Are We About To Face A Severe Doctor Shortage?

“No, there won’t be a doctor shortage,” wrote Zeke Emanuel and Scott Gottlieb in The New York Times the other day.

ObamaCare will weather that challenge just fine. How? Nurses and other paramedic personnel can substitute for physicians and new technology is making remote monitoring of patients easier than ever before.

All that is true. But those changes are likely to happen slowly; and even if they happened quickly, I’m afraid that it won’t be enough.

Here’s why. Two features of ObamaCare will substantially increase the demand, while (surprisingly) nothing in the law increases supply. And when people take steps to increase their access in response to growing waiting times, the success of some will increase the rationing problems for everyone else.

At this point we have no idea how many people will become newly insured under ObamaCare. For the first year out, the number of people with insurance may actually go down! But the administration’s goal is to insure an additional 30 million people and eventually a lot of those people will acquire health plans. When they do, the economic studies predict that they will try to double their use of the health care system.

Adding to this increased demand will be new mandated benefits. The administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Then there are new benefits for women, including free contraceptives. And all of us will be entitled to a long list of preventive services — with no deductible or copayment.

But the health care system can’t possibly deliver on all these promises. The original ObamaCare bill actually had a line item for increased doctor training. But this provision was zeroed out before passage, probably to keep down the cost of health reform. The result will be increased rationing by waiting.

Take preventive care. The health reform law says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health, scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary care physician’s time each year, or 7.4 hours per working day.

And all of this time is time spent searching for problems and talking about the search. If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.

When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.

How long does it take you on the phone to make an appointment to see a doctor? How many days do you have to wait before she can see you? How long does it take to get to the doctor’s office? Once there, how long do you have to wait before being seen? These are all non-price barriers to care, and there is substantial evidence that they are more important in deterring care than the fee the doctor charges, even for low-income patients.

For example, the average wait to see a new family doctor in this country is just under three weeks. But in Boston, with ObamaCare-type reform, the wait is about two months.

When people cannot find a primary care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms. Yet one study found up to 20% of the patients who enter an emergency room leave without ever seeing a doctor, because they get tired of waiting. Be prepared for that situation to get worse.

When demand exceeds supply, doctors have a great deal of flexibility about who they see and when they see them. Not surprisingly, they tend to see those patients first who pay the highest fees. A New York Times survey of dermatologists in 2008, for example, found an extensive two-tiered system. For patients in need of services covered by Medicare, the typical wait to see a doctor was two or three weeks, and the appointments were made by answering machine.

However, for Botox and other treatments not covered by Medicare (and for which patients pay the market price out of pocket), appointments to see those same doctors were often available on the same day, and they were made by live receptionists.

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.

Their wait will only become longer as more and more Americans turn to concierge medicine for their care. Although the model differs from region to region and doctor to doctor, concierge medicine basically means that patients pay doctors to be their agents, rather than the agents of third-party payers such as insurance companies or government bureaucracies.

For a fee of roughly $1,500 to $2,000, for example, a Medicare patient can form a new relationship with a doctor. This usually includes same day or next-day appointments. It also usually means that patients can talk with their physicians by telephone and email. The physician helps the patient obtain tests, make appointments with specialists and in other ways negotiate an increasingly bureaucratic health care system.

Here is the problem. A typical primary care physician has about 2,500 patients (according to a 2009 study by the Centers for Disease Control and Prevention), but when he opens a concierge practice, he’ll typically take about 500 patients with him (according to MDVIP, the largest organization of concierge doctors). That’s about all he can handle, given the extra time and attention those patients are going to expect. But the 2,000 patients left behind now must find another physician. So in general, as concierge care grows, the strain on the rest of the system will become greater.

I predict that in the next several years concierge medicine will grow rapidly, and every senior who can afford one will have a concierge doctor. A lot of non-seniors will as well. We will quickly evolve into a two-tiered health care system, with those who can afford it getting more care and better care.

In the meantime, the most vulnerable populations may have less access to care than they had before ObamaCare became law.

