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Chapter It SUPPLY OF PHYSICIANS FOR THE FUTURE: WHAT ARE THE NEEDS? Nancy C. Ahern, Alvin R. Tarlov, Frank A. Sloan Introduction It is estimated that the aggregate supply of physicians in the United States will increase by one-third in the 1980s and by more than one-half over the period 198o-2ooo.l The total U.S. population, by comparison, is expected to increase by only lo percent in the 1980s and 18 percent through the year 2000.2 Thus the pattern of the last 15 years will continue, with a steady rise in the supply of health professionals in proportion to population. Private sector recommendations and federal legislation affecting recent growths Much of the expansion in physician supply in the late 1960s and early 1970s can be traced to concern expressed as early as l9S9 that the future supply of physicians would not be adequate for an increasing population unless new medical schools were constructed and the numbers of students in existing schools were increased.4 However, several years elapsed before the recommendations were buttressed by f ederal legislation--the Health Professions Educational Assistance Act of 1963, whi ch provided funds for construction. Further alarms of an impending shortage of physicians were sounded in 1964 in the Coggeshall report to the Association of American Medical Colleges (AAMC ~ . The report concluded that "more physicians must be trained as quickly as possible . . . . It must be recognized, however, that it is not likely that America will ever be able to produce all the physicians that the nation would like to have."5 The concept of shortage was reiterated in 1967 in the report of the President's National Advisory Committee on Health Manpower. It was recommended that "production of physicians . . . be increased beyond presently planned levels by a substantial expansion in the capacity of existing medical schools and by continued development of new schools."6 Both the American Medical Association (~MA) and the AAMC endorsed this policy in a joint statement released in February 1968 and agreed "that all medical schools should now accept as a goal the expansion of their collective enrollments ~o a level that permits all qualified applicants to be admitted."7 Soon thereafter ~ health manpower act was passed by Congress; it provided loan and scholarship money, as well as funds for construction and operating costs of medical schools. Eligibility for funds was linked to a requirement to increase the school's class size (capitation grants). 251

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Medical school enrollments As a result of the private sector consensus and the infusion of government funds, the number of U. S. medical schools increased in number from 89 in ~ 965 to 127 in 1982 (Table 1) . Enrollments of first-year students nearly doubled over this period from about 9~000 in 1966 to more than 17,000 in 1982 (Table 1 and Chapter 7, Table 2~. Osteopathic school enrollments have grown at similar rates (Table 2 ~ . Enrollments in allopathic schools have fallen off slightly, as of the 1982/83 academic year, and are expected to remain at this reduced level or to continue a modest decline in the next few years. However, because of the time lag in training, the number of graduating medical s tudents will continue to rise through 1985, and the number of new entrants to medical practice will not peak until about 1990. TABLE 1 Enrollment of First-year Medical Students, 1965 to 1982, Allopathic Schools Academic Year Number of New First-year Increase from Beginning Fall Schools Enrolleesa Previous Year 1965 89 8,554 ~~ 1966 92 8~775 2~6% 1967 95 9~314 6~1 1968 99 9 ~ 740 4 ~ 6 1969 101 10~269 5~4 1970 103 11 ~ 169 8.8 1971 108 12~088 8~2 1972 112 13 ~ 570 12 ~ 3 1973 114 13 ~ 876 2 ~ 2 1974 114 14~579 5~1 1975 114 14~910 2~3 1976 116 15 ~ 282 2 ~ 5 1977 122 15~493 1~4 1078 125 16,054 3 e 6 1979 126 16 ~ 301 1 ~ 5 1980 126 16 ~ 590 1 ~ 8 1981 126 16~644 0~3 1982 127 16 ~ 567 ~0.5 aThe number of new enrollees will differ from the total number of first-year students as the latter includes those repeating the year. In 1982/83 for example, there were 17,254 first-year students, but only 16,567 new enrollees. SOURCE: Association of American Medical Colleges, unpublished data. 262

