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Physician Workforce Shortages: Implications and Issues for Academic Health Centers and Policymakers

Salsberg, Edward MPA; Grover, Atul MD, PhD

Health Policy

A physician shortage is likely given current levels of medical education and training. Because an increase in physician supply through expansion of U.S. medical school capacity will require ten or more years, there is little time left to affect the supply of new physicians in 2020 when a substantial number of baby boomers will be over 70 years of age. Even with a substantial increase in medical education and training capacity, it is unlikely that all of the increased demand for health services can be met with physicians. In addition to the challenges of expanding medical school enrollment, the nation will need to grapple with other ramifications of demand exceeding supply. This includes assessing how to deliver services more effectively and efficiently and the future roles of the physician and other health professionals. These challenges are particularly difficult for medical schools and teaching hospitals, the cornerstones of medical education and training in the United States. Osteopathic and off-shore schools targeted to Americans have been willing and able to grow more quickly and less expensively than U.S. medical schools, in part because of their more narrow approaches to medical education. In addition, physicians from less developed countries continue to migrate to the United States in significant numbers. Medical schools, teaching hospitals, and policymakers will need to address several major questions as they respond to the shortages. They will either confront and address these issues in the next few years or they will be forced to change by others in the future.

Mr. Salsberg is director, AAMC Center for Workforce Studies, Association of American Medical Colleges, Washington, DC.

Dr. Grover is associate director, AAMC Center for Workforce Studies, Association of American Medical Colleges, Washington, DC.

Correspondence should be addressed to Mr. Salsberg, Director, AAMC Center for Workforce Studies, Association of American Medical Colleges, 2450 N St., NW, Washington, DC 20037.

A review of the key factors influencing the future supply and demand for physician services indicates a physician shortage is likely. The expected future shortage of physicians is driven by likely changes in the supply and the demand for physicians. On the demand side, key factors include: (1) the population of the United States is growing rapidly; (2) the largest growth will occur in the group people over the age of 65 years—those who consume the greatest health care resources; and (3) the expectations and wealth of Americans will motivate and enable them to use more health care services. On the supply side, key factors include: (1) one third (250,000) of active physicians are over age 55 years and likely to retire by 2020; and (2) the newest generation of physicians is unlikely to be willing to work the long hours that prior generations of physicians reportedly worked. At current levels of training, the physician-to-population ratio will peak by 2020 when Americans will need more, not fewer, medical services as the baby boomers begin to approach 75 years of age. If this trend is to be reversed, the medical education community needs to respond now.

As of 2005, a dozen states reported physician shortages or were likely to experience them within the next decade; nationally, at least a dozen specialties report similar shortages.1 These shortages are likely to exacerbate the existing lack of access for the 20% of Americans that live in federally designated Health Professional Shortage Areas (HPSA).2

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The Demand for Physician Services

As stated above, the demand for physician services is influenced by a number of factors. However, most of these factors are difficult to forecast with great confidence beyond a few years—excepting the aging and growth of the population, both of which have major ramifications for the future demand for physician services.

The population of the United States is growing rapidly. According to the U.S. Census Bureau, the nation is growing by more than 25 million people every decade.3 By 2020, the nation will be growing by almost 1% per year (0.8%), which exceeds the expected rate of growth in the supply of physicians, thus leading to a decrease in the physician-to-population ratio at a time when the number of elderly will be growing rapidly.

The number of Americans age 65 years and older will double by 2030.3 Why is this important? Because older Americans use far more physician services than do their younger counterparts. In 2004, patients aged 65 years and older averaged 7.6 physician ambulatory care visits a year compared with 3.3 per year for those under 65—130% more visits per year.4 The elderly also account for a disproportionate share of hospitalizations, procedures, and high-intensity services. For instance, over half of intensive care unit (ICU) days are paid for by Medicare.5

Most illnesses, particularly the most costly ones, are also far more prevalent among the elderly. The variation in age-specific cancer rates for males is a good example of the age effect: for males age 40 to 44 years, there are 146 new cancers per year per 100,000 people, whereas for males age 70 to 74 years, the rate rises to a staggering 2,806 new cases per year. If the age-specific rate of cancer is applied to census bureau projections of the U.S. population in 2020, the annual number of new cases will increase by nearly 50% (from 1,334,326 to 1,979,921).3,6 In fact, the incidence and prevalence of many common chronic and acute diseases will increase by similar percentages because the over-65 population will increase by 50% between 2000 and 2020 and will double by 2030.