Comments (28)

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  1. Devon Herrick says:

    In a free market system where doctors compete on price, quality and amenities, a robust number of doctors is good for consumers. In a system that is collectively financed, too many physicians tends to drive up costs (to the detriment of taxpayers but the benefit of patients). In a hybrid system such as ours — where 90% of medical bills are paid by third-party payers — the results are somewhat mixed.

    Medicaid (and to some degree Medicare) rations by waiting using price controls. Insurance doesn’t have that much leverage. This suggests there will be a physician shortage for people on government insurance and not likely a shortage of people with private coverage.

    • Martha says:

      Even geographically, there appear to huge disparities between the concentration of practicing doctors across the US.

    • Tommy says:

      “However, for Botox and other treatments not covered by Medicare (and for which patients pay the market price out of pocket), appointments to see those same doctors were often available on the same day, and they were made by live receptionists.” If only we were able to replicate the success that the cosmetic surgery field has enjoyed in the past few years. Lower prices and higher quality.

    • Bill Sidhu says:

      It does not make much sense that, if you increase the number of doctors, in any system that the price will increase. In dynamic balance of demand and supply the prices will come down and if the supply is increased dramatically the prices will come down dramatically. My common sense tells me deliberate under supply of doctors is one of the main causes of the explosion of healthcare costs.

      • Devon Herrick says:

        There is a school of economic thought (supported by many medical societies) that constricting the supply of doctors reduces costs.

        Doctors are the gatekeepers of most medical care and order medical procedures whose cost is far in excess of the physicians’ fees. Thus, the argument goes that too many doctors causes them to order more tests and order more costly procedures. This is an extension of the target income theory which posits that doctors all want to make a given income and will order tests and provide treatments until they reach that annual income.

        This is the justification some doctors groups have used in the past to erect barriers to entry as a way to constrain costs. It’s sort of like saying… “protect us from competition and pay us well and we won’t order a bunch of unnecessary tests to reach our income goals.”

        In a competitive market, restricting supply increases prices. In a socialized medical system that does not pay physicians on a fee-for-service basis, restricting supply is a way of reducing unnecessary utilization (since the price to the patient is free at the point of service).

      • Dennis Vollmer says:

        Bill, you are partly right. Barriers to individuals becoming physicians are many and this tends to limit supply and hence WILL increase costs. That said, physician salaries account for less than 10% of healthcare expenditures and are not the main driver in cost increases.
        With regard to physicians, many of the barriers to increasing the physician supply are deliberate while many are not. Included in the latter are: Physicians must be relatively intelligent and highly educable, not everyone is capable; there is a long process involved, roughly 8-12 years postbaccalaureate; it is expensive both to society and the individual; clinical practice is often demanding both physically and mentally tending to push some into non clinical roles.

        Factors which deliberately limit physician supply include licensure, board certification, limited funding for resident training positions and specific training requirements imposed on residency programs. While some of these factors are driven by physicians themselves, government is a major player in this and deregulation seems unlikely.

        When you add increasing disincentives to physicians to continue practicing which include increased overhead, decreasing reimbursement and an unfriendly medicolegal environment you get fewer and more expensive practitioners.

        Lowering costs by offloading clinical responsibilities to midlevel providers is an option in some circumstances but clearly not all and there is no doubt that the average quality level will not be the same.

    • Wanda J. Jones says:

      Devon–You need to view the actual delivery system in a local area or region. In a large city-region, people can go to anyone under their plan to which they can travel. But this varies by specialty. There are too few OBs now. There are too many general surgeons in some cities. There are so few neurosurgeons in some cities that they can command $5 mil a year to stand by for the ER cases that need them. The concern I have is that some bureaucrat will think of assigning doctors, or making rules about appointments, or forbidding concierge medicine, or fining doctors who have long wait times, or setting up a scoring system to recognize those that provide fair access vs those who do not, or not letting them see Medicare patients, if they won’t take Medicaid, or patients registered through the exchanges. See other comment below.