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TABLE 2 Enrollment of First-year Medical Students in Osteopathic Schaol~. 1965-1982 Academic Year Number of Firat-year Beginning Fall Schools Enrollmenta 1965 5 464 1966 5 480 1967 5 509 1968 5 521 1969 6 577 1970 7 623 1971 7 670 1972 7 810 1973 7 884 1974 9 905 i975 9 - 1,002 1976 10 1,068 1977 12 1,207 1978 14 1,322 1979 14 1,381 1980 14 1,478 1981 15 1,564 1982b 15 1,681 aMay include students repeating the f irat year. bEs timated. SOURCES: Reference #1, Table IV-24; and 1982-83 Yearbook of Osteopathic Physicians. Chicago: American Osteopathic Association, 1982. Inflow of Foreign Medical School Graduates The annual inflows of F14Gs have been very uneven, reflecting changes in health manpower policies, and immigration and licensing policies (Table 3~. As a group, FMGs represented nearly one-third of the additions to total physician supply between 1966 and 1976.1 In 1981/82, FrMGs accounted for 25 percent of all residents in f irat-year postgraduate training and 19 percent of all residents (Table 4 ~ . Nearly half of all E~MG residents were United States citizens who studied abroad. The recent increase in numbers of FMGs is due to the increase in U.S. FMGe (Table 4~. It is now believed that a largely new category of FMG, the unemployed European doceor,~is attempting to enter the physician work force in the United States. 263

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TABLE 3 Numbers of Initial Licenses Issued by State Boards of Medical Examiners, Selected Years 1960 to 1981 Fogs as Total New Percent of Year Physicians FMGs Total 1960 8,030 1,419 18 1963 8,283 1,451 18 1968 9,766 2,185 22 1970 11,032 3,016 27 1971 12,257 4,314 35 1972 14,476 6,661 46 1973 16,689 7,419 44 1974 16,706 6,613 40 1975 16,859 5,965 35 1976 17,724 6,436 36 1977 18,175 5,851 32 1978 19,393 4,578 24 1979 19,896 3,566 18 1980 18,172 3,310 18 1981 18,831 3~131 17 SOURCE: U.S. Medical Licensure Statistics 1980-81 and Licensure Requirements 1982. A. V. Daigle, et. Chicago: American Medical Association, 1982. TABLE 4 Foreign Medical Graduate Participation in Graduate Medical Education, 1979 to 1981 . . . First Postgraduate Year Filled Year Positions Fags ~ . . All Residency Years Filled Positions FMGs US FMGs 1979 -- 3~787 64~615 12~070 4,229 1980 18~702 4J018 62,853 12~078 4~790 1981 18,389 4,715 69,738 13,194 5,838 SOURCE: Medical education in the U. S . 1980~1981 . JAMA 246: 2911-2986, 1981; and ISetlcal education in the U.S. 1981-1982. JAMA 248:3223-3328, 1982. 264

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Projections of future supply Projected increases in physician supply are detailed in two recent studies: the 1980 report of the Graduate Medical Education National Advisory Committee (GMENAC),9 and the 1982 report to Congress by the Bureau of Health Professions (BHPr) of the Department of Health and Human Services.1 The GMENAC report estimated that the supply of physicians would reach 536,000 by the year 1990, and 643,000 by the year 2000 (Table 5~. The total supply figures were projected using a mathematical model that started with the present supply and (~) adjusted for attrition through death, disability, and retirement; and (2) adjusted for additions of United States medical school graduates, foreign medical graduates, and residents in training. The GMENAC pro jections assumes that numbers of U. S . medical students entering allopathic schools would increase 2.5 percent per year between 1978/79 and 1981/82 and then remain constant at 18,151; that numbers entering osteopathic schools would increase 4.6 percent per year through 1987 and then remain constant at 1,868; and that numbers of FMGs entering residencies in the United States would increase to 4~100 by 1983/84 and then remain constant. Residents in training were included in the supply figures as 0.35 full-time practice equivalent. We now know that enrollments through the remainder of the 1980s will probably be lower than GMENAC expected (e.g., in 1982/83, first-year enrollments were 17,254 rather -than the 1S,151 projected). However, the current numbers of entering P~Gs are somewhat higher than expected--4, 500 versus 4 ,100. Thus, in balance, the GMENAC estimates of total future physician supply are not too different from what they would be if the calculations were repeated today. The Bureau of Health Professions more recent report estimates that the total supply of M.D. arid D.O. (Doctor of Ostepathy) practitioners will climb to 591,200 by the year 1990, representing a 32 percent increase over 1980 (Table 6). The BlIPr pro Sections are higher than those of G~NAC, since they count residents as full-time equivalents of practicing physicians, while GMENAC included residents at the rate of 0.35 their number. Whatever the pro Section methodology, it is clear that the pool of physicians in the Uni ted States has grown sharply and will continue to grow into the 1990~. We know reasonably well how many doctors the nation will have in 1990. What their geographic and specialty distribution will be and how many will be required to meet the health needs of the population, and consequently how many should be trained, is much less certain, as discussed below. 265

