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Physicians - the next victims of "downsizing?"

THE VOICES OF DOOM HAVE SPOKEN. THANKS largely to managed care, a variety of health care experts maintain the United States will soon have an enormous surplus of physicians. According to a 1995 study published by the Journal of the American Medical Association, the U.S. will have 160,000 superfluous medical practitioners by the year 2000, including about 135,000 too many specialists and about 25,000 too many primary care physicians.[1] A March, 1996 article in JAMA reported that some newly graduating residents were having trouble finding jobs.[2]

In addition, earlier this year two separate panels, the Pew Health Commission[3] and the National Academy of Sciences Institute of Medicine,[4] advocated reducing the surplus of physicians by cutting residency programs, reducing the size of entering medical school classes, and shutting the door on international medical graduates. Meanwhile, an outplacement firm staged a seminar in New York City to discuss what should be done with all the unfortunate physicians who will soon be on street corners selling pencils.

Should physicians really be polishing up their CVs or preparing to enter another line of work? In a word: No.

This conclusion is drawn not from projections of ideal physician-to-population ratios based on the hypothetical future penetration of managed care, but from 16 years of practical experience in the physician recruiting industry. This experience yields the following points.

1. The experts have been wrong in the past. Similar discussions took place in 1980, when the federal government-appointed Graduate Medical Education National Advisory Committee (GMENAC) predicted a surplus of some 70,000 physicians by 1990.[5] GMENAC's report notwithstanding, the 1980s were a period of intense physician recruitment and full employment for physicians.

2. The market adjusts. In the go-go 1980s, medicine was seen as a tarnished profession. It was expensive to get into, and the training was exhaustive. Besides, an enterprising young man or woman could become a stockbroker in half the time it took to become a physician and earn twice the money. Times change. Applications to America's 126 medical schools reached an all-time low in 1988, but are at an all-time high today. More importantly, medical students are now going where they are needed--into primary care. In the late 1980s, only about 15 percent of graduating medical students were opting to enter primary care. More than 50 percent selected primary care in 1996, the second year in a row that over half of graduating medical students chose to enter generalist medicine.

3. Technology is the X factor. Part of the reason the U.S. leads the world in health care is our emphasis on technology. American Medical News reports that in 1992, the U.S. had 2,200 MRIs--100 times as many as Canada which has one-tenth our population.[6] The U.S. has 5,100 CT scanners, 25 times as many as Canada.[6] As new breakthroughs come on line, more specialists are needed to administer them. Scopes, angioplasties. improved cataract surgery, better diagnostic imaging, joint replacement, new drugs, and genetic testing are recent technologies that ensure the need for specialists.

4. Pathologies never sleep. AIDS is only one of a series of emerging health problems that require a gamut of specialists to treat. Rising cancer rates, the challenge of drug-resistant viruses, the resurgence of old enemies like tuberculosis, and the expanding problems brought on by drug use, poor prenatal care for teenage mothers, and other social ills all require medical specialists. Who knows what kinds of health problems new viruses or environmental hazards will create in the future?

5. The clock is ticking. The graying of America is an acknowledged fact. According to the Census Bureau, the number of Americans 65 years old or older will double from 35 million today to 70 million by the year 2030. It is this segment of the population that requires the angioplasties, joint replacements, testing, and other services that specialists provide. What is less well known is that the physician population also is aging. American Medical Association statistics show that almost one in three physicians is 55 years old or older.[8] There is a good deal of evidence to suggest that many of these physicians, irked by managed care and increased government interference, are opting for early retirement. A survey published in Medical Economics shows that fully 21 percent of physicians 50 years old or older plan to retire in 1996.[8] Early retirement will have an increasingly important effect on physician supply as managed care spreads.

6. The consumer has not spoken The triumph of managed care is often taken as a fait accompli, but the issue is still in doubt. Consumers have not yet determined whether or not they are willing to live with restricted access to specialists. There is reason to believe that they are not. Point of service HMOs, which allow enrollees more autonomy in choosing specialists, are gaining market share in head-to-head competition with more restrictive plans. Nowhere in the economy are people with the means to pay prevented from getting the goods and services they want, whether they tare seeking high-end automobiles or illegal drugs. It doesn't seen likely to happen in health care.

