Speakers Say Medicare Payment Rates Major Reason for Physician Shortages

Medicare's payment system has contributed to the decreasing interest in primary care careers in the United States and to deterioration in the nation's primary care infrastructure, said a family medicine professor and medical researcher during a panel presentation before the Medicare Payment Advisory Commission, or MedPAC, here on April 13.

AAFP member Kevin Grumbach, M.D., professor and chair of the department of family and community medicine at the University of California, San Francisco, said Medicare's payment structure has made subspecialty practices much more lucrative for medical doctors, which is an important reason why the nation is about to experience a decline in the number of primary care physicians per capita in the United States.

Grumbach, who also serves as chief of family and community medicine at San Francisco General Hospital, referred to a chart showing that, under Medicare, primary care physicians receive substantially less in compensation than subspecialists, earning about $82 per half hour for evaluation and management services compared with about $683 per half hour for ophthalmologists who perform cataract surgery and about $286 per half hour for gastroenterologists who provide colonoscopies.

"Today, we have 50 percent fewer medical graduates going into family medicine than we did 10 years ago," said Grumbach. The statistics represent a "bailing out across the professions of a commitment to primary care." He warned MedPAC members that the "foundation of primary care is collapsing in the United States," creating a more dysfunctional and costly health care system.

"This is not a problem for 2015 or 2020," said Grumbach. "This is a problem now." He reminded MedPAC members "physician payment policy is, in fact, physician workforce policy." Medicare officials have "engaged in workforce planning throughout the duration of the Medicare program by determining how fees and graduate medical education policies are set," he said. "I think the most meaningful workforce policy that CMS could implement would be to very actively address this need to support the primary care infrastructure."

Grumbach also said Medicare patients should register with physician-led medical homes to improve the coordination of services and to, thus, enhance quality and decrease costs.

According to Grumbach, the nation still is in the "midst of an unprecedented growth in physician supply," driven almost entirely by increases in the number of subspecialists during the past 50 years.

Nevertheless, the United States still suffers from a maldistribution of physicians, with the shortages affecting rural areas as well as inner cities, said Grumbach. "I am not sure that the idea of tacit trickle-down theory has ever been valid in the physician workforce environment," he commented.

The supply of subspecialists has not resulted in lower costs and better health care outcomes -- it has, in fact, had the opposite effect, creating higher costs and generating outcomes that often fall short of what primary care physicians achieve in the same geographic areas. "You don't find that cancer outcomes are better, for example, in areas that have a lot of cancer specialists," said Grumbach.

By contrast, primary care physicians contribute to a higher quality of care, lower costs and better health outcomes than areas served by subspecialists. Grumbach cited data showing that states with a higher concentration of family physicians have better Medicare quality indicators and lower costs than states with higher percentages of subspecialists.

Edward Salsberg, M.P.A., associate vice president and director of the Center for Workforce Studies at the Association of American Medical Colleges, also served on the panel.

He told the commission that the nation will "likely face a significant shortage of physicians by 2020 and beyond," a shortage caused by three major factors -- the growth of the U.S. population in general, the aging of the population and the retirement of more physicians.

"The U.S. population is growing by 25 million every decade," Salsberg said. "Clearly, this will be a major factor in driving future demand."

The number of people over the age of 65 will double between 2000 and 2030, creating a greater demand for physician services. "Americans over 65 make far more visits to physicians," Salsberg said. "Major illnesses in America primarily affect the elderly."

Salsberg pointed out that medical school enrollment doubled between 1960 and 1980 and, as a result, a large percentage of those graduates are now approaching retirement age. Physician retirement will double from about 10,000 a year in 2000 to 20,000 annually by 2020, he said.

He also made a distinction between the supply of physicians and the distribution of physicians, saying that the "distribution issue needs to be addressed separately from the overall supply issue."

"There are already 30 million Americans living in underserved areas," Salsberg said. "So as we think about how many physicians we need, we are not starting out at a point where supply equals demand."

He called for an expansion of the National Health Service Corps and warned that physician shortages are likely to exacerbate access-to-care deficiencies in underserved and rural communities.

"Medicare is a major payer for health services and financing of graduate medical education and has a role to play in assuring that there is an adequate supply of physicians to meet the nation's needs," Salsberg said.