Looming Shortage of Physicians: Graduates of Foreign Medical Schools

In my previous post, I begin discussing the projected looming shortage of physicians. Here and here are 2 interesting articles that analyze the phenomenon.

The mechanism to fund residency slots need to be reformed to increase the supply of physicians in the U.S.

The U.S. could increase the supply of physicians by over 5,000 annually if it found residency slots for graduates of foreign medical schools who pass all of their examinations to be eligible for a U.S. residency slot but don't get a position because of the shortage of slots available. See the Educational Commission for Foreign Medical Graduates fact card which is linked to here which details the shortage of residency slots (over 5,000 annually compared to surplus supply of qualified physicians). In fact, for the past 3 years, only 42%-44% of these qualified physicians have successfully obtained residency positions.


There is one dirty secret about the impending physician shortage. The primary funding for residency slots come from Medicare and the number of residency slots funded have been capped at the 1996 level (~100,000 positions annually) based on the Balanced Budget Act of 1997. Therefore, even if our medical schools produced an infinite number of graduates, these graduates could not obtain a license to practice medicine until they finished their residencies, and they cannot do that due to the acute shortage of slots available.

There isn't a shortage of physicians, rather there is a shortage of political will among policy makers and politicians to fix this looming man-made disaster. If you show up do your doctor's office and there is nobody their to treat you - unless you are connected or willing to wait a while - like weeks or months - you will know who to blame.

Impending Physician Shortage: Lessons in Supply and Demand:

The above image was taken from here. All rights are served to the Association of American Medical Colleges (AKA the AAMC).

Lately, in conversations with physicians and corporate health plan executives, I have been hearing a lot about the expected shortage of physicians in general and of primary care physicians in particular. The Association of American Medical Colleges forecasts a shortage of 90,500 physicians by 2020. This is due to a confluence of factors including:

1. Many physicians retiring
2. Not enough physicians being graduated from American Medical Schools
3. An estimated 30,000,000 additional Americans who are going to have health insurance from Obamacare
4. The aging of America as baby boomers become senior citizens and require more healthcare services
5. Low reimbursement rates from Medicare and other payors for primary care physicians

Personally, I believe that we won't experience the acute shortage of physicians that many are forecasting. I believe with some minor policy changes, we can properly align incentives to promote an equilibrium quantity of physicians in general and primary care physicians in particular.

I will discuss this more fully in a later post but some ideas to think about:

1. Increase the quantity of Nurse Practitioners and Physicians Assistants
2. Create more residency slots so we can allow more newly minted physicians to place into residencies after completing their medical education. Also, this will allow more foreign medical school graduates to find residency positions which will also increase the quantity of physicians available
3. Mandate more residency slots be offered in areas where shortages exist like the primary care field and less in specialties which offer high reimbursements but no shortages of docs
4. Technological innovations like primary care physician software that automatically orders specific tests and tracks certain metrics (like weight, blood pressure, glucose, etc) to help physicians monitor health without as many office visits
5. Increased use of email, teleconferences, and videoconferences for physician-patient contacts to answer minor questions when a full appointment is not really needed

To be continued....