Preparing for practice


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  • PHYSICIAN WORK FORCE October 15, 2002 Ronald P. Kaufman, M.D., FACPE SLIDE #1 – PHYSICIAN WORK FORCE As many of you are aware, Dr. Charles Taylor began this program a number of years ago with weekly noon conferences, in which he was significantly supported and assisted by Mr. Mike Jensen. Beginning last year, we were encouraged by Drs. Goldman and Phil Altus to expand the program to also add a half-day sessions in the Fall, Winter, and in the Spring to cover some other subjects - in greater depth. So this is the kick-off of the first half-day session and we welcome you and we are optimistic that you will find the information, not only interesting, but perhaps more importantly, pragmatically helpful as you face the proposition of leaving the protective womb of education and training and move into the practice of medicine in the healthcare market-place of the 21 st century.
  • SLIDE # 2 – OUTLINE OF PROGRAM I am going to walk you through this outline in a moment, but the purpose of this program is to focus on the kinds of things that you have to think of sooner, rather than later. As you begin to evaluate your practice/job opportunities for July 2002. We understand that you have given this a lot of thought already and, perhaps, have even made some concrete contractual arrangements. Others of you are still exploring opportunities, and therefore, various elements will be of various significance, depending on where you are on the spectrum. Residents, for many years, around the country have stated in their evaluation of programs, that not enough time has been spent on the practical, business aspects of medicine and how they can evaluate job opportunities. In all honesty, it is very difficult to get the attention of house staff in the midst of your rigorous training programs, when you are concentrating on learning your specialty and becoming superb physicians. It is, therefore, easier to catch your attention near the end of your training program, when these things begin to assume a greater reality. So, as you can see on the side, today’s program is essentially going to focus on employment opportunities. Why is this first out of the barrel? Obviously, because that is the kind of thing that you will need the greatest lead time in order to evaluate what potential opportunities there are out there and how you might be able to achieve the best practice situation as possible in July. You can see that today, we are going to give you a short overview of the physician work force situation, so you will have some data as to the numbers of physicians, their distribution, their specialty, their sub-specialty choices, their compensation, and a variety of market force elements at play that impact on the healthcare physician market place.
  • SLIDE # 2 CONTIUED – OUTLINE OF PROGRAM This introductory data base will then be followed by Janie Hirsch of Spritz, Miller & Kilgore, a search firm, who will talk about how to interview and how to assess potential job opportunities. And last, but perhaps the key will be a presentation by Mr. William Kalish, an attorney, who will be discussing contracts negotiations, what to look for, what not to sign, etc. Also, as you will notice on the first slide, there will be ten (10) 1-hour conferences beginning on October 8, 2002 running through February 19, 2003, given on alternate weeks at the VA and at Tampa General. The subjects that will be covered will be the pros and cons of large multi-specialty group practices; the value of a small group practice; leaving one practice and joining another and/or going into solo practice; how to avoid malpractice suits; the proper way to apply for full medical licensesure in the State of Florida – and the quicker you start, the better; and then 2 sessions on basic financial terms, which will also cover student loan repayment strategy; the following we will review the pursuit of perfection – where the public’s demand for addressing quality issues in health care; a comparison between gross earnings vs spendable income; and finally, personal financial planning. A full printed schedule of this is available at the front of the room. In addition this year, on January 14, 2003, we will again have another ½ day session starting at 8:00 am and going to noon on a very, very key subject for you, “Getting Paid for What You Do”. A critical session focusing primarily on the art and science of proper financial coding. The program will end in March with another ½ day session in which we will focus on the malpractice issues, what we call in the trade, Risk Management, in other words, what does one do when a malpractice issue arises. Second, talk about a whole bunch of government compliance requirements that are now with us relative to billing and collecting, especially in governmental programs, as well as, the privacy requirements of the Kennedy/Kassenbaum bill of 1996- HIPAA, the Health Insurance Portability and Accountability Act. So that is our intent for this year long program. I believe you will find it exceedingly helpful. Obviously, all of these subjects cannot be covered in depth and, hopefully, will stimulate additional questions. I can assure you that the speakers will be available to you for questions after their presentations and you also can contact them for further help if you see fit.
  • SLIDE # 3 - SHORTAGE OR GLUT?   Let me start out now with a overview of this subject from 30,000 feet, so when we talk about job opportunities and compensation, you will have some basic evidence and data against which to project your individual issues. Again, most of us having been trained, make our individual patient decisions, hopefully, on the basis of evidence-based medicine and are, therefore, usually influenced by the data that drives the decisions. So, my attempt today is to briefly give you some idea of some of the data relative to work force issues impacting health care and physicians in the United States at the turn of the century. Are there too many physicians or too few physicians? Are there too many specialists and not enough Primary Care physicians? Is this an unanswerable question, because of the significance of geographic variance? The basic fact, however, is that since health care is a commodity and since all commodities respond to marketplace forces of supply and demand, a practical answer to these questions is critical to you. Since if, indeed, there is an excess of physicians the marketplace, will advantage be taken of that excess and diminish M.D. compensation? If there is a shortage, such as there is in petroleum products at the moment, the marketplace reacts by increasing the price. Although compensation or payment is a significant issue in this equation, the issue of shortage or glut effects all aspects of practice behavior, not the least of which is satisfaction, morale and professionalism.
  • SLIDE # 4 – “MAKE UP YOUR MIND HOW MANY DOCTORS THE COMMUNITY NEEDS TO KEEP IT WELL DO NOT REGISTER MORE OR LESS THAN THIS NUMBER.” (GEORGE BERNARD SHAW) This quote from Shaw as “The Doctor’s Dilemma” is right on the mark. That should be the goal, but obviously the situation is much more complex than that. The formulas and the data to drive the formulas do not exist; there is no rational way to reach a data-driven conclusion that will achieve broad consensus.  
  • SLIDE # 5 – THE PRODUCTION LINE, STUDENTS AND RESIDENTS   Let us first analyze the production line of the creation of a practicing physician. Starting with medical school applicants, moving on to student themselves, and concluding with data about residents.
  • SLIDE # 6 – NATIONAL MEDICAL SCHOOL APPLICANT POOL-1900-2000 As you can see on the slide, the number of applicants in the nation’s 125 medical schools fell for the 4 th straight year, and although there is no firm explanation, there are a few hypotheses. 1) there are many attractive alternatives for bright and ambitious students, especially those who are seeking a faster route to economic independence than the long road to becoming a physician; 2) the possibility and related reason is the unusually large dept burden that many medical students must anticipate; and 3) if one looks at the last decade you can see that in 1990 there were approximately 29,000 applicants with a peek in 1996 of 47,000 applicants and now down to 31,000 applicants. Perhaps this is just one of those cycles that we frequently see in many professions, such as accounting, engineering, nursing, etc. Despite the fall in the number of applicants, there is still a greater than 2 to 1 ratio of applicants to available positions. The MCAT scores have gone up, if anything, so there is no evidence of any decrease in quality of the medical student today, despite the decrease in the ratio of applicants to available positions.
  • SLIDE # 7 – A DECADE OF PROGRESS This slide dramatically emphasizes the significant increase in the number of women in the past decade who have gone into medical school and recent data, our first year class shows that to be now approximately 50%. The reason that I bring this up here is not to point out any major social advance or to make a political statement, but rather to put on the table the fact that there is no question that more and more women enter into medicine, their priorities are understandably different from males. They have different life style needs and especially if they wish to get married and have children. Therefore, it is predicted that a FTE male vs a FTE female will be different in the work force.
