How to Handle the Physician Shortage

The primary goal of health care reform deals with providing health coverage for all Americans. Policymakers tell us that it will pay for itself, but with the influx of an estimated 40 to 50 million people who were previously uninsured and the baby boomer generation now becoming eligible for Medicare (some say at a rate of eight per second), who do these policymakers believe is going to take care of these patients?

The problem is one of basic economics: supply is simply not keeping pace with demand.

Supply

The physician shortage in the U.S. is not a new problem caused solely by health care reform. Twenty-two states and 17 medical specialty societies are already reporting shortages today, long before the 2014 influx under the provisions of the Patient Protection and Affordable Care Act. Aging and population growth have created a greater demand for physicians than ever before.

Family practice, internal medicine, and geriatric specialists will be the gatekeepers under the reformed system. These specialties require more knowledge in a broader spectrum of diseases than other specialty physicians, yet are paid less for these services. For those doctors choosing family practice, internal medicine or geriatrics as a career, it is often a social decision.

A large number of physicians, mirroring the rest of the population, are reaching retirement age. The American Medical Association (AMA) has reported that in 2017, more than 24,000 physicians will turn 63. The number of retiring physicians could be even higher if the economy rebounds and many who delayed retirement for financial reasons decide to retire.

For the fifth year in a row, family practice and internal medicine have topped the Merritt Hawkin’s recruiting and retention survey.

It has been noted that new physicians are:

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opting for higher paying specialties since student loan debt often exceeds $150,000

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opting to practice at hospitals and health care systems where better technologies are available

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d

esiring more flexible scheduling for family time and social activities

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desiring to live in high-population areas leaving vast areas of the U.S. underserved.

Also, the availability of residency slots is not keeping pace with the demand for new physicians and often residency slots for family medicine and internal medicine often go unfilled. A cap on Medicare-funded residency programs by the Balanced Budget Act of 1997 has not kept pace with needs. Also, there has been less availability of graduate medical education (GME) funding through state Medicaid programs

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The Patient Protection and Affordable Care Act does include a provision for redistribution of residency positions by the Health and Human Services (HHS) secretary if residency positions have been unfilled for three Medicare cost reporting periods. The slots, which appear to number approximately 600, will be redistributed giving preference to hospitals located in states with a low resident physician to population ratio; or with a large population living in primary care health professional shortage areas, rural hospitals, and urban hospitals with accredited rural training tracks

Need is driving the demand for primary care physicians. Groups and hospitals are rushing to form Accountable Care Organizations, patient-centered medical homes and other employment models, all of which are centered around the foundation of primary care.

As we moved to a managed care delivery system, the overriding belief was that good primary care promotes better outcomes and prolongs life. In many respects, it was a success since preventive care was added to coverage and patients began to think in terms of quality rather than quantity of care.

Moving to the next stage, most believe that it must better connect consumers to the health care system and that it must use information technology to better manage costs and patients.

Demand for services will continue to increase as the economy rebounds, resulting in more covered workers, and the baby boomer generation continues to attain Medicare coverage. And if the provisions of the legislation stay on track, there will be even more demand in 2014.

Varying solutions are being discussed.

Nationally, medical school enrollments have been flat over the past 20 years. Policymakers are calling for a significant increase in new physicians, recommending increases in medical school enrollments and increases in GME positions.

Signing bonuses, relocation expense reimbursement and medical education allowances remain standard in most physician recruitment incentive packages. Higher base salaries and productivity bonuses are slowly becoming the norm for family practice and internal medicine.

The 2009 stimulus package and health reform law have designated nearly $300 million for the National Health Service Corps to offer medical loans repayment to new physicians who practice in underserved areas.

Increase in reimbursements for family practice and internal medicine services are necessary to entice physicians to specialize in these areas.

Nurse practitioners and physician assistants can fill some of the void, along with non-U.S. trained physicians becoming eligible to practice in the U.S.

Shorten the training time for primary care physicians from an average of ten years to a more targeted education taking five to eight years by eliminating undergraduate majors and moving straight to medical curriculum and clinical training.

Expand the role of telemedicine as technology becomes more widely adopted by healthcare providers and patients.

There are no certain answers to the problem, but physicians have always been flexible and innovative. In conjunction with other players in the system, physicians themselves will be the ones with the right ideas and solutions.

Hayflich & Steinberg, CPA’s, PLLC is also a proud member of the National CPA Health Care Advisors Association (HCAA). HCAA is a nationwide network of CPA firms devoted to serving the health care industry. Members provide proactive solutions to the accounting needs of physicians and physician groups. For more information contact the HCAA at info@hcaa.com.

DemandWhat do we do?Beverly A. Miller, CPA, CAPPM , is Manager of Physician Services with Hayflich & Steinberg, CPA’s, PLLC and the current president of the National CPA Health Care Advisors Association. She has been heavily involved in practice startups, as well as aiding existing practices with billing issues, accounting issues, staff modeling and selection, project analysis, financial management, compliance issues, and tax planning. Beverly can be reached at (304) 697-5700.