Although new advances in treatment and early screening should bring improved outcomes, the prevalence of chronic diseases will increase over time. Patients are likely to live longer lives but will do so with multiple conditions that require ongoing physician services and accompanying resources.

The baby-boom generation has high expectations for the medical care system. They will be the wealthiest and most educated generation of elderly ever.7 The work by Cooper and others has highlighted the positive relationship between per capita income and use of physician services.8 Through an enormous investment in medicine, technology, and direct-to-consumer advertising, Americans have come to almost expect miracles from modern health care.

If current health care utilization patterns do not change, the average patient in the future will be older and will consume more physician services than he or she does today, effectively requiring more physicians to take care of the same number of people—requiring an increase in the ratio of physicians to population. Moreover, utilization rates have increased by 50% or more for Americans aged 65 to 84 years since 1980.9 The increase in per capita demand for health services, the declining number of hours worked by physicians, and the decrease in the ratio of physicians to population will result in a shortage of physicians in the United States by 2020 unless more physicians are educated and trained.

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The Supply of Physicians

Current and future physician shortages are related, in large part, to historical medical school enrollment patterns. In the 1960s and 1970s, U.S. medical schools’ enrollment doubled but then remained virtually flat between 1980 and 2005. As a result, a very large number of active physicians are nearing retirement age (see Figure 1). If historical retirement patterns continue, the annual number of physicians retiring each year will grow from fewer than 9,000 in 2000 to more than 22,000 per year by 2020, almost the number of new physicians completing graduate training annually in 2005.

Figure 1

Figure 1

The near-zero growth in U.S. medical school graduates (see Figure 2) has translated to a sharp decrease in the number of allopathic educational slots per population in America. In fact, between 1980 and 2005, the U.S. population grew by more than 70 million (31%)10,11; this has been accompanied by a significant and steady decline in medical school enrollment per 100,000 population, which will continue to drop over the next decade and beyond unless enrollment is significantly expanded (see Figure 3).

Figure 2

Figure 2

Figure 3

Figure 3

The available supply of physicians in the future is equal to the number of currently practicing plus new physicians minus any exits due to retirement, death, and career changes. However, the relative supply of physicians available to care for the U.S. population will also be reduced by the changing practice patterns of the workforce.

There are growing reports that the newest generation of physicians do not desire to work the long hours of physicians in the past. Gender plays a role. Although only 10% of practicing physicians were female in 1980, they are now about 50% of the medical students.12 Although this trend is encouraging from a societal perspective, it has implications for the physician workforce because women tend to work fewer hours than their male counterparts, even when part-time status is taken into consideration.13 For instance, a survey of recent dermatology graduates found that women see patients an average of 16% fewer hours than do their male colleagues.14 Moreover, today’s young physicians are more likely to be part of two professional households and often choose to work fewer hours than their older counterparts regardless of their gender.15 As a result, the future physician workforce may effectively be significantly lower than their aggregate numbers may suggest.

One solution to physician workforce shortages has been the importation of physicians educated outside of the United States. At the present time, more than 6,000 international medical graduates (IMGs) enter graduate training positions in the United States accredited by the Accreditation Council for Graduate Medical Education (ACGME) every year and account for 25% of all residents in training.16 However, the future supply of IMGs may not be as robust as in the past because of increasing reliance on nondomestically educated physicians by many other developed countries, and expanding health care sectors and physician opportunities in many developing nations. Recent literature has also called into question the ethics of continuing to import physicians trained in countries less developed than our own given “donor” nations’ investment in their education.17 Even if the United States continues to import 6,000 physicians a year from abroad, this alone is unlikely to meet increasing demand for health services.