      Wanda J. Jones
      San Francisco

  2. Andrew Thorby says:

    Excellent points although I hesitate to buy into predictions of a lasting shortage of anything in our free market system. The market always finds ways to solve the problem once the problem becomes clear. The physician shortage will certainly be solved and it will probably be solved by physician extenders and technology as predicted.

  3. Timothy says:

    Royal Pains, anyone?

  4. Timothy says:

    But in all seriousness, the trends do seem to be pointing towards concierge medicine as a solution for our primary care woes. It creates the personal relationship and interaction between doctors and patient that the CMS innovation pilot programs saw success with.

    • JamesR Chaillet Jr MD says:

      Concierge medicine will grow to a point. As family physicians understand that they can make more money with less time and aggravation, some will gravitate to this type of practice. It’s growth will be limited by the number of people(patients) understanding and appreciating the value of this type of practice and of being willing to pay up from for it.

      As an aside, if physicians also avoid dealing with any and all third party payors,(a so called cash only practice) the physician will make more money and the patients will pay less. The overhead associated with collecting from insurance companies and other third party payors is huge.

  5. Brandon says:

    I suppose 500 full-paying patients would cost the same as what 2500 patients reimbursing at Medicaid rates would be.

  6. Perry says:

    That’s great, everyone will be insured, but you won’t be able to see a doctor for 6 months. Typical Government solution. Maybe they meant it to be that way???

  7. Jimbino says:

    Besides concierge medicine, there’s medical tourism. You can take a bus, fly or drive to Mexico, where you will pay less and wait less.

    I can’t wait for someone to offer Mexican health insurance for the believers in insurance. For me, I’ll just drive on down or take a nice vacation in Cancun or Puerto Vallarta.

  8. Daniel Patterson says:

    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1824721/

    Here is an interesting study that documents this shortage. Its real and it will impact your access to healthcare.

  9. Centrist says:

    Dr. Goodman,

    Your observations, as I understand them, are based on the model of supply and demand, and that if the supply of Doctors is reduced or is stagnant, and the demand goes up (without additional remuneration to doctors) that waiting periods increase and quality diminishes.

    Can you reconcile the following fact, with respect to the ‘supply’ of doctors, since passage of the ACA?

    [Washington, D.C., October 24, 2013—A record number of students applied to and enrolled in the nation’s medical schools in 2013, according to data released today by the AAMC (Association of American Medical Colleges).] https://www.aamc.org/newsroom/newsreleases/358410/20131024.html

  10. Uwe E. Reinhardt says:

    I think Texas is using the right approach for reducing the doctor shortage (for those who can afford doctors). Just increase the number of uninsured who cannot afford to see a doctor, and any perceived shortage will go away. The dumb Liberals in Massachusetts just don’t get it.

  11. Don Levit says:

    The preventive services covered from the first dollar would normally increase demand. But nothing in the ACA forces people to make claims even if they utilize the preventive services. By voluntarily choosing to not make these smaller claims, we will provide lower premiums each month at National Prosperity Life and Health
    Don Levit

  12. Wanda J. Jones says:

    John and Friends:

    Supply and demand for physicians in the next two decades will be influenced by the insurance models in place. Waiting times are a leading indicator for supply, no doubt about it.

    But hardly anything surpasses the effect of losing Boomer age physicians as they retire; a drop of 4% per year, compounded. The impact doubles when one counts the new Doctors on Medicare as using twice the usual amount of medical service. It triples when you could the loss of their taxes from not working. As it takes about 14 years to produce a new specialist, if we start now, we will be behind for two decades, after which the Boomer bubble will smooth out.

    The other factor to consider is licensure–some states, such as ours, forbid allied health professionals from doing work that doctors claim as their own. As physicians are most valuable in the diagnostic step, there should be a nation-wide revision to the Nurse Practice Acts, to permit nurses to take screening physicals, return visits, and other matters off the doctor’s hands. Substitutions for physicians doing invasive procedures will be largely the kinds of devices that reduce the time and steps of those procedures, such as robotics.

