Supply Factor: Trends in Physician Employment
For two decades, health planners have been forecasting impending physician surpluses and policy decisions related to medical schools and residency programs have been based on these expectations. However, the much-heralded surpluses never materialized and a growing body of data and opinions now point in the other direction. The question is whether the United States is headed towards a physician shortage. What is the evidence?
Current information indicates that physician shortages are emerging and they will probably worsen over the next 2 decades. By 2020 or by 2025, the deficit could be as great as 200,000 physicians – 20% of the needed workforce. The growth in demand for physicians and surgeons is projected to surpass 14% between 2006 and 2016.
Another important shift has been the decline in the proportion of physicians practicing independently. In studies published by the Kaiser Family Foundation and Harvard University, the percentage of physicians who were in solo practice declined from 41% in 1983 to 26% in 1999. An important driver for the trend away from solo practice was the physicians’ pursuit of market advantage in negotiating payments from managed care plans. The research also showed another trend affecting the payment and contracting of physicians: 63% of health maintenance organizations pay primary care physicians and 42% pay specialists using fee incentives. Still, fee-for-service is by far the most common payment method and its use is increasing.
The proportion of health maintenance organizations using fee-for-service payment for physicians almost doubled between 1997 and 2000, increasing from 33% to 74% for primary care physicians and from 49% to 84% for specialists. This trend is changing dramatically the staffing dynamics in hiring and contracting of highly qualified and specialized physicians. As these physicians seek employment with large, well-established companies, they are increasingly turning to physician recruiting companies to assist them in their endeavors.
Current information indicates that physician shortages are emerging and they will probably worsen over the next 2 decades. By 2020 or by 2025, the deficit could be as great as 200,000 physicians – 20% of the needed workforce. The growth in demand for physicians and surgeons is projected to surpass 14% between 2006 and 2016.
Another important shift has been the decline in the proportion of physicians practicing independently. In studies published by the Kaiser Family Foundation and Harvard University, the percentage of physicians who were in solo practice declined from 41% in 1983 to 26% in 1999. An important driver for the trend away from solo practice was the physicians’ pursuit of market advantage in negotiating payments from managed care plans. The research also showed another trend affecting the payment and contracting of physicians: 63% of health maintenance organizations pay primary care physicians and 42% pay specialists using fee incentives. Still, fee-for-service is by far the most common payment method and its use is increasing.
The proportion of health maintenance organizations using fee-for-service payment for physicians almost doubled between 1997 and 2000, increasing from 33% to 74% for primary care physicians and from 49% to 84% for specialists. This trend is changing dramatically the staffing dynamics in hiring and contracting of highly qualified and specialized physicians. As these physicians seek employment with large, well-established companies, they are increasingly turning to physician recruiting companies to assist them in their endeavors.