Provider Supply of Physicians in the United States

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Please refer response below, which is also attached, as well other supporting documents. This is an interesting, complex and somewhat controversial topic, indeed. Some argue that there is a surplus of physicians, while others argue that there is an upcoming shortage. Likewise, some argue that an increase in IMGs into the US healthcare system is a positive thing (i.e., the shortage opponents), while others argue for the need to limit entry into the medical schools (i.e., surplus opponents). Likewise, no-one seems to agree about the likely impact of managed care of long-term supply of healthcare providers.

RESPONSE:

1. Is there a surplus of physicians in the United States?

This is a very interesting debate, and somewhat controversial, which the excerpt below addresses.

"During most of the 1990s the common wisdom was that physicians were being produced in numbers far greater than the demand for medical care in the U.S. could support. Organizations as prestigious as the Pew Commission and the Institute of Medicine have said that the supply of physicians would greatly exceed the need by the year 2000. They have recommended that as much as 20 to 25% of the physician-generating capacity of the country should be cut. Several other researchers produced studies demonstrating an impending oversupply. While still other researchers disputed those studies, the media and organizations such as the American Medical Association seemed to support the view of a physician surplus.

In 1999, a major study of the future demand and supply of physicians in Florida and in the country as a whole was commissioned because of the perceived need to produce more primary care physicians for underserved areas of Florida. The study was done by MGT of America, a higher-education consulting firm based in Tallahassee, Florida. This research examined many of the earlier studies of physician supply and demand, which predicted a physician surplus and concluded that some of their underlying assumptions were flawed. The MGT of America study projected that the supply of physicians in 2000 would be only slightly greater than the demand. More importantly, it found that physician shortages would become evident by 2002 and become increasingly problematic until at least the year 2020 when the annual shortage could be as much as 12,000 physicians (http://www.nejmjobs.org/rpt/rpt_article_5.asp)

How Managed Care and Changing Physician and Patient Demographics Affect Physician Supply and Demand? One of the key assumptions in several studies was that managed care in the future would reduce the demand for physicians. An often-quoted study, conducted by J.P. Weiner in 1994, estimated that on the basis of managed care staffing models there would be a surplus of 165,000 physicians by the year 2000. Later research showed that while managed care reduces the use of hospitals, it actually increases the use of physicians". (David M. Cutler and Louise Sheiner).

A major trend in physician demographics over the past decade or more has been the remarkable increase in the numbers of women entering medicine. In the academic year 2000-2001 nearly 46% of the incoming first year medical students were women. While the numbers may have been recognized, the differences in their work style and career patterns have not been seen as the supply and demand issue they represent. The MGT of America study contains this quote: "Increasing numbers of female physicians who, because of child bearing and family responsibilities tend to work fewer hours per year, may result in the need for more physicians to satisfy a given demand." It would appear that a continued increase in women entering medicine should be recognized as a major factor in the entire physician supply equation, requiring more study.

In the MGT of America study, another factor loomed even larger as a misunderstood issue in physician supply. That factor is the aging of America's medical workforce. Earlier studies clearly did not appear to adequately account for the large numbers of physicians approaching retirement age. Keeping in mind that U.S. medical schools graduate just over 18,000 new physicians per year, MGT of America projected that in the year 2000 over 14,000 physicians would be lost to retirement and death. That number increases steadily and dramatically until 2020, when it is projected that over 23,000 physicians will retire or die. Even a cursory look at the numbers of physicians in the upper age brackets shows more than 250,000 physicians over the age of 55, and of those, more than 125,000 are over 65 years of age. (Source: http://www.nejmjobs.org/rpt/rpt_article_5.asp).
Another understated reason for projecting a physician shortage in coming years is the rapid aging of the U.S. population in general. It is well known that patients over the age of 65 require substantially more direct physician care than do younger patients. Studies show that in 1997, 12.7% of the population was over age 65. In 2020 that number is projected to be 16.5% and in 2030 it is projected to be 20.0%. That will take the population over age 65 from about 34 million people in 1997 to an estimated 60 million by 2020..

One of the key assumptions in several studies was that managed care in the future would reduce the demand for physicians. An often-quoted study, conducted by J.P. Weiner in 1994, estimated that on the basis of managed care staffing models there would be a surplus of 165,000 physicians by the year 2000. Later research showed that while managed care reduces the use of hospitals, it actually increases the use of physicians. (David M. Cutler and Louise Sheiner, 1997)

A major trend in physician demographics over the past decade or more has been the remarkable increase in the numbers of women entering medicine. In the academic year 2000-2001 nearly 46% of the incoming first year medical students were women. While the numbers may have been recognized, the ...