  • SLIDE # 8 – IMPACT OF PROJECTED U.S. MEDICAL SCHOOLS GRADUATIONS AND RETIREMENTS Returning, therefore, to the question of shortage versus surplus. This study demonstrates that currently we have a significant excess of individuals graduating Medical School so that with the number of potential retirements (estimated to be after 35 years of practice) an equilibrium will be achieved some where around the year 2020. Therefore, at least from this perspective, we currently have a surplus, and that the balance will occur in about 20 years relative to U.S.M.G.’s – not the total picture since it does not take into account DOs or IMGs – more on this in a moment.
  • SLIDE # 9 – TOTAL ENROLLMENT IN U.S. MEDICAL SCHOOLS Therefore, when one is looking at total enrollment, one has to add together M.D. granting and D.O. Granting. As you can see, D.O. Granting has become approximately 12% of the total, or approximately 9,000 per year.   Therefore, the Physician production line in the United States has two major feeders M.D. Granting and D.O. Granting. All estimates of supply must keep both in mind. Therefore, the earlier statement that we would be in balance in the year 2020 does not take this into consideration and is, therefore, invalid. The purpose of this slide is to show again, that Osteopathic enrollment has grown to almost 12% of the total number of graduates, while Allopathic graduates have remained flat at 66,000 over the past few years.  
  • SLIDE # 10 – WHAT 1999 GRADUATE OWES? This I think is a very important and telling slide, since you can see that only 20% of graduates owed less $50,000 after paying for their medical education. Although this is a miniscule amount relative to the total cost of their education. More importantly, some 40% owe in excess of a $100,000 upon graduation. Without question, these debts are significant and any amount over $50,000 is very meaningful. The market place of managed care could be a significant burden to our current graduate and may well push the medical student graduates into specialties that have higher compensation in order to meet their indebtedness.   Some more recent data, which is more anecdotal and has not been totally collated, seems to indicate that an excess of 50% of graduates now owe over $100,000.
  • SLIDE # 11– RESIDENTS As you all vividly remember, it was kind of a jarring transition from going from a forth-year medical student one day to a first-year resident/intern on July 1 st . For many, I am sure it was difficult to get adjusted, but here you are, ready for another significant transition between being a physician in training to being a practicing physician, again on or about July 1. In the mean time, you have struggled with a whole bunch of decisions as to what kind of physician you wanted to be, did you want to specialize or sub-specialize and many of you have completed a core program, if you will, in Internal Medicine, and others of you have gone on to extra years of fellowship, and have, indeed, already picked specific sub-specialization areas. None of these decisions were easy and, in fact, you may have changed your mind a multiple of times along the way. But, here you are as residents finishing your program and ready to move on.
  • SLIDE # 12 – MAP OF THE UNITED STATES   One of the frequent determinants relative to practice is location. As I noted, urban verses rural, north verses south, east verses west, returning home to going elsewhere, the impact of marriage etc. In other words like in all other endeavors location, location, location.   Traditionally more than 50% of resident graduates look for opportunities in the same broad graphic census tracks in which they train. However, as clearly demonstrated on this map a very high percentage of the traditionally geographically desirable practice locations are over saturated in the number of Physicians/100,000 population. In parallel many of the finer major training programs are located in these very same over saturated census tracks.   Therefore, despite the fact that many residents desire to find a practice opportunity in the area in which they have received their graduate medical education, this is becoming more and more difficult and has been accentuated in some areas where residency programs are injecting “restrictive covenants” as part of the contract of being accepted into the residency program. This issue of restrictive covenants – i.e., prohibiting practicing within a specific geographic area co-located with the residency program – is an issue that graduating students must be aware of.  
  • SLIDE # 13 – CRITERIA FOR CHOOSING A PRACTICE Again linking the issue of residency training, moving into the defined specialty, and ultimately into a practice. There are two major criteria utilized by house staff to choose a practice site as mentioned before. The over whelming number one is location and number two is the financial package. This is of growing import due to the increased student debt. Other lifestyle issues such as call coverage etc. are also part of the equation. Recently the Association of American Medical Colleges and the Accrediting Counsel for Graduate Medical Education have noted a new shift in practice location preference of final year resident physicians. More and more of them wish to practice in the suburbs or in metropolitan areas, with fewer and fewer of them interested in practicing in rural areas, especially in rural area of populations of less than 10,000 and fewer and fewer are interested in practicing in the inner city. This has been driven, they believe, primarily by live-style reasons, even if it may have a negative competitive impact on total compensation. This has also been complexed by the increasing number of women in medicine and the folks at AAMC believe that women physicians are significantly influenced by wanting good schools for their children and employment for their spouses and other amenities which are more likely to be found in metropolitan areas versus rural areas. So on the issue of location, location, location, suburbia seems to be the preference, at least at the moment.
  • SLIDE # 14 – TYPE OF PRACTICE THEY SEEK   As you can see very few are interested in solo practice or working for an HMO. With the vast majority looking to join either a single Specialty group or a multi specialty group and hoping to have some sort of partnership relationship. As you will remember from listing of topics to be covered during the year, this issue of solo practice, employment in a HMO or a hospital, partnership, single specialty group, multiple specially group, plusses and minuses will be covered by Charles Taylor and other individuals who he will bring in who are actually in a variety of these practice situations.
  • SLIDE # 15 – WHAT CONCERNS SENIOR RESIDENTS MOST This slide showing the trending of house staff interests and concerns is quite telling. Finding a job is now on the top of the list, followed by practice setting and indebtedness – career interest is at the bottom.  
  • SLIDE # 16 – PRACTICES WERE DESPERATELY SEEKING . . . The purpose of this slide is to dramatically illustrate the wide swings in specialty opportunities and shortage areas, almost from year to year. This data is published annually by both the JAMA as well as many specialty journals, because there is great interest among all physicians as to these wide swinging fluctuations as to what specialties are more in demand from time to time. Let’s just look at those with the broadest swings. In 1997 nobody was looking for Anesthesiologists and concomitantly residents were not matching into Anesthesia. But as you can see that Anesthesiology, Radiology, and Psychiatry have gone up greatly in demand. For example, currently emergency medicine has gone down in demand. However, it is expected that this will switch as we are now getting a significant back-up around the country and the increased demand for Emergency Medicine Physicians. Of great significance, I think, is the decrease in Primary Care physicians, whether they be family physicians, general practice, pediatrics, or internal medicine. What I want to leave you with, however, is these vacillations are wide, rapid, and unpredictable, kind of resembles the stock market. Therefore, what is true today will probably not be tomorrow and it behoves you to watch these swings closely.
  • SLIDE # 17 – GEOGRAPHIC VARIATIONS Like everything else in the United States, not all states have the same physician concentration or job opportunities, therefore, there can be wide geographic variations as I will demonstrate on the next 3 slides.
  • SLIDE # 18 – IMMEDIATE JOB OPENINGS! TOP 10 STATES WITH SHORTAGES OF PRIMARY CARE DOCTORS The next 3 slides demonstrates data, currently as of today, again remember this is a market place phenomena and is subject to change. You can see that there are significant shortages of primary care physicians in California, Texas, Florida, Georgia, and some of the states surrounding the Great Lakes, such as Michigan and Ohio, and also New York. Again, remember that this data is time limited and may be significantly different 3 years from now.
