Why There Is Still A Physician Shortage In Rural America
This originated as a reply to a comment on this thread, but it’s worth promoting. Here is the original comment by Layton Lang:
Your article is somewhat off base. First you are describing an industry that does not follow typical free- market cycles. This industry is heavily subsidized (Government 50%) by the government and private insurance companies. Second, the government has been steering financial incentives to primary care physicians in the form of higher payments. Many of the E/M billing codes , primary care physicians bill have experienced rate increases as opposed to specialty billing codes being reduced. Third, many of the physicians are not strapped with debt coming out of school because hospitals pay off their education obligations when they hire them (employment package).
Moreover, I do agree with your comparison to the IT field. This is exactly what is happening in the medical industry today. The deficit of primary physician graduating from medical school is being corrected by foreign born- foreign trained physicians, use of mid-level providers, physicians learning to be increasingly productive in seeing more patients, and patients being treated in foreign markets through medical tourism. In sum, the healthcare field will continue to adapt to the changes in physician labor just like the IT sector did. All of the rhetoric about physician shortages is untrue. The basic issue is that the physicians are not geographically distributed across the country evenly.
Consequently, in the urban markets, the surplus of physicians is so great, it is the number one reason the country is experiencing high healthcare inflation. Physicians competing for fewer patients cause them to over treat patients to increase net income margins per visit.
Layton
You are correct that the industry does not follow typical free market cycles. There are three tiers of payment: Medicaid, Medicare and Private Pay (private insurance). According to this link, Medicaid reimbursement compared to Medicare varies from 36% in New York to 140% in Alaska for primary care. Medicare also determines what private insurers pay because insurance companies base physician payments on Medicare calculations (the resource based relative value scale (RVU)) using a base unit set by Congress. In effect Medicare sets reimbursement rates for both Medicaid and private insurance.
This base unit has been criticized for favoring specialty procedures over primary care. While the proposed Affordable Care Act (known lovingly here as Obamacare) promises to increase Medicaid reimbursement rates up to Medicare rates, it does not specify changes to the RVU that favors specialty codes over primary health codes, nor does it rule out lowering Medicare payments to “lower the bar” to allow medicaid to reach parity. Since Obamacare promises to trim physician reimbursement (Medicare Part B) by $187 billion over the first 10 years, Medicare will be cut and I suspect the “bar lowered.” Obamacare sweetened the deal (although it didn’t have to – the AMA supported the legislation) by allowing temporary rate increases reimbursements to primary care physicians, but a 10% increase only means bumping New York to 40% of Medicare – and private payers still trump all. Neither will it buck the trend of declining reimbursements across for all physicians.
My Wife is a primary care physician in an area designated as HPSA. She has received a very generous debt repayment package by all standards. But this package is taxable and lasts for 5 years – roughly a third of the time it will take to pay off her loans. Debt repayment is not the same as debt forgiveness; the principle decreases with forgiveness – not so with repayment – so repayment is the norm. The only groups that provide debt forgiveness are the Indian Health Service and the US Military, and IHS opportunities are limited. Is the debt manageable? Perhaps but it does what debt always does: it limits options. My wife would like to volunteer her services for more than the 3 weeks vacation she gets per year, but cannot afford to due to the debt.
I worry about the use of midlevels. I have heard stories of nurses making decisions about care and medications that would make a malpractice attorney salivate. 90% of the time the midlevels get away with it, but 10% of time an error is made and someone suffers. Of that 10% a only a tiny sliver becomes a malpractice case, but my guess is that the number of these cases will grow as health care providers push more work onto the shoulders of midlevels. Having received spaghetti code from India that took my team months to unscramble, eating the cost of the predicted savings of sending the code abroad and then some, I shiver when I consider what would happen if my son was treated by a lightly-trained RN or PA. No one is killed by bad code, but people die from bad medical decisions.
While the medical field can learn much from IT in terms of technology, the fields are inherently different. Software can be designed using best practices. It can be tested empirically. When it fails it can be redesigned. Medicine cannot be done in the same way. No two patients are alike; the human body is much more complex than any System designed by a team of software engineers. And while 99% of the time an upset stomach is just that, 1% of the time it could be indicative of Barrett’s Esophagus, which untreated can lead to lethal esophageal cancer.
The rest of what you say should work in theory – that the better compensation in health professional shortage areas should draw physicians away from the cities where the reimbursements are lower, but after 2 years here I can see that this is not the case. The main problem is that these HPSA areas have a higher Medicaid percentage than the urban areas, and physician practices have a higher Medicaid mix than their urban counterparts.
According to a 2003 report in JAMA, (I’d kill for a more recent statistic) family care physicians work an average of 52.3 hours per week for an average salary of $135,000. That translates into $54.66 per hour – compared to orthopedic surgeons who pull in $121.06 or dermatologists who make $105.59. And there is never an after hours derm emergency. Add in the fact that rural life isn’t desirable for most young people, and it will take pumping a lot more money into the system to encourage residents to pursue primary care in rural areas.
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