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Physician Shortages in the U.S.: Disentangling Myth, Folklore, and Fact

Much of the public media and even a substantial part of the medical literature operates on the assumption that there is a shortage of physicians in the U.S., including those specializing in primary care, intensive care, and surgery.  One study, for example, estimated that the physician shortfall in the U.S. would reach 90,000 by 2025.[1]  Another study estimated a 46% shortage of intensivists by 2030.[2]  Shortage estimates like these are based mostly on assumptions of ongoing population growth, the increasing role of quality improvement standards and guidelines, and, more recently, the influx of newly insured individuals as a result of the Affordable Care Act.

Physician-Shortage-blog-pic1-300x300A large proportion of medical research devoted to the topic of the perceived U.S. physician shortage begins with the assumption that there is currently a shortage or that one will exist by a certain year.   However, the concept of a shortage is a somewhat complex area within the field of economics.  A shortage occurs when the demand for a particular occupation exceeds the supply of individuals who have the appropriate training and are available for employment in the sector in which there is a shortage.  This is generally considered a “short run” problem because the shortage results in increased wages, which then attracts more individuals into the occupation.  However, what makes this theory more complicated is that shortages are essentially a “moving target.”  In industries with relatively rapid technological change, supply can be increased without adding individuals.  In addition, the same technological change can affect demand by changing the menu of product and service offerings.

The practice of medicine, and the health care industry more generally, is one of the most innovative of all U.S. sectors of the economy.[3, 4]  Within many therapeutic areas, treatment patterns in 2015 only vaguely resemble those from only a decade prior due to rapid technological change and innovation.  This type of change can “increase” the supply of physicians by increasing the amount of output that each physician can generate, on average.  On the demand side, the same technological advances have reduced the demand for more invasive procedures and increased the demand for less invasive and more expedient outpatient care.[5]  In recent years there has also been important innovation in preventive care, the process of care (including primary and intensive), and demand management by third-party payers, all of which have had an impact of demand.

Given these supply and demand attributes, it seems premature to conclude that there exists, or will soon exist, a physician shortage in the U.S.; there are many important supply and demand variables to consider in order to make any meaningful conclusions regarding shortages.  Nevertheless, casual assumptions about imminent physician shortages continue to be a prominent part of the literature on the medical workforce.

Even with improvements in overall access to care, several post-ACA studies have estimated that the effect of the ACA on the demand for health services will be modest.  For example, Glied and Ma (2015) calculated state-level estimates of the increased demand for physician and hospital services that is expected to result from expanded access attributable to the ACA.[6]  They estimated that primary care providers will see, on average, 1.34 additional office visits per week, accounting for a 3.8% increase in visits nationally. In addition, they estimated that hospital outpatient departments will see, on average, 1.2 to 11.0 additional visits per week, or an average increase of about 2.6% nationally.  They conclude that “increases of the magnitude likely to be generated by the Affordable Care Act will have modest effects on the demand for health services, and the existing supply of providers should be sufficient to accommodate this increased demand.”[6]

 

-John Schneider, PhD & Cara Scheibling

http://www.avalonecon.com

  1. McCarthy, M., Report predicts US physician shortage could exceed 90,000 by 2025. BMJ, 2015.350: p. h1296.
  2. Sarani, B., et al., The burden of the U.S. crisis in the surgical critical care workforce and workflow.Am Surg, 2015. 81(1): p. 19-22.
  3. Cohen, A.B., Biomedical Innovation and the Development of Medical Technology, in Technology in Americal Health Care: Policy Directions for Effective Evaluation and Management, A.B. Cohen and R.S. Hanft, Editors. 2004, The University of Michigan Press: Ann Arbor, MI.
  4. Burns, L.R., ed. The Business of Health Care Innovation. 2005, Cambridge University Press: Cambridge, UK.
  5. Cullen, K.A., M.J. Hall, and A. Golosinskiy, Ambulatory Surgery in the United States, 2006. National Health Statistics Reports; no 11. Revised., in National Health Statistics Reports2009, U.S. Centers for Disease Control and Prevention: Hyattsville, MD.
  6. Glied, S. and S. Ma, How will the Affordable Care Act affect the use of health care services? Issue Brief (Commonw Fund), 2015. 4: p. 1-15.

John Schneider

Dr. Schneider was one of the founding partners of the Health Economics Consulting Group, LLC (HECG) which merged with Oxford Outcomes in 2009. Since that time Dr. Schneider has served as Senior Director of the U.S. health economics operations of Oxford Outcomes, which in recent years has included facilitating integration between Oxford Outcomes and ICON plc. He started Avalon Health Economics in 2013 by bringing together the consulting practices of several industry and academic colleagues, building on what he started with HECG in 2004. Prior to starting HECG Dr. Schneider was on the faculty in the Department of Health Management and Policy and the Department of Economics at the University of Iowa. His PhD is in Health Services and Policy Analysis from the University of California Berkeley, with a concentration in health economics. He has over 25 years of experience studying economic and organizational aspects of the health care industry, including professional appointments at the Center for Health Economics Research (Waltham, MA; now part of RTI International), and the California Association of Health Plans (Sacramento, CA).Dr. Schneider has also served as a consultant to managed care organizations, state health departments, trade associations, medical device manufacturers, large pharmaceutical companies, and others. He has also served as an expert witness in several legal proceedings. Dr. Schneider’s expertise include analysis of medical care costs, health insurance and managed care, regulation, hospital competition, specialty hospitals, physician ownership, outcomes research, technology assessment, process change, and insurer-provider contracting. Some of his research has been published in Medical Care Research and Review, International Journal of Healthcare Finance and Economics, Tobacco Control, Health Economics Review, Health Affairs, Inquiry, Health Services Research, Review of Industrial Organization, International Journal of Technology Assessment in Health Care, American Journal of Medical Science, Prevention Science, and Health Care Financing Review. He is co-author of The Business of Health (AEI Press, 2006).

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