7. Physicians are still in demand. The National Association of Physician Recruiters estimates that there are 4,000 physician recruiters in America--or one for every four graduating medical residents entering the job market. The majority of hospitals have their own in-house recruiters in addition to the 300+ physician recruiting firms. Merritt Hawkins & Associates' first annual survey of the top 10 employment markets for physicians indicates that more than 70 percent of the nation's hospitals and more than 60 percent of medical groups with five physicians or more are actively recruiting physicians. While most of these health care facilities are seeking primary care physicians, the survey shows that there are still a number of markets where a variety of specialists are needed. The top 10 markets in alphabetical order, are:

1. Eastern Washington State 2. Evansville, Indiana 3. Fargo, North Dakota 4. Mississippi Gulf Coast 5. North Central Florida/Panhandle 6. Northwest Arkansas 7. Quad Cities, Iowa/Illinois 8. Springfield, Missouri 9. Southern California 10. West Texas

What the survey makes clear is that while managed care is driving physicians from some markets, jobs are still available in other markets traditionally underserved by physicians:

Fargo, North Dakota, for example, is rural and has a traditionally low physician-to-population ratio. A growing college community with four hospitals, Fargo needs primary care physicians, orthopedic surgeons, cardiologists, and neurosurgeons.

Springfield, Missouri is an example of a mid-sized city undergoing health care realignment due to the recent arrival and expansion of managed care. The three hospitals in the community are vying for managed care contracts and consequently need primary care physicians, as well as a complement of specialists, such as OB/GYNs and general surgeons.

Southern California, by contrast is a major urban region with a high rate of managed care that nevertheless needs additional physicians. Though some physicians are leaving Los Angeles due to the downward financial pressure imposed by managed care, a variety of physicians are needed in the growing outlying areas, such as the Inland Empire and the High Desert. Physicians in most specialties, who are bilingual in English and Spanish, are in particular demand.

This is not to suggest that the physician employment market has gone unchanged. Many physicians, particularly specialists, have taken income hits, and some specialists truly are in need of work. Anesthesiologists are in a vulnerable position, and radiologists also are encountering difficulties in finding adequate employment. Primary care physicians, however, have seen their stars rise and are now in a position to work wherever they want.

To accommodate these changes, physicians will have to rethink the way they go about seeking practices. They may no longer be able to practice within 50 miles of where they were raised or where they were trained, as has been their wont. Instead, they will have to do what other professionals have long done--go where job opportunities take them. In short, they will have to add a career strategy to their scientific mindset, and that means an aggressive job search, coupled with a strong consumer orientation. Yes, some physicians may see a little rain, but that doesn't mean that the sky is falling.


[1.] Weiner, J P. Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirements: Evidence from HMO Staffing Patterns. JAMA, July 20, 1994; 272(3)222-230.

[2.] Miller, R.S., Jonas. H.S., Whitcomb, M.D. The Initial Employment Status of Physicians Completing Training in 1994. JAMA, March 6, 1996: 708-712.

[3.] Critical Challenges: Revitalizing the Health Professions for the 21st Century. Pew Health Commission, 1996 San Francisco, CA.

[4.] The Nation's Physician Workforce: Options for Balancing Supply and Requirements. National Academy of Sciences Institute of Medicine 1996, Washington, D.C.

[5.] Summary Report of the Graduate Medical Education National Advisory Committee to the Secretary of Health and Human Services, 1980. Washington D.C.

[6.] American Medical News, November 14, 1991, page 41.

[7.] Physician Characteristics and Distribution in the US., 1995/96 edition, American Medical Association, Chicago, IL.

[8.] Terry, K. Forecast for Doctors: Stronger Winds of Change. Medical Economics December 11, 1995, p. 161-171.

James Merritt is President of Merritt, Hawkins Associates, a national health care staffing firm based in Irving, Texas. Mr. Merritt can be reached at 800/876-0500. The firm's web page can be accessed at http.//
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Author:Merritt, James
Publication:Physician Executive
Date:Aug 1, 1996
Previous Article:Can we still earn a living caring for sick people?
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