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Letters

The Coming Physician Shortage

Of the seven perspectives published with our recent paper (Jan/Feb 02), noteworthy was the one by leaders of the Association of American Medical Colleges (AAMC), who believe that we offer convincing evidence of emerging physician shortages. Mary Mundinger concurred, although she favored an even greater role for advance practice nurses than we had modeled. These thoughtful reflections from leaders in medical and nursing education signal a sea change: no more giant surpluses; shortages are the issue. Other commentators raised interesting questions and concerns, but none offered any conceptual or quantitative alternatives to our projections. Our central conclusion about increasing physician shortages remains. The dialogue must begin now.

Several commentators raised concerns about "the market" being a determinant of physician supply, since patient-initiated purchasing decisions at the time of service are imperfect. Unlike the market for most other goods and services, health care spending depends not only on decisions at the time of service, but also on decisions made in advance, such as employees’ decisions to accept health benefits in lieu of wages, political decisions to expand Medicare, and community decisions to build health care facilities. Each decision is made cognizant of what is "affordable," and what is affordable relates back to some measure or perception of wealth such as per capita income or gross domestic product (GDP).¹ In 1967 Rashi Fein concluded that 85 percent of the growth in physician utilization could be accounted for by the direct and indirect effects of per capita income.² Like GDP, per capita income both underlies and serves as a proxy for the varied inputs. Therefore, there is value in using it to aggregate demand. No other indicator of comparable value exists.

Similarly, there is value in aggregating physicians as a head count rather than as full-time-equivalents (FTEs) engaged in particular tasks. Most planning exercises in the past sought absolutes, measured as FTEs, and all failed. Why? Quantifying physicians in this manner is difficult, and doing so means that demand must be similarly projected, which has proved to be impossible.³ Jonathan Weiner comments that "the track record of U.S. workforce policy has not been stellar," echoing earlier sentiments.⁴ On the other hand, approaches that relied on trends, as ours did, have done well.⁵ Earlier failures should not be taken as a mark against subsequent designs.

The brevity of our paper did not allow for much detail about the path connecting changes in GDP and physician supply, raising questions for some commentators. That path is spelled out more fully in previous and pending publications and flows as follows.⁶ As GDP (and per capita income) expand, a new-found sense of wealth enhances desire and creates a perception of possibility at various levels (individual, group, employer, community, political). Demand slowly increases and health care spending rises. The existing labor force responds, but over time more workers are trained and more international medical graduates (IMGs) migrate in. If pressure continues, medical schools expand. The lag between changes in GDP and changes in the number of physicians averages about ten years.

Some commentators suggested that changes in physician supply occurred not because of some "natural law" of economics, but because graduate medical education (GME) support attracted more IMGs to the United States and because incorrect population projections led Canada to add medical school places. In both countries, growth in physician supply fed a demand created by the economy. Had there not been an influx of IMGs in the United States or had population growth not slowed in Canada, current physician shortages would be even more severe.⁷

Morris Barer was critical of our use of the term demand because when an economy deteriorates and its GDP declines (as happened in Russia), "need" doesn’t fall, it rises. The observation is correct, but there is no inconsistency. Need (a medical term) does rise, but demand (an economic term) falls, because resources are insufficient. Similarly, "need" is great in sub-Saharan Africa, but "demand" is low because fiscal resources are sparse. What about the current U.S. recession? If it continues long enough, demand for medical services will certainly fall, despite increasing needs due to aging and poverty. However, if the recession is brief, it will simply be averaged in with other short-term oscillations. Such economic fluctuations are common, which is why the trends that we examined span several decades.

Several commentators suggested that it’s not the economy but physicians who determine spending—the old concept of "physician-induced demand."⁸ After thirty years of debating its merits, most economists have concluded that physician-induced demand is not of sufficient magnitude to warrant serious consideration in formulating policy.⁹ Nonetheless, it continues to influence analysts and, coupled with a belief that health care spending is bad for the economy, has spawned a policy of constraining physician supply to decrease health care costs.¹⁰ This logic, which originated in Canada in the 1970s, drifted south and became embedded in U.S. workforce policy.¹¹ Unfortunately, it ignores the reality that health care spending is not propelled by physicians but by a combination of human aspiration and economic potential. The health care sector is among the economy’s most vibrant. If the U.S. is ever to have a rational physician workforce policy, planners must move beyond the myth that demand is caused by physicians and that health care spending in proportion to GDP growth is detrimental to society.

A further obstacle to formulating rational policy is a lack of appreciation among some planners for what it is that specialists do. Various commentators assert, for example, that half of specialty care is inappropriate; that even when it is, it isn’t as good or as cheap as that provided by primary care physicians; that it’s an unnecessary luxury—"another gas-guzzling SUV" (per Kevin Grumbach) that, says Fitzhugh Mullan, specialists provide because they "follow the money." Some commentators also lament that additional specialists won’t decrease the ranks of uninsured nor improve health outcomes in the U.S., so why do we need so many anyway? Perpetuating the primary care–specialist schism and looking to specialists or physicians generally to solve systemic problems are not useful.