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TABLE 5 Physician Supply Pro jected by GMEN~C, and U. S O Population, 1978 1990 and 2000 , Increase 1978 1990 2000 1978-1990 Physician supplya 374,800 535,750 642,950 43X U. S. population in thousands Physicians per ]~i~2 Population 218, 717b 249,731C 267,990C 14: 171 215 240 26% NOTE: The major cause of difference between physician supply and projections in Tables 5 and 6 relates to the method by which the 70,000 residents in training are counted. The BHPr counted each resident as one physician, while GMENAC counted each resident as one-third of a full-time equivalent practicing physician. aPhysician supply includes all professionally active physicians (M.D. 's and D.O. 's) together with 0.35 of all residents and fellows in training in the year indicated. The 1990 and 2000 figures pro jected by G~3NAC assumed that U.S. allopathic medical school first-year enrollment would increase 2.5 percent per year between 1978/79 and 1982/83 and then remain level at 1B,151; that osteopathic school enrollment would increase 4.6 percent per year between 1978/79 and 1987/88 and then remain level at 1,868; and that FMGs would be added to the residency pool at the rate of 3,100 per year in 1979/ increasing to 4,100 per year by 1983, ant then remain level.9 bU. S. Bureau of Census, Current Population Reports, Estimates of IJ. S. Population to May 1, 1980. Series P-25, No . 888, July 1980. CU. S. Bureau of Census, 9~, Pro jections of the Population of the U. S.: 1982 to 2050 (advance report ). Series P-25, No . 922, October 1982. 266

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TABLE 6 Physician Supply Pro jected by Bureau of Health Professions, and U. S. Population, 1980, 1990, and 2000 Increase 1980 1990 2000 1980-1990 Physician supplya 449, 500 591, 200 704, 700 U.S. population 227~658 249~731 267~990 10Z in thousandsb Physicians per 197 237 263 20% 100,000 population NOTE: The major cause of difference between physician supply and projections in Tables 5 and 6 relates to the method by which the 70,000 residents in training are counted. The B8Pr counted each resident as one physician, while GMENAC counted each resident as one-third of a full-time equivalent practicing physician. aPhysician supply includes all active physicians, M.D.'s and D.O.'s, as well as all residents in training in the year indicated. The projections assume that firat-year enrollments in allopathic and osteopathic schools will decline S percent over a 5-year period beginning in 1983, and will then level off at 16,800 M.D. and 1,600 D.O. first-year entrants in 1987, remaining at these levels through the end of the pro Section period . Assumptions regarding additions of foreign medical graduates were as. follows: (1) alien FMGs entering under family preference visas are expected to average 900-1,100 annually; (2) alien FMGs entering under other than family preference are expected to average 1,600 annually; (3) U.S.-citlzen PrMGs are expected to average 1, 500 annually during the first half of the 1980s and then level of f during the latter l980s to about one-third that numbe r . 1 bU. S. Bureau of Census, Current Population Reports, Pro ject ions of the Population of the U. S.: 1982 to 2050 (advance report ). Series P-2 5, No . 922, October 1982. l Supply of Nonphysician Providers The increase in numbers of practicing physicians has been accompanied by a parallel rise in the supply of nonphysician health care providers. Between 1965 and 1980, the pool of registered nurses (RNs) increased by more than 100 percent (Table 7~. This same period witnessed the emergence of two new categories of health professionals-- nurse practitioners (NPs) and physician assistants (PAs). 267