The minimal growth in the number of MDs educated during the last two decades coupled with growth in the U.S. population means that the number of physicians available on a per capita basis is about to level off and will eventually begin to decrease by 2020, the first time it has declined since the 1930s. The reliance on non-U.S.-trained physicians, the growth of osteopathic schools, and an increased use of nurse practitioners and physician assistants in the 1990s has so far allowed for continued expansion of the physician workforce to meet the needs of an expanding population. If there were a 30% expansion in enrollment at allopathic medical schools, per capita enrollment levels would still be lower than those of the 1980s. But it is not at all clear whether a 30% expansion in MD enrollments will occur.

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Major Issues for Academic Health Centers and Policymakers

The coming shortage of physicians will create a series of challenges for medical educators and teaching hospitals, especially the allopathic medical education and training community. Decisions need to be made as to who, where, and how best to educate a new generation of physicians.

1. How much of the future need for medical services will be met by physicians?

There is little doubt that Americans will need and want more medical services. A key question is: How much of that future need will be addressed by physicians and how much by other health professionals? Clearly, there are many other health professionals willing and interested in providing services that are now within the domain of physicians. Although more services currently provided by physicians can probably be safely provided by others, there are services and activities which only physicians can provide.

Decisions as to which services can be provided by other health professionals should be based on sound research and professional judgment, not by default through shortages of physicians. More studies of the relationship between health outcomes and different types of providers are needed.

2. How much of the increase in the number of new physicians should come from LCME-accredited medical schools? Will U.S. allopathic medical education defer to other forms of medical education to meet the growing need for physicians?

Although the vast majority of physicians in America are graduates of schools accredited by the Liaison Committee on Medical Education (LCME), over the past 25 years, the number of new physicians from non-LCME schools has grown rapidly, whereas the number of U.S. MD graduates has remained constant. Graduates of osteopathic schools increased over 250% from 1980 to 2005 from about 1,000 to 2,800 and will approach 5,000 by 2015.18 According to data from the AAMC’s GMETrack, the Medical College Admission Test, the National Resident Matching Program, and the Educational Commission for Foreign Medical Graduates, the number of schools in the Caribbean has nearly quadrupled in the past decade, and more than 2,500 U.S. citizens are going out of the United States for medical education every year; in 2004, about 1,400 entered ACGME-accredited programs in the United States. There are still large numbers of other international medical school graduates (non-U.S. citizens) trying to enter ACGME-accredited programs every year, and far more apply than are accepted.

Expanding enrollment is a particular challenge for LCME-accredited programs—their mission has typically included not just basic clinical education but also research, care for the underserved, and the development of new and promising technologies. This approach to medical education can be more costly than others and more time-consuming to establish or expand.

Although an increase of several thousand graduates per year is a relative drop in the bucket in terms of physician supply in 2020, it is a far more major, costly, and difficult challenge for medical schools than for other, less comprehensive approaches to medical education. Allopathic medicine has historically educated physicians who understand the biomedical research enterprise and its impact on clinical practice; emphasized caring for the medically underserved; trained physician scientists (MD-PhD); educated in a diverse environment; and trained leaders for research and practice—all of which make this model of education and training more expensive.

If U.S. MD-granting institutions do not expand, surely other forms of medical education will. Given the time, effort, and resources of LCME-accredited schools to assure that graduates are well qualified and well balanced, should allopathic medicine in America now defer to other forms of medical education to meet the growing need for clinical care in America?

3. Can medical education be more efficient and less costly? Should allopathic medicine consider new educational approaches? How can medical education be improved?

Increasing enrollment by several thousand students per year will be a major challenge and costly given current approaches to medical education. Is it time to consider or reconsider changes in the current educational model? For instance, can we shorten the educational process? What can we learn from the model used by community-based schools? Osteopathic schools? Foreign schools? Must most of MD education be based in major academic health centers?