Do the trends that we have observed mean that "social planners are presumptuous" or that "the inevitability of the market belittles their efforts?" Not necessarily. But they do suggest that planners must be more mindful of societal dynamics, that the public’s perception of need should not be discounted. Yet, even as the California Medical Society warns of a "coming physician supply problem," Grumbach and colleagues proclaim that there are "more than enough." And even as the major Canadian medical organizations lobby for relief from "the stresses of physician shortages," Barer and Robert Evans cling to physician-induced demand and pursue tangential theories that divert attention from the reality that Canada’s workforce policies have failed.¹²

In sum, we believe that the AAMC’s leadership hit the nail on the head. The time for petty rhetoric and tired dogma has passed. The facts are upon us, and they are rather simple. Health care is an increasing portion of growing economies, and the demand for physicians bears a direct relationship to that process. If, as seems likely, the U.S. economy continues to grow, there will be an inescapable need for more physicians, principally specialists. Although Uwe Reinhardt is correct in cautioning against fixing on any "right" number, Ralph Snyderman and his AAMC colleagues squarely framed the alternatives: Oversupply is undesirable, but undersupply could have far more serious ramifications. Either additional physicians will have to be trained, or the spectrum of services that physicians now provide will have to be entrusted to others.

Richard A. Cooper and Thomas E. Getzen

Medical College of Wisconsin, Milwaukee, Wisconsin
Temple University, Philadelphia, Pennsylvania

NOTES

 