  • SLIDE # 19– THERE’S NOT AS MUCH COMPETITION IN THESE STATES, STATES WITH THE LOWEST DOCTOR-TO-POPULATION RATIOS With this in mind, you can see that it is in Idaho, Mississippi, Alaska, Oklahoma, Wyoming , Iowa, Nevada, South Dakota and Alaska.
  • SLIDE # 20 – WANT TO AVOID MANAGED CARE? States with the lowest HMO enrollment as a % of total population You can see there is some close parallelism between those states that have the lowest doctor-to-population ratios and the lowest penetration of Managed Care, such as Alaska, Mississippi, Wyoming, North Dakota, Iowa, etc.
  • SLIDE #21 – PHYSICIANS SUPPLY I throw in this slide to show you the great discrepancies in physician availability throughout the United States. You can see in places like the District of Columbia, Massachusetts, New York, Maryland, Connecticut there are a very high concentration of physicians in contrast to Idaho, Mississippi, Alaska, Oklahoma, and Wyoming. Therefore, if one were to say that there is a shortage of physicians. That might be true in Mississippi, but is far from true in the District of Columbia. So generalizations are of no real consequence. The importance is specific geographic distribution and the reason physicians migrate to these various geographic areas are multiple. Such as desirable life style, home base or the area from which they may have taken their medical training, among other reasons.
  • SLIDE # 22 – SUMMARY So, as you can see, this is a moving target and the data I presented to you is the most currently available, but will tend to change over time. You can monitor this change, since it is published, not only in JAMA, but also, in the specific specialty journals. As I stated, there are no generalizations relative to any of these things that holds, since they vary by geography. It appears, however, that the demand for primary care has remained relatively flat and compensation for primary care, such as Family Medicine; General Internal Medicine; and Pediatrics, has remained essentially flat over the past few years. On the other side of the equation, there will be significant increases in specialty and sub-specialty demand fueled by rapid evolution and procedural technology. Earlier retirement of some specialists and, of course, the aging of the Baby Boomer population, who will need more specialty care for their chronic disease management.
  • SLIDE # 23 – CARTOON - DR. LUDLOW IS NO LONGER WITH US. This of course is tongue in cheek, but one can see the analogy as noted “Doctor Ludlow is no longer with us, he has been traded to the National Surgery Center in exchange for a first round draft pick from Harvard Medical School”.
  • SLIDE # 24 – U.S. PHYSICIAN SUPPLY   As a consequence of all this, again addressing the production pipeline of Physicians practicing in the United States, you can see that from 1950 onward we have trained an increasing number of Physicians and who entered into practice. So that we now have some where around 800,000 practicing Physicians in the United States and growing, if the trending continues. More importantly Physicians per 100,000 has increased from approximately 142 to 260 Physicians per 100,000 and expected to exceed 275 Physicians per 100,000. Therefore not only is the gross number of Physicians increasing; but despite the fact that the population has also been increasing, nonetheless the number of Physicians per 100,000 has increased significantly greater than the population.   Again returning to the core issue related to whether we have a surplus of Physicians or a shortage. This data would tend to lead one to the conclusion that, all things being equal, if the production line stays constant by the year 2020 we will have approximately 900,000 Physicians in the United States. 275 Physicians per 100,000 and therefore a total perceived excess of Physicians at least from a market place supply and demand perspective.
  • SLIDE # 25 – STUDIES OF PHYSICIANS SUPPLY Again returning the basic issue of whether we have an excess number of Physicians or not or whether we have too many specialist or not. I have given you the raw data as to the growing number of graduates especially coming from I.M.G.’s and D.O. programs. The significantly growing number of residency slots what has this meant to the academic statisticians who are trying to figure out whether we have to many Physicians or to few in the United States to meet out Health Care needs. As is illustrated on this slide there have been since 1945 a significant number of studies relative to Physician supply and have been somewhat all over the place in their conclusions. Let me quickly walk through many of these in some detail so you’ll have a better understanding of the historic forces at work driving these decisions. In 1945 following World War II President Harry Truman initiated the first subsidization of Health Care using the vehicle of the GI Bill of Rights. This bill enabled Thousands of U.S. Service Men to enter Medical School through Scholarships and loans. This suddenly became an opportunity previously beyond their financial means. In 1953 a Presidential Commission studied Physician supply and predicted an impending Physician shortage. Which, the Bane Commission reaffirmed in 1959. As a consequence of these early actions two things happened of great significance. (1), the Congress opened the gates for the International Medical Graduate (I.M.G.’s) to be admitted to the United States, the consequences of that I have already detailed. (2), of equal significance almost doubled the number of positions for U.S. students by increasing the number of Medical Schools, as well as the class size in existing schools, through a variety of Federal supports funding mechanisms. The first report of the Graduate Medical Education National Advisory Committee (G.M.E.N.A.C.) was in 1980. For the first time the futurists did a 180, stating that we would soon be seeing a Physician Glut or an over supply of physicians of some 70,000 by the year 1990, and an excess of a 140,000 by the turn of the century. Subsequent studies by C.O.G.M.E. and The Bureau of Health Profession, also predicted a surplus, with only one outlyer, that being the AMA study of 1988 which took the position that there would still be a potential shortage. As is obvious from the slide, in the early 1990’s other studies were also done. C.O.G.M.E., (Counsel of Graduate Medical Education) in 1993 again predicted a surplus as did the Physician Payment Review Commission of the same year. A key study by the P.E.W. Commission, which predicted an over supply of some 100 – 150,000 Physicians by the turn of the century. Therefore Five years ago they recommended closing of Medical Schools, capping of residency slots, decreasing access by I.M.G.’s and steering approximately Fifty percent of Physicians into Primary Care. In addition they urged a shift of clinical training from being purely hospital based to more ambulatory community focus and to begin to expand the payment mechanism to an all payer pool to fund Medical Education there by not relying so heavily on Medicare funding. C.O.G.M.E. reported in 1995 that their findings were that, indeed, an excess of physicians. However, the surplus focused on certain specialties and there might well be a Primary Care balance. They enunciated, as did P.E.W., that there was a significant excess of International Medical Graduates. The Institute of Medicine (I.O.M.) also expressed concerns about the lack of addressing this impending physician surplus and recommended that (1) no new Medical Schools be opened. (2) the funding of Graduate Medical Education should closely parallel the (Continued on next page)
  • (SLIDE # 25 CONTINUED) number of fourth year Graduates from Medical School, which would thereby restrict access to I.M.G.’s. It is important to know that in New York State, which offers approximately 15% of all Graduate Medical Education positions, a significant portion of these positions are filled with I.M.G.’s. This observation did, indeed, influence subsequent legislation, which I’ll get into in a moment. The S.A.C.H.S. study in 1996 fine tuned the prediction, saying, indeed, there would be a Physician surplus, but this surplus be limited to Specialists and we might be looking at a shortage of Primary Care physicians. The AMA in November 1996 expressed concern about all these predictions, stating the obvious, that there are wide geographic variation that must be taken into consideration when looking at physician supply and imbalances. More noise impacted the situation in 1997 when C.O.G.M.E. made new recommendations: (1) cap Graduate Medical Education funding at the 1996 residency level; (2) unlink payments to hospitals for I.M.G.’s and the number of residents; (3) phase down funds for International Medical Graduates and require those with J1 visa’s to return to their country of origin ; and (4) shift Graduate Medical Education funding from hospitals toward ambulatory sites. In 1997 AMA, A.A.M.C.,The American Association of Osteopathic Medicine, the A.A.H.C., and the N.M.A promulgated an academic consensus. They too stated, “Please keep residency positions closely aligned with the number of graduates from credited U.S. Medical Schools“. Finally, M.E.D.P.A.C., (The Medical Payment Advisory Commission) recommended taking an entirely new look on how Medicare pays for Graduate Medical Education and suggested separating Graduate Medical Education payments from Medicare. They suggested combining direct Medical Education and indirect Medical Education payments into a single adjustment to the Diagnostic Related Group (D.R.G.) hospital payment, under the hypothesis that house staff are not merely being trained, but also offering a service to very sick patients, therefore, should be compensated through an enhanced patient adjustment. Without question this suggestion caused great consternation amongst the academic lobbying groups, especially the A.A.M.C. Where this suggestion will ultimately end is anyone’s guess, but MedPac. continues to pursue this concept.
