Will We Have Too Few Physicians or Too Many?

With the healthcare law still moving forward, one can expect that eventually another 30 million or so patients will be eligible to make an appointment to see a physician. An obvious conclusion that one might draw is that we are going to need a lot more physicians. That conclusion would be true if we had a physician shortage now, or that we were using our existing roster of doctors efficiently. There seems to be a number of people willing to dispute both of those conditions.
A physician, Dennis Gottfried, posted an article in which he argued that we had enough doctors, but they were of the wrong kind. What we need are more primary care doctors and fewer specialists.

"More primary care doctors will be needed to direct much of that care. Along with the expanding patient pool, there has evolved a changed American mindset concerning the role of primary care. This transformation is based on the realization that a primary care based medical system both controls medical costs and improves quality of care far better than a specialist based system."

There does seem to be agreement with Gottfried’s statement about working through a primary care doctor as being more cost-effective and providing better health outcomes. I found one curious reference to a 1998 paper that concluded that patients who turned over their primary care responsibilities to specialists were more likely to die, and they would be charged 30% more for that service.

Gottfried then proceeds to make this claim:

"For, although we have a primary care doctor shortage, we do not have a total physician shortage. The present concentration of physicians in the U.S., 29 doctors per 10,000 people, compares favorably with most countries and is considerably higher than many countries, like Japan, Canada, New Zealand, and the United Kingdom, that are generally regarded as having better health care systems than the U.S. Other countries with worse health care systems, like Bulgaria, Azerbajin, and Kazakistan, have even higher physician concentrations than the U.S. So the concentration of physicians in the overall population bears only a weak correlation with the quality of medical care. Attempting to increase our physician concentration avoids addressing the real problem: an overspecialized physician population."

The World Bank tallies the number of physicians per thousand people for a variety of countries.

Gottfried again appears to be correct. The density of doctors in a country seems to have little correlation to healthcare outcomes or costs.

Gottfried then pictures an ideal distribution of physicians:

"An ideal health care system consists of 70% primary care doctors -- internists, family physicians and pediatricians -- and 30% specialists. Unfortunately, America has it backward-70% specialists and 30% primary care. This overspecialization results in needless tests and procedures and compromises quality."

This database provided by the Kaiser Foundation claims that we actually have, as of May, 2012, 804,188 physicians, of which 384,916 are in primary care, and 419,272 are specialists. Gottfried may have his ideal model correct, but this data indicates that we have not drifted as far afield as he claims.

Implicit in Gottfried’s argument is the conclusion that primary care physicians are using their time and skills efficiently—consequently we will need more. But is this conclusion correct? Perhaps not.

Uwe E. Reinhardt addresses the issue as an interested economist. He published an article in the New York Times titled From Physician Glut to Physician Shortage. Being an academic he has a number of studies to refer to that address the issue of physician supply.

"Forecasters looking at the health work force have never reached a consensus on the ideal physician-population ratio for this country."

"Indeed, widespread worries over a looming physician shortage are a relatively new phenomenon. They come at the time when experts are also lamenting an ‘epidemic of overtreatment’ of patients, said to cost America $210 billion a year."

"Throughout the 1980s, however, and until the late 1990s, the dominant narrative among experts on the American health work force was that, with the exception of primary care physicians, the United States faced a large overall future physician surplus. There were only a few demurrals from that dominant narrative."

Reinhardt suggests that doctors will not be utilized in the same fashion in the future as they have been in the past.

Doctors who end up participating in the Accountable Care Organizations (ACOs) called for in the healthcare legislation will benefit from having many administrative functions eliminated. They will also see their activities subjected to a cost efficiency analysis that is likely to minimize their participation in tasks that could be performed by less skilled workers. Doctors should be able to accomplish more in less time.

"Professor Weiner noted that, in 1992, well-managed, clinically integrated, staff- or group-model health maintenance organizations that were compensated by prepaid capitation (an annual lump-sum fee per patient) required an average of only about 120 or so physicians per 100,000 enrollees, while the overall ratio of patient-care physician per 100,000 population in the United States was as high as 180."

Reinhardt references a study that was performed in 1994 under the assumption that 40-60% of the population would be involved with a medical organization equivalent to an ACO.

"Professor Weiner projected that the demand for and supply of primary care physicians would be more or less in balance in 2000, but that the supply of specialists would exceed the demand for them by more than 60 percent (a projected surplus of 165,000 physicians)."

This study and the data referenced indicate that the potential for gains in efficiency is enormous.

If we can be more efficient in the future, then the implication is that we are inefficient now. Reinhardt could not resist invoking Parkinson’s Law.

"According to Parkinson’s Law, "work will expand to fill the time available for its completion." In medicine, its manifestation is feared to be the overtreatment of patients – sometimes harmful – even though individual physicians may sincerely believe that more care implies superior quality of treatment."

He admits that the issue is beyond the ability of economists to discern unequivocally such an effect.

"The data available at the empirical level does not allow economists to distinguish between health care actively demanded by patients and health care passively accepted on the doctor’s recommendation, nor between services prescribed by doctors in good conscience and those rendered mainly to shore up doctors’ incomes."

On the other hand, policy makers and administrators who deal with physicians most directly seem to be of a unanimous opinion.

"Policy makers in the real world, however, seem to have no doubt that Parkinson’s Law applies to medical practice, as well. Consequently, they prefer paying physicians by annual capitation or bundled payments instead of ‘inflationary’ fee-for-service, and they often seek to impose global budgets on physicians."

With a little luck, our healthcare system will become considerably more cost effective and produce better health outcomes. Physicians will earn less income, but they will have a more rewarding life in return. And we will all live happily ever after.