"Looming Physician Shortage" is Nonsense

You may have heard the rumors an "impending physician shortage". Dr. Richard Cooper from Wisconsin calculated that we will need 80-100.000 physicians more in 15 years, and is spreading alarming news about a "looming physician shortage". He recommends that we should enroll more students in medical schools, found new medical schools and expand existing residency programs and create new programs.

I disagree with the notion of physician shortage that resulted from Dr. Richard Cooper's study. I suspect the numbers and basic assumptions are wrong.

There is no shortage now. While we had 1.6 physicians per thousand Americans in 1970 (500.000 physicians total), in 2000 we had 2.4 physicians per thousand (over 800,000 physicians) and presently we have an average of 2.6 physicians per thousand Americans. Despite population growth, the ratio of physicians to patients has grown, has improved. Our present system of education is actually increasing the number of physicians per 1000 Americans.

In addition, in my opinion we have an oversupply of physicians since the 1980s. Here is why: I repeat: The cost of any service is determined by supply and demand.This is so simple that most people forget it, although the sudden rise of gas prices after hurricane Katrina should have reminded everybody. Physician earning power has dropped to about 1/3 of what it was in the mid eighties.

One example from my area: 20 years ago an ObGyn in Boston earned about 400 K and a very nice home in the best area of Boston cost about 400K. Nowadays the very same house costs 1.6-2 million and the same ObGyn (working a lot harder and seeing about twice the number of patients) earns 200K. Physician income has dropped dramatically. And that means that we have an oversupply of physicians. And we have an oversupply since the 80's. No study required. You have been reading about continuous and seemingly unstoppable decreases in reimbursements for physicians. Is that a sign of a balance between supply and demand? No, It is a sign of oversupply.

This means that Dr. Cooper is wrong in assuming that the present situation is "balanced" or "neutral". The present situation is not the "normal level", it is a level of oversupply.

There is no good way of planning physician supply. Who knows what will happen tomorrow and how it will impact physician supply and demand? Maybe we will find the gene for motivation to exercise or the gene for weight and obesity and the manipulation of that gene will make all the heart diseases shrink to 5% of what they are now?

When considering prediction for the future, do you remember what 60's thought the cars of the future were going to look like? There were pictures of large ship like cars with fins, rotating seats, driving fully automatically... which is just what we have now - right? That is how well predictions about the near future work, even if they are made by qualified people.

Dr. Cooper, the author of the unfortunate study, who now is making a living off the buzz around "physician shortage", did not foresee ...

1. The "minute clinics" that are sprouting like mushrooms in CVS stores, Walmarts etc all over the country. The numbers of patients seen in these clinics are rising rapidly and the number of visits are already reaching millions. These clinics, operating under the slogan "you are sick, we are quick", are rapidly gaining in acceptance, and not only the number of visits to these clinics are growing, but also the average payment per visit. The customer satisfaction is on par with the satisfaction in physician offices. These clinics will be a tremendous competition to physicians, or, in the eyes of Dr. Cooper, a "relief" of the "shortage ". The development and growth of these clinics alone may prove Dr. Cooper wrong.

2. Dr. Cooper did not foresee or consider telemedicine. Indian physicians are already reading numerous x-rays, CTs and ultrasounds at night, due to the fact that our nighttime is daytime in India. This trend will expand, since Indian labor is cheaper, and soon we will have a decreasing need for radiologists.

3. There are large numbers of very well trained and very competent physicians in Central Europe (Germany, United Kingdom, France, Spain and Italy) that could transition to the US. These physicians would only need residency training. They would not need medical school. The cost savings for the US would be dramatic and these physicians would be available much faster than physicians newly schooled and then trained in the US.

4. If, yes, if there really, really, truly more demand for health care providers it would be much more economical to train more nurse practitioners and physician assistants, who are very well suited to take care of routine cases. Physicians would diagnose and treat the more unusual and difficult cases.

And, training more physicians is very expensive. Physicians create their own demand, even if Dr. Cooper denies it. Every physician works to fill his or her practice, even if it is with minor issues. Young, unexperienced physicians are more expensive than experienced physicians, since they order more tests, since they need more diagnostic procedures to reach the same diagnostic goal than experienced physicians. American taxpayers would be punished with the extra expense of additional unneccessary medical schools and training programs and Medicaid contributions. The strain on Medicaid and Medicare would accelerate.

Overall, I seriously doubt we can reliably foresee the demand for physicians in 15-25 years and prefer to go with Yogi Berra's statement "predictions always are difficult, especially about the future". I do not see a shortage now and I see easy relief for any kind of "shortage" that may (or may not) present itself in the future.

Dr. Cooper's statements are extremely damaging for physicians and should be re-evaluated. This should be done before the present oversupply of physicians is worsened and perpetuated by creating more unnecessary and very expensive and costly medical schools and residency programs.

Who benefits from this alarming rumor? Who makes money from it? Guess who - the HMOs.HMOs make money by withholding payments, delaying payments and by lowering reimbursements. This is only possible because they can rely on a large number of physicians that have to put up with these shenanigans, because they do not have alternatives to the current HMO contracts and payment methods (or better witholding-payment methods). The HMOs exist only because of physicians need to contract with them. Physicians only need to contract with HMOs under the present conditions because there is an oversupply of physicians.

A very good example of this, and proof of my opinion is the comparison between Massachusetts and Oklahoma.
Massachusetts has the highest density of physicians per 1000 Americans - 4.3 and Oklahoma has the lowest density, 1.6 (only Louisiana is lower at 1.5).
The income of a primary care physician after residency in MA is arouond 120K, the income of a primary care physician in OK is 250K. No difference in training, no difference in work, just a difference in HMO contracts. Suprisingly, I have never heard news of a physician shortage in Oklahoma, but I hear complaints about "primary physician shortage" in Massachusetts. Even sophisticated colleagues wonder in public how we can have a shortage while reimbursemnents are going down. Dear colleagues - you are right to wonder, we just don't have a shortage as long as reimbursements go down, wake up, it's rumors and whining, not true shortage.

So, what does that tell you. We supposedly have a shortage in Massachusetts,in a state with the highest density of physicians, but not in Oklahoma, where we have the lowest density.

What I conclude from this is: Demand for physician services has a subjective component.

What would happen if we actually would even have a balance of physician supply or even a mild undersupply? Physicians would be busy enough to "fire" their most abusive, payment-delaying, under-reimbursing HMO and simply stick with the HMOs that pay a little more realistically.
Good for us, bad for the abusive, greedy, bottomline oriented HMOs.

Oh, you say this is "hyperbole"? Well, read the lawsuits that were decided in favor of physicians that clearly find that HMOs routinely underpay and try to cheat physicians out of their money using multiple tricks. It is a fact, not hyperbole.

It would be a disaster for HMOs if physicians could demand better payments. The future of HMOs depends on the ability to have a large supply of physicians, an oversupply of physicians, willing to work for less and less. Actually, the future of HMOs is at stake here. What do YOU want to do about it?