The MD model assumes that combining the missions of medical education, research, and clinical care, including care for the poor and uninsured, is the most effective way to educate physicians and to give them the skills and competencies needed for high quality care. But this approach can be costly and time-consuming. Physician shortages may be met primarily by physicians practicing clinical medicine who may not need continuous immersion in research and other missions that help make allopathic medicine unique. Other models do not have multiple missions and focus almost exclusively on clinical education. Osteopathic medicine, for example, has largely modeled itself around clinical education only, and relies heavily on voluntary faculty and community-based models.

4. How can medical schools educate and train physicians for their new roles?

New models for delivering care may rely heavily on other members of the health care team, including nurse practitioners, physician assistants, pharmacists, nurses, health educators, physical therapists, and others. The health care system must learn to take full advantage of the multitude of its workers, whether trained at the doctoral, masters, baccalaureate, associate, or other level. Medical schools should be moving in the direction of producing physicians who are both adept in working in these new paradigms and also can lead health care delivery into the next century and beyond.

Calls for interdisciplinary care and education are not new, and physicians are working more with nonphysician clinicians. What will be new will be the growing pressure created by shortages and a growing demand for services. In order for the medical community to meet the expected surge in demand, physicians will need to be educated and prepared to be part of a team of caregivers. This will not only make economic sense but can improve quality and outcomes. Relying more on other providers will allow us to reserve physicians for more complex cases. If certain services can be provided by another health professional, physicians and the health care system should be fully supportive. There will be more than enough for physicians to do.

5. Are federal subsidies for medical education needed and/or desirable? If so, what type?

In 2006, the Association of American Medical Colleges (AAMC) recommended to medical schools in America that they increase the number of medical school enrollment by 30% (approximately 5,000 matriculants per year) by 2015.19 The National Council on Graduate Medical Education (COGME) recommended an increase of 3,000 graduates per year by 2015.20 As noted, osteopathic schools are continuing their historic enrollment increases and are considering further expansion. A 30% expansion will be challenging for medical schools but is an appropriate goal, given the likely surge in demand for health services that the nation will experience. Nonetheless, that level of expansion may be insufficient to meet all future demand for physician services, even if osteopathic schools continue to grow and the current number of IMGs remains unchanged. However, a 30% increase in U.S.-trained allopathic graduates—would still be less than the number of first-year ACGME-accredited residency positions currently filled by IMGs. Therefore, the number of IMGs could be reduced to keep physician production at current levels if there are major changes in the delivery system or the epidemiology of disease that decrease the future demand for physician services.

Medical schools are beginning to respond, but, as of Fall 2005, had implemented or planned increases of only 10% over current levels.21 Because most medical schools are state-sponsored or -supported and states are facing very tight budgets, it is not clear whether further increases are likely in the absence of federal financial stimulation.

The experience with federal medical education subsidies in the 1960s and 1970s was mixed. While federal subsidies did play a major role in the doubling of the number of U.S. medical school graduates, the methods of the subsidies and the later sudden ending of subsidies were problematic for many medical schools. Nonetheless, federal funding of medical education through programs such as Title VII has been associated with increasing the supply of the primary care workforce and with addressing the needs of the underserved and rural communities. Although much of Title VII was eliminated in the 2006 federal budget and elimination of the remainder has been proposed for the 2007 budget, the problems it was designed to address have not been eliminated. These cutbacks and the possible elimination of Title VII come at a time when, like the period of its inception in the 1960s, the United States is facing a significant shortage of physicians.22

6. How should GME be financed? In the absence of major increases in funding for GME, will teaching hospitals expand the number of training positions?

U.S. medical schools are starting to increase enrollment in large part in response to the growing concerns with physician shortages. However, if funding for residency training is not increased, then teaching hospitals may use the increase in U.S. graduates to reduce their reliance on IMGs (who now make up 25% of all new physicians entering residency training in the United States each year)16 without affecting the overall number of physicians available for practice. Additionally, if GME slots are not increased at the same rate as medical school enrollment increases, some U.S. medical school graduates may find themselves without a residency training position, a requirement to become licensed.