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The first PA program was started in 1966 at Duke University. The role envisioned for the PA was aiding in many of the primary care responsibilities that burdened the already overworked physician and substituting f or physicians in shortage areas .10 The f irst NP training program was introduced at the University of Colorado at about the same time to give pediatric nurses expanded clinical training for primary health care of children. Subsequent programs across the country prepared family nurse practitioners to meet the primary health needs of all age groups, geriatric nurse practitioners to care for the elderly, and certified nurse midwives to care for low-risk pregnant women. 11 As of 1980, there were more than 1,272,000 active RNs in the U.S., approximately 17, 000 NPs and nurse midwives, and an estimated 8, 800 active PAs (Table 7 ~ . In many cases the services of nonphysician providers overlap those of physicians. Their work is not only auxiliary to that provided by the physician, but sometimes i t substitutes for care otherwise provided by physicians . Increasingly, nonphysician providers and physicians are competing against each other for patient care services. For this reason, any comprehensive consideration of physician manpower must be integrated with manpower assessments of all other health professionals. Difficulty of Estimating Requirements for Health Professionals Although manpower forecasting methods have become more sophisticated, improvements have been offset by a greater complexity of the manpower situation and a rapidly changing health care system. Long-term pro Sections are dependent on social, economic, and political assumptions based on "most-likely" scenarios in a rapidly changing health care system. Although total manpower supply figurer can be projected with reasonable accuracy, predicting requirements for health services is much more problematic. Ultimately, it is the future relationship between supply and requirement that will determine whether there will be an overall shortage or surplus of health professionals. There have been noteworthy efforts to project national requirements for physician services. The most ambitious to date is the GMENAC requirements model.l2,13 The projections attempt to estimate the number of physicians needed to provide all medically necessary and appropriate services for the U.S. population in 1990 and 2000. The estimates were derived using an "adjusted-needs" model. Panels of experts examined current patterns of utilization, the incidence/ prevalence of disease, and norms of care. Using 1978 baseline data, estimates were then made of the changes in utilization for 1990 that would result from changes in the population and incidence/prevalence rates. Estimates of medically necessary and 269

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appropriate services for 1990, including well care, reflect professional medical judgment modified by an assessment of what realistically can be accomplished by that year. After obtaining estimates of appropriate utilization, requirements for physicians were estimated by assessing how much of total service requirements can be delegated to nonphysician providers, and by considering the productivity of full-time practicing physicians. GMENAC projected a need for a total of 466,000 physicians by the year 1990; the estimated supply was 536,000 indicating an overall surplus of 70,000 physicians. GMENAC projected a surplus of 145,000 physicians by 2000. The BHPr's 1982 projections indicate much higher physician requirements for 1990--570,200--22 percent higher than the GMENAC estimate. This is largely because the BEPr's projection was based on demand rather than on need--two distinct concepts. Future need for health professionals is estimated by the incidence/prevalence of various illnesses requiring medical treatment; future need considers what ought to be consumed for the population to stay healthy. Demand involves the use of medical services largely as an economic decision. The BHPr requirements model assumes that there will be a continuing increase in per capita utilization of medical services, apart from any demographic changes and price changes.1 The rationale was that long and sustained growth patterns and trends in any dynamic phenomena rarely stop abruptly, and that it would be unrealistic to assume that no further growth in per capita consumption of health care will occur (even though decreases may occur for short periods of time). Some analysts concur with the view that the demand for physicians and their services will continue to increase over the next decade, partially absorbing the increases in supply. Sloan and Schwartz predict that during the 1980s, real payments to physicians will increase by some $14 billion to $20 billion (1979 dollars), representing increases not only in population but also in payments per capita population.l4 About one-fifth of the increase will be attributable to growth in the supply of physicians. With the current system of third-party reimbursement, it is possible that levels of demand will exceed "need." Alternatively, with pressures to reduce federal and state-financed programs, utilization of health services for some groups may be lower than that considered necessary and appropriate. To date, many cost containment mechanisms have been proposed, but relatively few effective ones have actually been implemented. Effective cost containment would cause per capita consumption of medical services to fall. There is some evidence that the current economic recession has reduced utilization of medical care in some areas, but these developments may be transitory. In Detroit, for example, declining 270

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health insurance coverage among those who are unemployed has resulted in a substantial decline in ambulatory visits. Area doctors reported recently that patient visits declined as much as 30 percent during the course of a year's time.l5 Nationally, the average number of patient visits per week for physicians dropped only 1 percent between 1981 and 1982 from 132.6 to 130.9,* despite the recession and increased numbers of practicing physicians.16 Changes in physician reimbursement policies have the potential to radically alter present patterns of utilization. Reimbursement mechanisms can influence the mix of services provided by practicing physicians in various specialties, hospitals' demand for residents, and specialty and practice location of young physicians.17 However, changes in reimbursement are difficult to predict, and any large-scale change in the current system will certainly encounter political opposition. Nonphysician health care providers According to data from the AMA Socioeconomic Monitoring System, NPs and PAs working in physician's offices increase physician productivity about 20 percent. In 1981, there were 3.9 vs. 3.2 patient visits per week respectively for physicians who did vs. did not employ NPs and PAs.18 Further uncertainty is related to the share of health care services that would be assumed by the growing number of health care providers in competition with physicians, e.g., nurse midwives competing with obstetricians, NPs with primary care physicians, psychologists with psychiatrists, optometrists with ophthalmologists, and so forth. Traditionally, physicians have been able to maintain their professional and economic position in competition with other groups . Women Physicians In 1981, 12 percent of American physicians were women, 19 and women were 31 percent of the entering classes in U.S. medical schools.20 It is expected that they will be 16 and 20 percent of the total pool of physicians by 1990 and 2000, respectively.] *Caution in interpretation is necessary, since these numbers derive from a new methodology (telephone survey) which still is being refined. The data are internally consistent from quarter to quarter, but are not comparable to mail survey data used previously, which show a ten-year decline in patient visits per week (see Table 9~. 271