  • SLIDE # 26 – PREDICTING A DEARTH OF DOCTORS This was a study published in Health Affairs, this January-February, is based on the following assumptions, and that is that the number of residency positions will hold stable; a significant proportion of international medical graduates will return to their home country; and current retirement trends will continue if not accelerate. This will also be aggravated, according to the study, due a decreased work effort, more interest in life style, and, of course, as I mentioned before, the impact of women physicians. The conclusion, as you can see on the slide, they are projecting by the year 2020 a shortage of 200,000 physicians. Just remember, however, from the previous slides that people were concerned about a surplus of physicians and that a surplus of physicians could increase health expenditures and have a negative impact on the economy. The Dartmouth Group, which has studied small area variations as well as work force trends, agree with the later. That is, now we will be seeing too many physicians who in and of themselves generate more work, as does too many hospital beds. Bottom line, however, is every year we seem to have a new elegant academic study which states whether we have too many doctors, too few doctors, too many primary care, or too few, too many specialists, or too few, geographic mal-distribution, etc, and what impact these things may have on health care demand and, therefore, health care cost. Bottom line is “I don’t think you can trust any of these findings, since they fluxuate year to year, but nonetheless, the current bandwagon, also indorsed by the Association of American Medical Colleges, is that we may very well be entering into a shortage era of physicians, but we absolutely have a mal-distribution of physicians between suburbia, and the urban poor, the rural areas, etc., as I demonstrated on an earlier slide.
  • SLIDE # 27 – NEW MEDICAL SCHOOLS As a consequence, a number of new medical schools are either opening or in the planning stages, such as in Florida and Ohio, and in one place that seems to have a medical school slot for every citizen is the state of Ohio. But nonetheless, a new school is being planned in collaboration with the Cleveland Clinic. The arguments for new medical schools are based on some of the preceding data, which I shared with you. Coupled with the fact that thousands of highly qualified U.S. applicants cannot get into medical school, because there are not enough slots; the aging of the population; the continuing of the underserved population, especially rural and inner city; and our continued reliance on international medical graduates. So the debate goes on.
  • SLIDE #28 – CARTOON – “I SPECIALIZE IN REFERRALS TO SPECIALISTS I just threw this in at this point to emphasize the fact that we not only cannot predict the future, but we also cannot predict the changing practice patterns.
  • SLIDE # 29 – MARKET FORCES As stated it is one thing to do analytical studies and futuristic projections, it is another thing to take a look at real life situations and how the Market Forces, especially Managed Care and Medicare, are impacting Health Care delivery Work Force requirements. As you know, the current Market Force is overwhelmingly Managed Care with indemnity type payments making up approximately only 10 to 13% of the market. Managed Care keeps growing very rapidly and it is now enrolled in excess of a 100,000,000 people. It is predicted to grow in the next few years to cover approximately a 130,000,000, especially if Medicare is successful in shifting Medicare eligibles from the Medicare A plus B to Medicare C risk options. Again, as we have demonstrated elsewhere, Managed Care penetration has not been equally distributed amongst the states, but with the exception of a very few like North Dakota and Alaska, there has been very significant penetration. 5 states – Oregon, California, Massachusetts, Delaware and Maryland account for almost 50% Managed Care enrollment growth.  
  • SLIDE # 30 – HOSPITAL BEDS PER HUNDRED THOUSAND AND   PHYSICIANS PER HUNDRED THOUSAND   I put in this slide to dramatize the impact of Managed Care and the supply and demand equation on the major provider groups. As you can see as a consequence of Managed Care the number of Hospital beds fell from 700 beds per 100,000 to approximately 400 per 100,000. This occurred as a result of market place adjustment to decrease supply when there was decreased demand. When as a consequence of Managed Care shifting a lot of care from the Impatient to the Ambulatory sector and significantly decreasing length of stay. Contrary wise, however, physicians have not reacted to the economy, as we have noted, and there has been an increasing number of physicians per 100,000 population. The purpose again of this slide is to show that, indeed, the Market Place is working relative to the Hospital side of the equation, but there does not seem to be any effect in controlling physicians numbers. Rather than controlling physicians numbers it is acting as a force to decrement physician income.
  • SLIDE # 31 – PHYSICIAN NET INCOME To demonstrate the impact of supply and demand on physician net income, you can see on this slide, from 1985 for the next 9 to 10 years, there was a steep increase in the average net income of physicians. This occurred in the “good old days” of indemnity payments. However you can note that in 1995 there was the first ever dip in physician net income recovering modestly in the following year. The important thing to note, however, is that there is a general flattening of the curve and compared to the general inflation or CPI, physicians are just about holding their own. As a generalization, physicians have experienced increasing overheads and have not been able keep up their same standard of living even though their net income has not diminished. Most physicians attribute this pressure to the growth of Managed Care, however, payments through Medicare have also been a significant downward pressure. As a consequence, physicians have sought many ways to augment their income, and I’ll get into some of these in a moment. However, the generalization is true that physicians’ are currently working harder and longer for less and less compensation per work unit time expended.
  • SLIDE # 32 – PHYSICIAN COMPENSATION    Looking at this by Specialty you see that the invasive, highly technical Specialties are paid significantly more than are the Primary Care Cognitive Specialties. None the less, they are also experiencing significant decrements in compensation in recent years. The Primary Care Specialties of Family Medicine, Pediatrics and Internal Medicine have remained relatively flat and General Surgery and Ob-gyn have not show any major changes either. Therefore although narrowing, the significant gap between the Primary Care Specialties and the Invasive Specialties still exist. Again, it is important to remember that no matter what happens to the absolute numbers, these have not been corrected for inflation and most analystic evaluations have come to the conclusion that physicians in various specialties, over time has lost ground against the cost of living and the cost of practice. Therefore, their net incomes are diminishing.
  • SLIDE # 33 – RATIO PHYSICIANS TO POPULATION HAS SOMETHING TO DO WITH MANAGED CARE Again getting back to our general premise of supply and demand/shortage verses glut. It is now, I believe, well demonstrated that there is a direct correlation between penetration of Managed Care and the ability of Managed Care to ratchet down the payments to physicians and hospitals. The only way physicians are able to maintain their total compensation is as stated earlier, working harder, but getting paid less per unit. On this slide you can see where there is a high ratio of physicians per 100,000, there is a higher penetration of Managed Care and less compensation.  