    The problems with waiting times exist now, and do not seem to impact the cerebral cortex of bureaucrats, as they are seldom the cause of budgeted improvements in staffing. Part of the problem is management in government-run institutions who preside rather than truly manage. There is so much routine that is locked in that they would not know where to start. When one uses a private sector medical practice that depends on referrals and return visits, the service can be exem-plary.

    Our investment in electronic medical records would pay off much more if the timing of care could be in the notes, plus waiting time and duration of service. One can dig it out now but it is not routinely charted.

    It is true that some technological innovations will reduce the need for physician time. That will be for diagnostics and surgical procedures. Even lab tests will become sensors on small paper strips.

    To stem the loss of physician manpower, those collectively responsible for the effects now being seen should try these things:

    1. Pay better for government patients.

    2. Cut paperwork and dumb mandates.

    3. Establish satellite primary care centers in high need neighborhoods to divert people who normally use the ER and connect with doctors in the central city via videoconferencing.

    4. Enhance the role of the visiting nurse, and pay her for evaluating both the patient and the family members.

    5. Provide training for enrollees for how to use the health system, and how not to.

    6. Train family members in primary level conditions so they can care for each other and themselves. Flu, headache, backache, skin rashes, indigestion, and so on. There is a lot of wasted time seeing the “worried well.”

    7. Use vital signs monitors built into iphones and other consumer electronics.

    8. Conduct MD visits at home via interactive TV.

    You get it….All it takes is leadership and a bit of Google searching.

    The greatest shortages will be in rural areas and inner city neighborhoods, and the greatest categories of shortages will be in psychiatry, OB, Internal medicine, and addiction medicine. To solve this means an organization that takes responsibility, a source of extra funding, and management to guide the develop-ment of the right setting with teams that can expand the doctor’s capacity.

    Finally, the illnesses that adults have often have their roots in childhood, especially in abuse. Let’s not get into the economist’s mental lock step of thinking this is a numbers game of total docs to total population. It is population of a particular type, their risks, their patterns of demand, the programs organized for them, and the staffing required to do a good job. Not a formula–a design and a leadership up to the task. Do not take this paragraph as meaning we should set up new planning agencies!!!!

    Wanda Jones
    San Francisco
    Happy Christmas, everyone

  13. Nath Ekanem says:

    US doctors are now being recruited by DUBAI, SAUDI ARABIA AND OIL RICH COUNTRY, THIS TREND WILL REALLY AFFECT US IN YEARS TO COME
    http://thehealthcareblog.com/blog/2013/12/11/the-new-tools-what-21st-century-education-can-teach-us/comment-page-1/#comment-485015

  14. Douglas fox says:

    Obamacare is not ACA it is a total misrepresentation of healthcare delivery. There are many ways to improve it. Many ideas are out there -dr price had some good ideas prese nted on Brett’s show last night. Higher deductible have reduced the frequency of MRI and CAT scans. The costs for these procedures have such a varied amount at hospitals and outpatient procedures that are hard to justify. Why is the whole of the USA not considered one big group and all insurance companies assembling their groups from the whole country. DJF/STL

  15. Al Baun says:

    Great news.

    I checked the exchange site for Idaho and I can receive the same policy, from the same insurer, for less money. The exchange site is now a breeze. Thank you Barack, and thank you republicans for providing the extra nudge (some call it whining) to get bugs worked out so quickly.

    Thought! Through the ACA, people are migrating to higher deductibles, therefore being more discriminating about which procedures they pay for; and as a result … reduced demand for services should cause costs to follow. Wow, the ACA had Dr. Goodman’s supply and demand concept already built in to it. Thank you Dr. Goodman and Barack.

    Also! High deductibles seem to be a poor-man’s HSA. If you can’t front the money, as you must with an HAS, you can simply borrow it as/if needed. This makes more sense now that the ACA is reducing the HSA deductions. Thanks again Dr. Goodman and Barack.

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