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the broadest services at the lowest price. Some physician groups have entered the competition by establishing a variety of organizational structures and numerous cost-saving arrangements. These include HMOs, IPAs (independent practice associations) and PPOs (preferred provider organizations--which offer services at a cut rate to selected employee groups). The underwriter-provider plans compete with each other by of fering dif ferent arrays of coverage, deductibles, co-insurance, limit s, premiums, physician groups, and hospitals . If physicians are willing to staff these plans on a large scale, one might envision the incorporation of the health services system. Employers, facing increased pressures to reduce costs, will negotiate with employees for the lowest acceptable health payment package. Employers and government agencies on behalf of employees, retirees, the poor, and others will in turn negotiate with underwriting companies, physicians groups, and hospitals for specified services on the basis of a prearranged annual fee. In each case, rules would govern the operation, many of them designed to reduce utilization and costs. Physicians and physician groups that commit themselves to restraint in the utilization of health services would be in demand by underwriters and employers. Algorithms, agreed upon in advance, would determine the specifics of medical care. All of these cost-saving measures, if effective, would tend to reduce requirements for personnel. Although an incorporated health services system is intended to manage the business aspects of health care, the result could have a profound effect on the individual interaction between one doctor and one patient, and on the characteristics of the patient's personal health services. Individual patient and individual physician discretion would be reduced under these circumstances. But the realization of this incorporated structure cannot occur without the willingness of physicians to staff these plans in large numbers. The new physicians who are hired will have to abandon professional freedom in the economic sense and accept the restrictions of incorporated employment. Some Results of an Increasing Supply of Physicians As discussed above, the number of actively practicing physicians will be increasing sharply in the 1980s. The increasing supply of physicians is already being felt by young residents in training as they search for a place to practice. They are finding many areas already saturated with physicians, the competition for patients very high, and many hospitals unwilling to accept additional doctors on the medical staff. One result is the increasing favor with which new physicians look upon salaried positions, or assured practices, within an incorporated structure as provided in HMOs; large multispecialty group practices; in hospital ambulatory, emergency, critical care, and subspecialty procedure facilities; with manufacturing concerns; in the military 275

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system and Veterans Administration; and in other public institutions .30 The influx of newly trained physicians into has been so brisk in the past years, and will be sustained at such high rates through the 1980s, that of all the physicians in practice in 1990, about 40 percent will have entered practice since 1978 e practice such The effects of the rislog number of physicians and of their changing attitudes toward employment are evident. Almost 50 percent of all physicians now derive some of their income from salary. The Physician Practice Study documented that institutional practice was the main practice for 15 percent of newly trained family physicians, 42 percent of primary-care-track general internists, 23 percent of general internists, and 31 percent of subspecialty internists.30 A likely scenario follows. The rapid rise in the number of physicians will provide the f inal impetus to complete the incorporation of health services. The negotiations for health services will be conducted in a buying-selling-servicing mode as in most markets. Like service contracts for automobiles, office machines, and home appliances, the allowable services will be agreed upon in detail in advance. An elaborate set of rules governing physician decisions will be adopted by each physician corporation. These rules will specify the allowable use of certain diagnostic tests f or a given set of symptoms; number of visits per year for a given condition; components of the annual physical exam; alternatives to elective surgery; criteria for hospitalization; duration of hospitalization; allowable drugs ; limits to therapy of the seriously or terminally ill; the use of preventative, rehabilitative, mental health, and nursing home services; and most other decisions previously delegated by society to an individual physician's judgment in an individual doctor-patient relationship. The ma jor underlying emphasis of the rule making will be on cost reduction. There will be decisions on which health professionals will provide primary care. In adult medical care, for example, roles will be decided upon for family physicians, general internists, subspecialty internists, obstetrician-gynecologists, and nurse practitioners, for psychiatrists, psychologists' and psychiatric social workers. These sets of rules will in the future make possible a more precise specification of the relative number of generalists, specialists and subspeclalists needed. Many of the changer in the health care system described above have implications for manpower requirements. The growth of ~Os and other prepaid plans, the trend of physicians deco select more salaried positions, and the rule making aimed at cost reduction, for example, are expected to lower requirements. These changes will tend to diminish the open-endedness of the market for medical services. Institutions will establish the number of physicians that can be efficiently employed. While the total effect of a transformed health care system on supply and requirements cannot be predicted with certainty, it would be advantageous to both the institutions that train physicians and the residents in training to have available timely information on changing requirements and employment patterns. 276 ~ . ~