  • SLIDE # 34 – MAP--HMO ENROLLMENT AS A PERCENTAGE OF TOTAL STATE POPULATION   This correlates very closely with the percent of Managed Care enrollment. Demonstrating that in areas like California, Oregon, Maryland, Massachusetts and Delaware there is a high penetration of Managed Care and also a high Physician to population ratio. In contrary wise in Alaska, Idaho, Wyoming, Montana, North Dakota etc., where there is very low penetration they also have a lowest ratio of Physicians per Hundred Thousand population.  
  • SLIDE # 35 – MEDIAN PHYSICIAN INCOMES ALSO SEEM TO GO DOWN IN HIGH MANAGED CARE REGIONS   Again the core truism of the proceeding is to demonstrate that supply and demand equation of market based Health Care indeed does work and therefore where there is high Managed Care and excess Physicians supply, there is a decrement in median income. As noted a moment ago, the Hospital industry has responded to these Market Place phenomena by decreasing capacity whereas Physicians are on a 180 degree different trajectory.  
  • SLIDE # 36 – MEDIAN U.S. PHYSICIAN INCOME You can see that overall physicians’ income has risen significantly in dollars, but compared to the CPI, in other words – adjusting for inflation – it has remained flat or somewhat decreased. But, again, some physicians have done better than others, especially Radiologist, Anesthesiologist, and Cardiologist are reaping real increases and the primary care docs seem to be flat or even losing some ground. The most hard hit around the country is OB/GYN. Primarily because of the sky-rocketing medical malpractice premiums, significantly decrementing the net take-home income.
  • SLIDE # 37 – CURRENT STATUS In conclusion, there is no shortage of Primary Care as once was thought just a few years ago. There doesn’t seem to be any real market excess of specialists and sub-specialists as thought just a few years ago. There is decreasing interest in the current medical school population in General Internal Medicine, Pediatrics, and Family Medicine and, as noted earlier, there is increased interest in graduating residents in practicing in the more metropolitan areas, especially the suburbs, and a major shift in interest away from practice in rural areas and the inner city.
  • SLIDE # 38 – CARTOON WILL DO BRAIN SURGERY FOR FOOD   What is the bottom line? Will physicians polish up their C.V.’s and prepare to enter new lines of work? Perhaps some, but not the majority. In a word, probably not. Why?  
  • SLIDE # 39 – FUTURE VARIABLES   (1) experts have been wrong in the past and will probably be wrong in the future, as I earlier demonstrated, on the various studies done by sophisticated think tanks. (2) the market adjusts, Medical Students in their wisdom select Graduate programs and are beginning to shift away from some programs that they believe are in over capacity such as Primary Care. In addition, a number of prestigious institutions like Massachusetts General, The Bringham, Duke etc., are in the process of voluntarily decreasing their number of residency slots. (3) technology is X factor. If the past is a predicate for the future, as new break through come on line, more physicians, especially Specialists, will be needed to administer these break-throughs, such as Genetic Engineering and Stem Cell Therapy. (4) pathologies never sleep and new illnesses emerge, especially in the arena of infectious disease with, of course, AIDS being a significant case in point or Mad Cow disease and West Nile virus. (5) demographic changes. The baby boomers are getting older and more people are living in excess of 85 years of age. As we all are all aware, it is this segment of the population that requires the majority of medical and surgical intervention and, therefore, the greatest expenditure of human and physical resources and, perhaps, increasing Specialty care. (6) consumerism, the baby boomers and others are demanding patients. They want what they want, when it they want it, with high quality and at a competitive price. Since they control most of the disposable income and purchase the vast majority of Health Care, they will have a significant impact on the Health Care market place. In addition, they will be the major drivers for “patients rights” legislation to modify the current profile of Managed Care programs.
  • SLIDE # 40 – PRACTICE CHOICES CARTOON    How will Physicians react? As illustrated on this cartoon, physicians are confused, angry and have overall poor morale. They do not know whether they should get involved with Managed Care, join an integrated delivery system, get involved with an I.P.A., join a physician Hospital Organization, turn to a practice management company, or form their own P.A.’s. Hire a Medical Services Organization or whatever. Again it will be the typical grief reaction moving from anger to depression. Railing against the unfairness and the change in rules of the game, without their consultation, in the middle of their career. They find now that the rules have been changed and that they resent that a great deal. They will look to find scapegoats outside of themselves and scapegoats will primarily be embodied in Managed Care and Governmental programs and interference, the latter especially in the area of compliance.  
  • SLIDE # 41 – CARTOON – LET’S STOP AND THINK ABOUT THIS   As depicted in this cartoon, ideally, doctors and hospitals should seek and establish a collaborative middle ground – it should result in a win-win situation. However, like a number of common sense, self evident concepts, there is frequently a major gap between conceptualization and action.  
  • SLIDE # 42 – EMPLOYMENT STATUS AND EMPLOYER    Distribution of physicians by practice type and employer. Where in general are we? Although this is a slightly dated slide, the data is still the same. That is, that some 25% of Physicians remain in solo practice; and 30% in self-employed group practice and approximately 40% are employees of a variety of organizations such as HMO’s, Group Practices, Hospitals, Academic Centers, State Governments etc.  
  • SLIDE #43 - UNIONS
  • SLIDE # 44 – JUST WHAT THE DOCTOR ORDERED THE AMA VOTES TO FORM A UNION   As we all know Professionalism and unionization have not usually been considered compatible bedfellows. Nonetheless, physicians in their desperation to create some leverage against Managed Care and other forces of the market place, have turned to unionization. The AMA in 1999 did the unthinkable and endorsed the start of a Physician Union for employed Physicians. They call the union P.R.N. (Physicians for Responsible Negotiations) and stressed that they pledged that they will never strike or withhold medical care to patients. As you can see on the slide, their primary focus is the 26% of institutionally employed physicians. Parenthetically, of course, the AMA is not alone and many other unions are focusing on employed physicians.  
  • SLIDE # 45 – CASE AT A GLANCE This recent Supreme Court decision, although it was related to nurses and not physicians, has thrown a whole new light on the subject of physicians’ unions since one could interpret the issue of a professional who uses independent judgment to direct the work of others is a supervision who is unable to collective bargain to fit right in with the definition of a physician.
  • SLIDE # 46 – CARTOON – “LOOKS LIKE YOU NEED A NEW FLUTE!!” This is, therefore, dampened the enthusiasm about physician unions under current law. And although the AMAs off-shoot subsidiary called “Physicians for Responsible Negotiations – PRN” is being continued
  • SLIDE # 47 – CARTOON – DOCTOR WITH UNION POP GUN There is a lot of concern about the Supreme Court decision. There is a lot of concern about physician unions to begin with. Nonetheless, there is some energy in the Congress to legislate the legitimatacy of collective bargaining for physicians.
  • SLIDE # 48 - STATUS OF STATE PHYSICIANS ANTI TRUST EXEMPTIONS   As you can see on this slide, a number of states have passed legislation allowing collective bargaining and anti-trust exemptions for physicians, however, to-date these have been very ineffective. Since there was nothing in those laws to force managed care or any other entity to negotiate with these physicians in any type of collective bargaining. 
