 40% to 65% of Americans receive care from managed care networks (utilizing 120 physicians per 100,000 population), there will be an overall surplus of 165,000 physicians; the requirements and supply of primary care physicians will be in relative balance, and the supply of specialists will outstrip requirements by more than 60%.
If managed care is implemented for everyone in the nation, it is likely that a 65% generalist to 35% specialist ratio will be necessary to provide adequate medical care.
(Weiner, J.P. Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirements: Evidence from HMO Staffing Patterns. JAMA 1994; 272: 222-230.)
Suggested Solutions
It has become clear, as many groups have researched the nation's
health care work force, that our country does not have a plan
to optimize the number of physicians and their areas of training
so that we can meet our health care needs. There are a number
of solutions under consideration:
- Increase generalist physicians' salaries, particularly by narrowing the generalist-to-specialist reimbursement differential. In this system, physicians would receive less compensation for procedures and more compensation for diagnosis and patient education.
- Increase the prestige of generalist physicians by instituting departments of Family Medicine at all medical schools, along with increasing funding for primary care research and providing community physicians with admitting privileges at local hospitals.
- Limit the number of U.S. residency positions to 110% of the number of U.S. medical school graduates. (All medical groups recommend keeping the number of residency slots above the number of graduating U.S. medical students in order to fulfill a long-standing commitment to train foreign medical graduates.)
- Compose the U.S. residency positions so that an even number of generalists and specialists are produced.
- Change Medicaid funding of residencies to support community-based training.
- Create an all-payer pool so that all medical providers pay equally for medical training and there is not an economic incentive to utilize non-teaching facilities.
How can students get involved?
If students are concerned about the supply or distribution of
physicians, or have opinions about the suggested solutions to
these problems, they can:
Write to their state or national representatives or senators, or organize a letter-writing campaign. This is an important time to let legislators know the opinions of tomorrow's physicians, particularly as legislators debate issues such as the future of the National Health Service Corps. AMSA has a full-time lobbyist who works to represent medical student opinions. For more information about legislative activism, call AMSA's Legislative Affairs Director at (703)620-6600 ext. 211. The current LAD will send you a packet of information with sample letters and suggestions on how to lobby legislators.
For students interested in health care policy, the AMSA Resource Center has an excellent guide to Health Policy Fellowships. The guide contains national- and state-based fellowships, as well as summer and rotational opportunities. To receive this guide, call AMSA at (703) 620-6600, ext. 217.
Questions to Think About
- Why, if there are so many physicians, are there so many more specialists than generalists?
- What, if anything, could have been done differently to prevent this?
- How should our country work to get physicians into underserved areas?
- What would influence individual students to dedicate part or all of their career to an underserved area?
- Is it the responsibility of the medical profession to guarantee that all Americans have access to a physician (i.e. geographic access)? Should this be a goal that medical schools and medical organizations work to achieve?
- Should medical education be a private/public partnership (i.e. funded by the medical student, the medical institution and the federal government)?
- Is medicine inherently different from other professions and does it therefore deserve this funding?
- What obligations do future physicians have to their medical institutions and the federal government in exchange for a subsidized education?
- Would it be better if the federal government had no role?
- Would it be better if the government paid the individual student's share (so that medical school was free) in exchange for years of service?
- Would a change in this system lead to improved physician distribution?
- Should future physicians and the public be better educated about the public-private partnership that exists today? How?
References
- Much of the information in this Project-in-a-Box comes from the following COGME sources:
- Council on Graduate Medical Education Third Report, "Improving Access to Health Care Through Physician Workforce Reform," U.S. Department of Health and Human Services; Washington, D.C., 1992.
- Council on Graduate Medical Education Fourth Report. "Recommendations to Improve Access to Health Care Through Physician Workforce Reform," U.S. Department of Health and Human Services; Washington, D.C., 1994.