1. T.E. Getzen, "Health Care Is an Individual Necessity and a National Luxury: Applying Multilevel Decision Models to the Analysis of Health Care Expenditures," Journal of Health Economics 19, no. 2 (2000): 259–270[Medline]; and R.A. Cooper et al., "Economic Expansion Is a Major Determinant of Physician Supply and Utilization" (Unpublished manuscript).
2. R. Fein, The Doctor Shortage: An Economic Perspective (Washington: Brookings Institution, 1967).
3. Projections that were developed using models that depend on FTEs appear in the Graduate Medical Education National Advisory Committee, MReport of the Graduate Medical Education National Advisory Committee to the Secretary, Department of Health and Human Services, 1981 (Washington: U.S. Department of Health and Human Services, 1981); Council on Graduate Medical Education, Fourth Report: Recommendations to Improve Access to Health Care through Physician Workforce Reform (Washington: DHHS, 1994); R.M. Politzer et al., "Matching Physician Supply and Requirements: Testing Policy Recommendations," Inquiry (Summer 1996): 181–194; and J.P. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association 272, no. 3 (1994): 222–230. This approach is critiqued in R.A. Cooper, "Perspectives on the Physician Workforce to the Year 2020," Journal of the American Medical Association 274, no. 19 (1995): 1534–1543[Abstract]; R.A. Cooper, "Adjusted Needs? Modeling the Specialty Physician Work-force," American Association of Neurological Surgery Bulletin 9, no. 1 (2000): 13–14; and R.A. Cooper et al., Evaluation of Specialty Workforce Methodologies (Washington: COGME, Health Resources and Services Administration, 2000).
4. E. Ginzberg, "Physician Supply in the Year 2000," Health Affairs (Fall 1989): 84–90; and U.E. Reinhardt, "Health Manpower Forecasting: The Case of Physician Supply," in Health Services Research: Key to Health Policy, ed. E. Ginzberg (Cambridge, Mass.: Harvard University Press, 1991).
5. Cooper et al., "Economic and Demographic Trends." Trends also were the focal point of analyses by W.B. Schwartz, F.A. Sloan, and D.N. Mendelson, "Why There Will Be Little or No Physician Surplus between Now and the Year 2000," New England Journal of Medicine 318, no. 14 (1988): 892–897[Abstract]; and by R.A. Cooper, "Seeking a Balanced Physician Workforce for the Twenty-first Century," Journal of the American Medical Association 272, no. 9 (1994): 680–687.[Medline]
6. T.E. Getzen, "Forecasting Health Expenditures: Short, Medium, and Long (Long) Term," Journal of Health Care Financing 263, no. 3 (2000): 56–72; Getzen, "Health Care Is an Individual Necessity"; and Cooper, "Economic Expansion."
7. R.A. Cooper, "There’s a Shortage of Specialists: Is Anyone Listening?" Academic Medicine (forthcoming); and P. Sullivan, "Concerns about Size of MD Workforce, Medicine’s Future Dominate CMA Annual Meeting," Canadian Medical Association Journal 161, no. 7 (1999): 561–562.[Free Full Text]
8. For the origins of the concept of physician-induced demand, see R.G. Evans, "Supplier-Induced Demand: Some Empirical Evidence and Implications," in The Economics of Health and Medical Care, ed. M Perlman (London: Macmillan, 1974); and V. Fuchs, "The Supply of Surgeons and the Demand for Operations," Journal of Human Resources 13, Supp. (1978): 35–56.[Medline]
9. D. Dranove and P. Wehner, "Physician-Induced Demand for Childbirths," Journal of Health Economics 13, no. 1 (1994): 61–73[Medline]; U.E. Reinhardt, "Parkinson’s Law and the Demand for Physicians’ Services" (Comment on "Competition among Physicians" by Frank Sloan and Roger Feldman), in Competition in the Health Care Sector: Past, Present, and Future, ed. W. Greenberg (Germantown, Md.: Aspen, 1988); R. Feldman and F. Sloan, "Competition among Physicians Revisited," Journal of Health Politics, Policy and Law 13, no. 2 (1988): 239–261[Medline]; and J.P. Newhouse, "Medical Care Costs: How Much Welfare Loss?" Journal of Economic Perspectives 6, no. 3 (1992): 3–21. [Medline]For a more complete discussion of the limited applicability of supplier-induced demand, see S. Folland, A.C. Goodman, and M. Stano, The Economics of Health and Health Care (Upper Saddle River, N.J.: Prentice-Hall, 2001), 204–216.
10. For arguments about why health care spending may not be detrimental to the economy, see U.E. Reinhardt, "Health Care Spending and American Competitiveness," Health Affairs (Winter 1989): 5–21; M.V. Pauly, "U.S. Health Care Costs: The Untold True Story," Health Affairs (Fall 1993): 152–159; and M.V. Pauly, "When Does Curbing Health Care Costs Really Help the Economy?" Health Affairs (Summer 1995): 68–82.
11. Evans, "Supplier-Induced Demand";; M.L. Barer, R.G. Evans, and R.J. Labelle, "Fee Controls as Cost Control: Tales from the Frozen North," Milbank Quarterly 66, no. 1 (1988): 1–64[Medline]; K. Grumbach and P.R. Lee, "How Many Physicians Can We Afford?" Journal of the American Medical Association 265, no. 18 (1991): 2369–2372[Abstract]; S.A. Schroeder and L.G. Sandy, "Specialty Distribution of U.S. Physicians—The Invisible Driver of Health Care Costs," New England Journal of Medicine 328, no. 13 (1993): 961–963[Free Full Text]; R. Labelle, G. Stoddart, and T. Rice, "A Re-Examination of the Meaning and Importance of Supplier-Induced Demand," Journal of Health Economics 13, no. 3 (1994): 347–368[Medline]; and COGME, Third Report, Improving Access to Health Care through Physician Workforce Reform: Directions for the Twenty-first Century (Washington: DHHS, 1992). For a further discussion of the use of economic reasoning to formulate restrictive physician workforce policy, see R.A. Cooper and L.H. Aiken, "Human Inputs: The Health Care Work-force and Medical Markets," Journal of Health Politics, Policy and Law 26, no. 5 (2001): 925–938.[Medline]
12. Cooper, "There’s a Shortage of Specialists"; COGME, Fifteenth Report, Financing Graduate Medical Education in a Changing Health Care Environment (Washington: DHHS, 2000); California Medical Association, And Then There Were None: The Coming Physician Supply Problem (San Francisco: California Medical Association, 2001); D. Dower et al., The Practice of Medicine in California: A Profile of the Physician Workforce (San Francisco: University of California, Center for the Health Professions, 2001); Canadian Medical Forum Task Force on Physician Supply, Physician Workforce, 2001, <www.cma.ca/advocacy/taskforce/summary.htm> (15 December 2001); Barer, "New Opportunities"; and R.G. Evans, "New Bottles, Same Old Wine: Right and Wrong on Physician Supply," Canadian Medical Association Journal 158, no. 6 (1998): 757–759. [Medline]Canada’s failed workforce policies are chronicled in Sullivan, "Concerns about Size of MD Workforce";; H. Scully, "Canada’s Specialty Care System: The Need for Urgent Reinvestment and Rejuvenation," Hospital Quarterly (Fall 2000): 35–37; J.K. Iglehart, "Revisiting the Canadian Health Care System," New England Journal of Medicine 342, no. 26 (2000): 2007–2012[Free Full Text]; and J.G. Wade, "Investment for Health and the Contribution of Clinical Care: A Canadian Perspective," in What Determines Health and Quality of Life? Health As Good Economics, ed. E.R. Rubin (Washington: Association of Academic Health Centers, 2001), 61–64.

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