  • SLIDE # 49 – MALPRACTICE CRISIS I am not going to get into this subject except to make sure that you note that this is a significant issue, that malpractice insurance has escalated in cost tremendously this last year. More and more insurers are dropping out of the physician malpractice insurance market. Many areas of the country, such as Nevada and West Virginia are finding an exodus of physicians, especially in OB and Neurosurgery, where the premiums are so high that it is economically not feasible for these physicians to practice their specialty in these various regions, and, therefore, are moving to other areas. Some are not doing certain parts of their specialty, i.e. OB and others seeking early retirement. Malpractice costs have escalated due to a variety of reasons: 1) the litigious nature of the American public, with the average malpractice settlement being approximately $1 million and 2) due to the fact that the malpractice insurers have taken a significant beating on their other products as a result of natural disasters, September 11 th , and the Wall Street crash.
  • SLIDE # 50 – WHAT IS YOUR SINGLE GREATEST SOURCE OF PERSONAL FRUSTRATION   This survey of physicians demonstrates not only that there is significant frustration, but also where it’s coming from. Without question the major source of frustration is the emergence of Managed Care as the major payer for Health Services. That is, compounded by governmental regulations and compliance, working longer hours in order to make up for decremental payments, etc. As stated physician morale is low and they are beginning to doubt if they should continue in the practice of medicine.  
  • SLIDE # 51– IN THE NEXT ONE, TWO OR THREE YEARS DO YOU PLAN TO….?   I believe this is a telling slide, since almost 40% of the physicians surveyed said that they plan to retire. Some will seek employment in a non-medical setting, and others will close their practice to new patients or reduce their workload. Bottom line is that a number of physicians are saying they have had enough; the long hours of paperwork and continued hassles are forcing them to look at retirement earlier than they had planned. They are angry with “Administrators” telling them how to practice and deciding what is “medically” necessary. How this retirement trend will impact the work force numbers of supply and demand; shortage versus glut; is yet to be seen. All of this discussion of physician production; analytical studies; impact of the market place; and reactions to the market place; shows that the future profile of the medical profession is still in flux, are unsettled and undetermined. However, conventional wisdom states that majority of physicians are bright, well-motivated individuals interested in delivering high quality care to patients. They will maintain their professionalism, they will reassess their values and accept this major cultural shift and move into a more effective behavioral mode that will allow physicians to reassert their leadership role and help reconfigure the Health Care market place of the future. Precisely how this will be accomplished is beyond anyone’s ability to predict at the moment.  
  • SLIDE # 52 – A SYMPTOM OF DISCONTENT In the January 18, 2001 edition of the New England Journal of Medicine, there was an editorial entitled “A Symptom of Discontent”. I believe that this is a very stimulating editorial which keyed off an article in the same issue of the New England Journal demonstrating that although many physicians believe that they are not able to spend as much time with the patients as they did in the past, that turned out not to be the case, the study clearly demonstrated that the length of office visits did not decline as was widely assumed. The editorial goes on to say that the sense of not having enough time is a reflection of a wider problems and pressures that physicians face and is really a symptom of a generalized physician discontent with the current health care system. Their inclination is to point to Managed Care as the cause of every problem that they have. Ironically, the discontent is greater among the physicians than it is among patients, who are remarkably satisfied with their care. Therefore, the basic issue is that physicians are working harder and harder to maintain their income level and, unfortunately, much of the physicians dissatisfaction is caused by problems in this country’s basic market-based health care system, that will be very difficult for them to change as individuals.
  • SLIDE # 53- SUMMARY PHYSICIANS IN THE NEW ENVIRONMENT   The bottom line, however, is that the physicians who thrive and are successful in the new Environment will have the following attributes. At center, of course, they will continue to maintain quality clinical knowledge and skill. They will have a full understanding of the Health Care System and how to work within it. As a result they will organize their practice management system using that knowledge and skill set. They will then appropriately allocate Health Care resources for quality care and cost effectiveness and ultimately continue to be advocates of their individual patients.  
  • SLIDE # 54 – CONCLUSION I have attempted this morning to briefly outline the program we plan for you for the year in order to prepare you for the practicalities of entering into the health care market place as practicing physicians and in this brief overview, try to give you a backdrop of some trend data on the number of physicians, the market forces at play, how they impact compensation, how they impact choice of location, and current and future opportunities and concerns facing the physicians of today and tomorrow. With that I will conclude and will be glad to respond to any questions at this time or at the end of the session and move on now with this data in your head as to how this will impact your leverage in contract negotiations, which will be presented by Mr. William Kalish. Thank you.
  • Preparing for practice

    2. 2. <ul><li>Work Force Overview - - - - - - - - - - - - - - - - - - Ronald P. Kaufman. M.D. </li></ul><ul><ul><li>How to Interview and Assess Opportunities - - Janie Hirsch </li></ul></ul><ul><ul><li>Contract Negotiations - - - - - - - - - - - - - - - - - - William Kalist, J.D. </li></ul></ul><ul><li>Ten (10) 1 hour noon conferences from October 8, 2002 through </li></ul><ul><li>February 19, 2003 at VA and TGH, covering: </li></ul><ul><ul><li>Pros and Cons of a Large Multi-specialty Group Practice </li></ul></ul><ul><ul><li>Small Group Practice </li></ul></ul><ul><ul><li>Leaving One Practice and Joining Another or Going into Solo Practice </li></ul></ul><ul><ul><li>How to Avoid Malpractice Suits </li></ul></ul><ul><ul><li>Proper Way to Apply for Full Medical Licensure in the State of Florida </li></ul></ul><ul><ul><li>Basic Financial Terms Part I </li></ul></ul><ul><ul><li>Basic Financial Terms Part II – will cover student loan repayment </li></ul></ul><ul><ul><li>Pursuit of Perfection </li></ul></ul><ul><ul><li>Gross Earnings vs. Spendable Income </li></ul></ul><ul><ul><li>Personal Financial Planning </li></ul></ul><ul><ul><li>Risk Management – i.e. Malpractice Issues </li></ul></ul><ul><ul><li>Government Compliance Requirements </li></ul></ul><ul><ul><li>H.I.P.A.A. </li></ul></ul>Outline of Program “Getting A Job”
    3. 4. or Shortage GLUT ?
