The Simple Solutions to Potential Phyisican Shortages

The December 17 issue of Business Week had a provocative headline—The Coming U.S. Doctor Shortage: Health-care reform will mean 30 million more patients—and bigger crowds in waiting rooms. I thought the positioning of this piece played into the 'fear of health care reform' camp that looks at the nation's health as a zero sum game. If you give minimal coverage to all, the rest of us with insurance will suffer. But the piece did raise some interesting points:

• In 1997, lawmakers placed a cap on the number of medical residencies in order to contain costs under Medicare, which pays for most of these training slots.Medicare pays $100,000 a year per residency, at a total cost to the program of about $9 billion. The funding began in 1965 when the U.S. was preparing to extend government health coverage to 19 million elderly Americans. As the Medicare rolls grew—to 45 million by the end of 2008—a cap was placed on the number of medical residencies to control spending.
• According to the U.S. Department of Health and Human Services, last year there were nearly 17,000 fewer primary-care doctors than needed in inner-city and rural areas. The Association of American Medical Colleges predicts that by 2025 there will be a shortage of as many as 159,300 doctors.
• An amendment to the health-care reform bill—proposed by Senate Majority Leader Harry Reid (D-NV), Charles Schumer (D-NY), Bill Nelson (D-FL.)—would add 15,000 residencies at a cost to Medicare of about $1.5 billion to anticipate and prepare for this shortage

What caught my attention in the article was this handy chart—showing the growing demand for services and the almost-flat supply line. I believe we can flatten the demand line for physicians and increase the supply line with just a few policy changes.

On the demand side, if we encourage individuals to take more control of their own health care, demand for physician time will decline. There are also a variety of technological substitutions for physician office visits and an array of non-physician health professionals that can fit the bill.


On the supply side, there are two major ways to enhance supply. First, use technology to increase physician productivity—less paperwork, e-health to extend reach, and more. The other way is to pay primary care physicians more. Payment policies have favored procedure-oriented specialists—and the physician’s choice of specialties reflects this.