There are a number of serious problems with the nation’s current reliance on Medicare funding of teaching hospital missions, including its tying of funds to hospital inpatient reimbursement and the cap on the number of GME positions it will cover. The cap on the number of federally funded training slots might be justified if one believes there was going to be a surplus of physicians. However, these caps make little sense in a time of growing physician shortages driven, in large part, by the growing number of elderly covered by Medicare.

Caps on Medicare’s support of GME training positions are also contrary to the historical commitment Medicare has made to the missions of teaching hospitals. Although one-third of Medicare GME payments are for direct support of physician education, two-thirds of its payments are, in fact, for missions associated with the higher costs of teaching hospitals—such as research, care for the underserved, and the highly specialized services unavailable at other institutions—and not for the costs of medical education and training. Medicare’s payments for these missions were based upon resident counts only as a proxy for these other missions and societal goods produced by the nation’s academic medical centers.

Some teaching hospitals are likely to increase training slots without new federal subsidies; however, this is unlikely to be sufficient to meet all of the increase in U.S. medical school enrollment and may be in selective specialties based on teaching hospital needs and financing rather than community needs.

A new, comprehensive, and sustainable approach to financing graduate medical education and associated teaching hospital missions would be welcomed by most stakeholders. However, that has been and is likely to be elusive short of a new national health care financing system or, at least, an “all-payer” fund to support medical education and training that is not based upon yearly appropriations. Short of comprehensive reform, raising the limits on the number of residency positions supported by Medicare would be appropriate. To avoid further brain drain from developing countries, Medicare should increase funded positions only to the extent necessary to accommodate the increase in U.S. MD and osteopathic graduates.

One of the policy consequences of raising the cap rather than eliminating it would be that a system would need to be developed to allocate the increase among teaching hospitals and residency programs. How and who would do this would be a challenge. Hopefully, it would include consideration of the priority physician workforce needs of the nation.

7. How far should the nation go towards self sufficiency in educating its physician workforce?

The United States has failed to educate enough physicians to meet the medical needs of its own citizens. The United States has become addicted to IMGs—just as it has become addicted to oil. It would be better for the world if the United States reduced its dependence on foreign physicians and moved towards self sufficiency. The solution is not to deny access to foreign physicians but to increase production of U.S.-educated physicians even further.

Although COGME and others recommended a decade ago that IMGs entering GME each year should not exceed 10% of the number of U.S. medical school graduates, IMGs are now close to 35% of the number of U.S. graduates entering ACMGE-accredited training programs annually.

Rather than increase domestic production during the last decade, though, the United States has continued to “outsource” its medical education by bringing in foreign-trained physicians at a rate higher than is healthy for the United States or for its less-developed “donor” countries.

U.S. teaching hospitals should continue to provide training opportunities for foreign-educated physicians as a means to improve international health rather than view training as a way to recruit foreign physicians, thereby draining the developing world of one of its most valuable human resources. Moreover, the global shortage of physicians makes our reliance on foreign-trained physicians a threat to our national public health infrastructure that will only grow worse in the coming decades as we compete with other expanding economies for these valuable resources. The failure of the United States to train its own physician workforce puts the nation at risk of being unable to provide adequate care for millions of individuals about to become Medicare beneficiaries with high expectations of the health care system.

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Summing Up

Academic medicine faces a number of serious challenges in the coming years. Demand for physicians is likely to exceed supply, and other medical education models, such as osteopathic and off-shore medical schools, are expanding capacity in leaps and bounds while MD schools struggle to make even modest increases in enrollment.

This potential crisis is also a time of opportunity: to improve medical education and training and increase their efficiency; to bring new and diverse types of people to medicine; to address medical education and training financing; and to reduce the brain drain from poorer countries.

All of the policy options discussed above point to the need for our nation to develop comprehensive workforce policies. If we address physician workforce issues in a piecemeal fashion or put off decisions into the future, we run the risk of waking up in 2020 or sooner to widespread physician shortages and with no good options to address them.

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© 2006 Association of American Medical Colleges