    4. 5. Make Up Your Mind How Many Doctors the Community Needs to Keep it Well Do Not Register More or Less Than This Number. George Bernard Shaw, &quot;The Doctor's Dilemma&quot;
    5. 6. The Production Line <ul><li>Students </li></ul><ul><li>Residents </li></ul>
    6. 7. SOURCE: AAMC Data Warehouse National Medical School Applicant Pool 1990-2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
    7. 8. SOURCE: AAMC DATA Warehouse: 2000 Applicant Matriculant File A Decade of Progress 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 The ranks of women in medical school have increased more than 20% over the last 10 years
    8. 9. Impact of Projected U.S. Medical School Graduations and Retirements 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2020 2012 2014 2016 2018 2020 * Graduates are projected to retire after 35 years of practice. ** Graduates from 1997-2020 are estimated to remain constant. Estimated Retirements* National Graduates** Source: MGT of America, Inc. From Assessment of the Adequacy and Capacity of Florida’s Medical Education System , 1999 Net increase in U.S. medical graduates entering the work force
    9. 10. YEAR M.D. DO DO as GRANTING GRANTING % of TOTAL 1970 40,487 2,151 5.0% 1975 55,818 3,443 5.8% 1980 65,189 4,940 7.0% 1985 66,585 6,608 9.0% 1990 65,163 6,792 9.4% 1995 67,276 8,961 11.7% Total Enrollment in U.S. Medical Schools
    10. 11. Source: 1999 Medical School Graduation Questionnaire, All Schools Report - AAMC What 1999 Graduates Owe
    12. 14. Location Financial package Call/coverage Lifestyle amenities Loan forgiveness Specialty support (% ranking it first or second) SOURCE: Merritt, Hawkins & Associates 1999 Survey of Final-Year Medical Residents Criteria for choosing a practice 1999 1997
    13. 15. (% citing it) 33% Multi-specialty group 25% 29 Single-specialty group 31 13 Partnership 15 4 Hospital employee 8 6 Outpatient clinic 8 2 Solo 4 5 Association ¹ 2 5 HMO 1 5 Other ² 6 1997 1999 ¹ An arrangement whereby physicians share staff and office, but not finances. ² Includes academic, locum tenens, urgent care, and no preference. Source: Merritt, Hawkins & Associates 1999 Survey of Final-Year Medical Residents Type of practice they seek
    14. 16. 1995 1997 <ul><li>Finding a job </li></ul><ul><li>Right practice setting </li></ul><ul><li>Indebtedness </li></ul><ul><li>Having free time </li></ul><ul><li>Malpractice climate </li></ul><ul><li>Managed care </li></ul><ul><li>Medicine as a career </li></ul><ul><li>Health reform </li></ul>1999 SOURCE: Merritt, Hawkins & Associates 1999 Survey of Final-Year Medical Residents Right Practice Setting What Concerns Senior Residents Most? FINDING A JOB FINDING A JOB
    15. 17. Practices were desperately seeking ... in 2001 in 1997 % % 2% Anesthesiologists 10% 3% Radiologists 16% 3% Psychiatrists 16% 10% Emergency medicine 4% 11% IMs 8% 17% Others 22% 54% FPs/GPs 13% Pediatricians 2% Cardiologists 2% Orthopedic Surgeon 3% Child psychiatrists 4% 1997 2001
    17. 19. Immediate job openings! The top 10 states with shortages of primary care doctors Source: Bureau of Primary Health Care, Health Resources & Services Admin, US Dept. of Health and human Services Texas 1,103 Number Of Doctors Needed U.S. Total needed 12,098 Calif. 757 Ohio 372 N.Y. 824 Mo. 406 Ga. 530 Ala. 445 Ill. 381 Mich. 489 Fla. 631
    18. 20. U.S. Overall 227 There's not as much competition in these states Idaho 144 Physicians Per 100,000 In population Alaska 154 Nev. 160 Okla. 155 Wyo. 156 Miss. 148 Iowa 156 S. D. 170 Ark. 175 Ind. 178 States with the lowest doctor-to-population ratios Source: American Medical Association
    19. 21. Want to avoid managed care? States with the lowest HMO enrollment as a % of total population Source: InterStudy Publications, US Census Bureau HMO penetration rate United States (overall penetration) 29.7% Alaska 0% Idaho. 7.9% Miss. 1.1% S.D. 6.7% Ala. 7.2% N.D. 2.5% Mont. 7.0% Iowa 7.4% Wyoming 1.4% VT 4.6%
    20. 22. PHYSICIAN SUPPLY States with most physicians per capita States with fewest physicians per capita District of Columbia 811 Massachusetts 454 Maryland 413 New York 423 Connecticut 387 Idaho 179 Mississippi 180 Oklahoma 187 Alaska 186 Wyoming 188
    21. 23. SUMMARY <ul><li>Job opportunities not as readily available as in the past </li></ul><ul><li>Varies by specialty and varies by geography </li></ul><ul><li>Shifts year to year </li></ul><ul><ul><li>in demand </li></ul></ul><ul><ul><li>in compensation </li></ul></ul><ul><ul><li>in specialty opportunities </li></ul></ul><ul><li>Primary Care - demand and compensation flat </li></ul><ul><li>Selective specialty demands will grow: </li></ul><ul><ul><li>increase in procedural technology and demand </li></ul></ul><ul><ul><ul><li>radiology; cardiology; G.I. </li></ul></ul></ul><ul><ul><li>increase in early retirement </li></ul></ul><ul><ul><li>aging of America </li></ul></ul>
    22. 25. Reproduced from Lohr and Colleagues (5) Physicians per 100,000 Population 142.2 141.6 155.8 195.9 236.9 260.7 274.4 266.0 Supply (1000s) 300.0 250.0 200.0 150.0 100.0 50.0 0.0 U.S. Physician Supply
    23. 26. STUDIES OF PHYSICIAN SUPPLY _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ STUDY DATE CONCLUSION Harry Truman 1945 Shortage President’s Commission 1953 Shortage Bane Commission 1959 Shortage GMENAC 1980 Surplus COGME 1988 Surplus BHP 1988 Surplus AMA 1988 Shortage COGME 1993 Surplus PPRC 1993 Surplus Pew Commission 1995 Surplus COGME 1995 Specialist Surplus IOM 1996 Geographic Variations SACHS 1996 Specialist Surplus/PCP Shortage JAMA 1996 Geographic Variations COGME 1997 Surplus Academic Consensus 1997 Surplus Med PAC 1999 GME payment reform DEFINITIONS: GMENAC -Graduate Medical Education National Advisory Committee COGME - Council on Graduate Medical Education BHP - Bureau of Health Professionals PPRC - Physician Payment Review Commission Med PAC - Medicare Payment Advisory Commission
    24. 28. Predicting a Dearth of Doctors 1929 2000 2010 2020 Physicians, total 144,000 772,000 887,300 964,700 Physicians/100,000 pop. 119 270 283 280 Population (in Millions) 121 286 325 345 Effective supply adjustment - 5% -7% Storage of physicians 50,000 200,000 2010 and 2020 projected using Cooper, et al, Trend Model; assumes 1 st -year residents holds steady at 23,000 a year, 20% of IMGS return to home country, and current retirement trends continue. Adjustment due to reduced work effort, including a 10% reduction in production by physicians ages 55 to65 and a 20% production reduction in women physicians (American Journal of Public Health, 1990). Source: Health Affairs, January/February
    26. 30. I specialize in referrals to Specialists.
