Addressing the Physician Shortage Under Reform

—By Sarah Mann

Given the likelihood that more people will enter the health care system in coming years following passage of the Affordable Care Act (ACA), it is equally likely that more doctors will be needed to treat them.

Recognizing the growing gulf between physician supply and patient demand, medical education leaders and the AAMC are working to inform Congress and other lawmakers about the best means of addressing physician shortages. One of these potential means is lifting the existing cap on Medicare-funded residency positions.

“After the passage of ACA, there is recognition that there will be real physician shortages if we don’t do more to lift the residency cap,” said AAMC Chief Advocacy Officer Atul Grover, M.D., Ph.D. “People on both sides of the aisle have realized the need to train more doctors.”

 A physician shortage was already expected before ACA was signed into law in March 2010, and now that gap could worsen. According to projections released last fall by the AAMC Center for Workforce Studies, there will be a shortage of about 63,000 doctors by 2015, with greater shortages on the horizon—91,500 and 130,600 for 2020 and 2025, respectively. Earlier projections had placed the shortage at about 39,600 doctors by 2015. Since 2008, AAMC projections have incorporated later utilization data and changing specialization patterns among new physicians, and have shown shortages across those specialties as well as in primary care.

https://www.aamc.org/newsroom/reporter/april11/184178/addressing_the_physician_shortage_under_reform.html

COMMENT:  We are trying guys.  Already we have increased medical school slots by 13% with a target of a 30% increase by 2015.  One of the ironies of this situation covered in this nice article from the AAMC is that the major source of funding for residency positions, Medicare, is frozen at 1996 levels.  If we do not increase this number proportionately to the increased number of US graduates, then all that will happen is that the larger number of US graduates will displace the foreign graduates who are currently training in the US.  Foreign medical graduates now make up about 27% of the US physician workforce.  To lower that number we would have to increase the number of US graduates by nearly 60%, an unlikely scenerio.

 I will attempt to respond seriously to a seriously posed question:

“I am in no way trying to be critical here but perhaps you could try and explain to me why the US Government spends nearly twice as much of its GDP on healthcare than the UK Government yet we are the ones with the guaranteed universal, free-at-the-point-of-use healthcare system which covers every square inch of the UK no matter how remote or deprived.”

 The fee-for-service system locked into the core of American medicine in the mid-Twentieth Century when private third party payers paid physicians the reasonable, customary and usual (RCU) for physician’s services. In the1960s the passage of Medicare and Medicaid established RCU as a matter of law in order to placate the American Medical Association. 

 This payment methodology for physicians was fundamentally problematic from the start.    It basically gave physicians control of setting the prices of medical care. 

Under fee-for-service paid for with RCUs, a newly developed procedure or technology would be scarce and therefore costly.  When I was at the Brigham in the 1960s, the going rate for mitral valvulotomy was 10 percent of one’s net worth.  There were few surgeons who could perform this costly, but life-saving procedure.  The same was true for coronary catheterization.  However, as these procedures became commonplace, their RCUs remained tied to their original scarcity.  This fact is fundamental reason why procedurally oriented specialties make two to three times the income of primary care specialties.

While this payment system has attracted the best and brightest entrepreneurs to medicine, it has a costly dark side.  In combination with the tremendous research and development engine at the NIH and the ability of the pharmaceutical and devise industries to develop and market new drugs and devices with assurance of payment at the highest rates in the world, these physician entrepreneurs moved American medicine to the head of the class in terms of technological quality and costs.

The second fundamental problem is the capitalistic, for-profit nature of American society as applied to medicine.  When Blue Cross and later Blue Shield were established, they were licensed as so-called health service benefit plans whose primary purpose was to assure that surgeons and hospitals were paid.  By law, they had to use community rating for their plans and offer open enrollment at least annually.   In the 1980s, they suffered badly from competition from commercial health insurance plans that could beat them out by experience rating employer-sponsored health plans.  Today virtually all Blue Cross/Blue Shield plans have converted into for-profit entities to compete with commercial insurance companies.  That means that a significant portion of insurance premiums goes to overhead.  The ACA will limit that to 20 percent for smaller companies and 15 percent for larger ones.  The truth is that most for-profit insurance companies profit primarily by denying care.  A proposition that even the conservative Forbes magazine columnist agrees with.

http://www.forbes.com/sites/rickungar/2011/12/28/more-proof-that-the-american-for-profit-health-insurance-model-is-doomed/

 The same for-profit model has been adopted by hospitals and hospital systems creating more money for the systems and fewer dollars directed at delivering care.  Perhaps the most frightening trend is the development of multiplexes of physician specialists that can dominate a medical community’s care and that embody behavior that even the most monopolist entrepreneurs would admire.

My wife, Eleanor Kinney, Hall Render Professor Emeritus of Law at Indiana University McKinney School of Law is an internationally recognized expert on this subject.  She sent me a couple of citations that expand on these themes.

For Profit Enterprise in Health Care:  Can it Contribute to Health Reform?

Eleanor D. Kinney

American Journal of Law & Medicine, 36 (2010): 405-435 © 2010 American Society of Law, Medicine & Ethics Boston University School of Law

The Corporate Transformation of Medical Specialty Care:

The Exemplary Case of Neonatology

Eleanor D. Kinney

Journal of law, medicine & ethics 790 health care • winter 2008