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Need for Development of a National Bealth-Manpower Policy Our implicit national health policy has as its objective the provision of high-quality health services for all Americans at a reasonable cost to the individual and to society. There is disagreement, however, about the preferred mechanism for adjusting the supply of health professional workers. There are several desirable features of health-manpower planning: it enables one to plan for the number of slots in medical, osteopathic, nursing, and other health professions Schools and research training programs; to plan a program of training that most closely matches specialty needs; and to make decisions on immigration and licensing. Conversely, there are drawbacks to national planning. First, there is a lengthy pipeline in training, especially for the physician. Changes in numbers of students at the entry level will not be reflected in the new M.D.s entering practice until seven or more years later. Policymakers must therefore have approximately a 10-year vision of health manpower needs. Second, the vision or forecasts of future need or demand may turn out to be wrong. Past forecasting attempts have had mixed results, as indicated in Table 8. Two sets of projections prepared independently in the same year have dif fered by as much as 15 percent . The 1967 projections of requirements for 1975 provides an example. While TABLF 8 Comparison of Pro Jections of Physlelan Supply and Requirements f or 195~' and 1975 Estimated Estimated Actual Study Requirements Supply Supply Projections for 1960 Ewing Report (1948) Mount i n-Penne 1 -Be rge r ( 194 9 ) Presldent's Commission on Health Needs of the Natloc (1953) Pro jectlons for 1975 Bane Committee (1959) Fein (1967 ) Na t tonal Advisory Commlesion on Bealth Manpower (1967) 1' ~ Pohl in Health Ser~lce (196? ) 254,000 212,000 248,66' 233, 532-261, 172 216, 119 248, 664 216 ,000-281, 000 222,000 248, 664 330,000 (minimum) 312,800-318,400 367,000 340 000-38S,000 361,700 367,000 346 000 (alnieum) 360,000 36?, 000 ~ 400, 000 - 425, 000 360, 000 367, 000 SOURCE: American Medical "sociatlon. 277

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agreeing on estimates of supply, the National Advisory Commission on Health Manpower estimated that supply would exceed requirements and the U.S. Public Health Service projected that supply would be substantially lower than requirements. Even from the vantage point of 1983, we can not examine requirements for 1975 retrospectively, in order to assess the adequacy of the pro Jection methodologies, because there is no agreed no agreed on standard for determining requirements. Another possible drawback of national planning is the tendency to develop policy that overlooks the need for modulation of policy--to accommodate particular needs derived from distribution problems, for example. Some would argue that market forces rather than explicit national policy should be relied on to make adjustments in enrollments, supply, and distribution. The marketplace model would restructure the health care system along lines that would make it price-competitive; that is, consumers of heath care would base their decisions in large part on price, a phenomenon that is rare today given the prevalence of a third-party reimbursement system that obscures cost considerations.31 There are indications that market factors might be working for physicians. By using market definitions, a decline in real income indicates that supply has risen faster than demand. Net earnings for physicians have barely kept pace with inflation, and both practice hours and patient visits per week have declined (Table 9~.* The decline in average office visits has occurred in both metropolitan and nonmetropolitan areas.32 Board certified Dhv~ician`: have tended to move to smaller previously unserved communities.33~34 Marketplace proponents argue that with an increased supply of medical manpower, physicians will make adjustments in location, specialty, and setting. TABLE 9 Trends in Hours of Work, Patient Visits, and Visits per _ _ MD practice hours Year per week Patient visits Visits per week per hour 1970 1971 1973 1974 1975 1976 1978 1979 1980 51.4 53.6 50.8 49.9 51.8 52.2 50.3 49.7 49.6 132.5 135.8 137.7 125.8 126.5 128.5 130.6 122.7 112.0 2.58 2.53 2.71 2.52 2.44 2.46 2.60 2.47 2.26 SOURCE: Table IV-14, Reference $1. interpretation is complicated by the increased numbers of female physicians, who--on average--practice fewer hours and earn less money per hour than male physicians. This may reflect the market, it may be by choice, or be due to some other factor. 278