    27. 31. MARKET FORCES
    28. 32. ‘ 75 ‘79 ‘80 ‘83 ‘85 ‘87 ‘90 ‘91 ‘95 ‘96 Source: Kaiser Family Foundation analysis of American Hospital Association and U.S. Bureau of the Census data; and American Medical Association, Physician Characteristics and Distribution in the U.S., 1997-98 Edition. Hospital Beds Physicians Hospital Beds/100,000 Population, 1975-1995 and Non-Federal Physicians/100,000 Civilian Population, 1975-1996
    29. 33. Source: AMA PHYSICIAN NET INCOME $94,000 $100,000 $108,000 $120,000 $125,000 $130,000 $139,000 $148,000 $156,000 $150,000 $160,000 $166,000 $164,000
    30. 34. (MGMA) Physician Compensation and Production Survey 1998 Report Based on 1997 Data $500,000 $400,000 $300,000 $200,000 $100,000 Surgery: Cardiovascular Cardiology: Invasive Surgery: Orthopedic Radiology: Diagnostic Cardiology: Non-invasive OBGYN Surgery: General Neurology Internal Medicine Pediatrics PHYSICIAN COMPENSATION Family Practice
    31. 35. 195 (18) 151 (50 171 (37) 189 (31) 139 (48) 157 (45 151 (44) 183 (33) 180 (32) 147 (47) 160 (43) 146 (46) 176 (35) 206 (16) 182 (25) 180 (30) 173 (40) 203 (23) 130 (51) 170 (41) 180 (36) 197 (27) 208-(20) 176 (38) 194 (24) 180 (39) 166 (42) 200 (22) 196 (26) 190 (29) NH-189 (19) NJ-249 (8) Source: AMA, Physician Characteristics & Distribution in the US,1996-97 Ratio of Physicians/100,000 Population 228 (10) 179 (34) The Ratio of Physicians to Population Has Something to do with Managed Care Low Concentration 142 (49) 202 (15) High Physician Concentration Areas 217 (11) 203 (12) 221 (14) 215 (13) 208 (17) 316 (3) 246(9) DC - 536 (1) ME-182 (28) VT- 242 (7) MA-332 (2) RI-267 (6) M.D.- 299 (4) Del-197 (21) CT-295 (5)
    32. 36. Wash. 19% Ore. 39% Idaho 7% Mont. 5% Wyo. 3% S.D. 5% Iowa 13% Neb. 11% Kan. 19% Okla. 15% Ark. 12% Calif. 55% Nev. 25% Utah 37% Colo. 38% Ariz. 32% N.M. 37% Alaska 0% Hawaii 45% Texas 19% La. 17% Miss. 4% Fla. 33% Ala. 7% Ga. 18% Mo. 31% Tenn. 40 % S.C . 12% N.C. 17% Va. 21% W.V . 11% Ky. 38% Ill. 20% Ind. 17% Ohio 25% Minn. 29% Wis . 31% Mich. 27% N.Y. 38% Me. 24% Vt. 26 % N.H. 34% Mass. 42% R.I. - 50% N.J. -29% Md. - 34% Del. - 49% Pa. 45% Conn. - 41% All HMOs: 25% Source: Medical Data International Inc., April 2000 N.D. 3% HMO Enrollment as a Percentage of Total State Population - 31% - 100% 21% - 30% 11% - 20% 0% - 10%
    33. 37. Mountain $151,000 West Central $160,000 New England $140,000 Mid- Atlantic $173,000 Pacific $165,000 Source: Integrated Healthcare Report Median Physician Incomes Also Seems to Go Down in High Managed Care Regions East North Central $164,000 South Atlantic $164,000 East South Central $175,000 East South Central $175,000
    34. 38. MEDIAN U.S. PHYSICIAN INCOME Source: American Hospital Association NOMINAL REAL (1998 $) ($ In Thousands)
    35. 39. Current Status NOW No shortage of Primary Care No excess of Specialists <ul><li>Decreasing interest in: </li></ul><ul><li>Internal Medicine </li></ul><ul><li>Pediatrics </li></ul><ul><li>Family Medicine </li></ul><ul><li>Geographic mal-distribution </li></ul><ul><li>Shift to the suburbs </li></ul><ul><li>Shift away from rural & </li></ul><ul><li>inner city </li></ul>
    36. 41. FUTURE VARIABLES <ul><li>Experts have been wrong in the past </li></ul><ul><li>Market adjusts </li></ul><ul><li>Technology </li></ul><ul><li>New Pathologies </li></ul><ul><li>Demographic changes </li></ul><ul><li>Consumerism </li></ul>
    38. 44. <ul><li>Self-employed solo 25.9% </li></ul><ul><li>Self-employed group 30.7% </li></ul><ul><li>Employee: </li></ul><ul><li>Health maintenance organization 2.7% </li></ul><ul><li>Group practice, free-standing center 11.1% </li></ul><ul><li>Private hospital 7.3% </li></ul><ul><li>Medical schools, universities, colleges 7.0% </li></ul><ul><li>State and local government 9.6% </li></ul><ul><li>Unknown 1.1% </li></ul><ul><li>Independent contractor 4.7% </li></ul><ul><li>* </li></ul>1997 DISTRIBUTION OF PHYSICIANS BY PRACTICE TYPE AND EMPLOYER* Source: AMA Center for Health Policy Research EMPLOYMENT STATUS AND EMPLOYER Percentages do not sum to 100 because of rounding
    39. 45. UNIONS
    40. 46. Source: AMA Center for Health Policy Research The AMA votes to organize a union It’s just what the doctors ordered: TOO MUCH FOR TOO FEW? AMA leaders say only a fraction of practicing physicians would be eligible to participate in an AMA- run collective bargaining unit: The 290,000-member association -- which represents 34 % of the nation’s doctors, down from 45% a decade ago -- also felt pressure to act because some of the most powerful unions have moved aggressively to organize doctors, eroding the AMA’s base and making it seem timid to its members. Specifically, the AMA voted to set up a branch to unionize two groups of doctors, salaried employees and medical residents, who together represent about 1/3 of America’s 620,000 practicing physicians. The association also said it would work to unionize some of the 325,000 self-employed doctors, but to do that it must persuade Congress to give those doctors the right to bargain collectively. Eager to reassure patients, AMA See UNION, Page 7 CHICAGO - The American Medical Association bows to a growing chorus of physicians who say they lack power in managed care. A Tribune staff, wire report The American Medical Association, saying doctors are frustrated in efforts to deliver quality care, took the extraordinary step of forming a labor union Wednesday to give physicians more power in dealing with managed care insurers. For the 152-year old AMA, long one of the nation’s most conservative institutions, the vote at a delegates meeting represent- ed an angry outcry by doctors who complain they have lost too much power in today's health care system. Institutional Employees 26.6% Employees of MD-owned Groups 9.4% Self-employed MDs 64%
    41. 47. CASE AT A GLANCE National Labor Relations Board v. Kentucky River Community Care, Inc. Venue: U. S. Supreme Court At Issue: The court said a professional who uses “independent judgment to direct the work of others is a supervisor who is unable to collectively bargain. Potential Impact: The decision is expected to make it more difficult for privately employed physicians to unionize.
    42. 50. Status of State Physician Antitrust Exemption Legislation Source: National Conference of State Legislatures Pending legislation Legislation enacted
    44. 52. What is your single greatest source of personal frustration? Source: Merritt, Hawkins & Associates Managed Care 56% Medicare/Medicaid regulation/billing: 15% Patient attitudes: 8% Malpractice worries: 6% Pressure of running a business: 6% Long hours: 4% Other: 5%
    45. 53. In the next one to three years, do you plan to ...? Retire 38% Continue as you are: 18% Close your practice to new patients or significantly reduce work load: 16% Work locum tenens: 12% Seek employment in non-clinical or non-medical setting: 10% Other: 4% Source: Merritt, Hawkins & Associates
    46. 54. A SYMPTOM OF DISCONTENT N.E.J.M., Vol. .344, No. 3 January 18, 2001
    47. 55. Clinical knowledge and skill SUMMARY: PHYSICIANS IN THE NEW ENVIRONMENT Understanding the health care system Stewardship: Appropriate allocation of health care resources for quality care and cost effectiveness Advocacy and accountability for individuals and panels Organized practice management systems
    48. 56. CONCLUSION CONCLUSION <ul><ul><li>current and future opportunities and concerns </li></ul></ul><ul><li>Outlined the program and its goals and objectives </li></ul><ul><li>Offered trend data on: </li></ul><ul><ul><li>numbers of M.D.s </li></ul></ul><ul><ul><li>market forces at play </li></ul></ul><ul><ul><li>compensation trend </li></ul></ul><ul><ul><li>forces impacting choice </li></ul></ul>
    49. 57. ANY QUESTIONS