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We conclude that a health~manpower policy* is critically important for long-range funding of medical, nursing, and other health professional schools and teaching hospitals; for providing reliable information to high school and college students concerning opportunities in the health professions; and for providing useful information for long-range planning of the health services industry. The aim is to effect and inform both individual and institutional decisions at a time of rapid change. Recommendation for a Study Establishment of a National Health Manpower policy requires a sustained illumination of the issues through data collection and analysis, integration across all health professions , ef fective participation by both the private sector and governments, and the development of consensus. Market signals alone cannot be relied on to ad just health~anpower resources satisfactorily. On the other hand, stop-and-go policies of expansion/contraction are thoroughly undesirable. Therefore, we recommend that there be a continuing effort to collect and analyze data, prepare biennial profiles of the supply and requirements for health services, issue five and ten year forecasts, and develop long-tenm health manpower policies and recommendations. This effort would involve a careful consideration of the rapidly changing health care system and the consequences of those changes for health manpower. It would be necessary to integrate manpower needs across all the professions, including allopathic and osteopathic physicians, nurses and nurse practitioners, optometrists, podiatrists, psychologists, and others. Ultimately, the long-tenm requirements for each profession's services would have to be translated into the number of available training positions (residencies in each specialty, for example). Connections should be made between specialty-specific requirements, supply, training positions, entering class size, and immigration laws. Especially challenging will be the development of an acceptable policy for funding medical and graduate medical education in the approaching era in which the economics of the health services system will undergo radical transformation. In addition, it would be desirable to bring the data into consideration with a number of broad socioeconomic-political issues, such as: How can the reimbursement system or other mechanism be used to bring demand for services in line with need? Along the spectrum of utilization rates (from low to high), where is the maximum benefit in terms of patient health and function? What is the outcome of health services as measured in socially relevant terms, i.e., the functioning of the patients and their productivity? What are the special needs of certain populations--blacks and Hispanics, the urban and rural poor, and the elderly? What are the appropriate roles for government? *Considering, in a coordinated way, loan and scholarship programs; reimbursement policy; grants to schools for research, educational, and other programs; FMG visas, and licensure, for example. 279

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It should be emphasized that while a national policy is desirable, there is no one body controlling it, given that ours is a decentralized system. State-controlled institutions comprise 60 percent of the nation's medical schools. -State legislatures, facing increased budgetary pressures, will want guidance on future levels of medical and other health professional school enrollments. States will need to determine their health-manpower needs, the distribution of existing providers by location and specialty, the inflow and outflow of health professionals, and the return rates on funds for health professions training.35 As they do, they will be greatly assisted by having available national data f or purposes of compari son. Specialty societies will also want to compare their assessments with national statistics. The American Board of Medical Specialties (ABMs) recently released the following statement: "The ABMS believes that a continuing study of physician manpower should be conducted. Directed toward fact-finding and dissemination of information, this study should be primarily the responsibility of the private sector with the collaboration and assistance of the federal government."23 The development and successful implementation of a national health manpower policy would require that a broad constituency be involved from the outset. This should include medical schools and other health professions schools, professional organizations, underwriting organizations, as well as state and federal governments. A national health-manpower policy can only be implemented successfully through broad consensus developed by all sectors that have a role to play. Proposed Study The structure we are recommending will be referred to as the National Health Manpower Study and Policy Development Committee (or the Study). The intent is to develop a continuing, comprehensive, long-term health~manpower program, although in this document only a three-year proposal is being presented. A major report on this first phase of the study would be issued three years after inception of the Study, which could use 1982 baseline data. The Study would employ state-of-the-art manpower methodologies; newer modifications should be introduced to advance the field. Supply and requirements figures would be calculated for five-year intervals 1987, 1992, and 1997. Every effort would be made to assess the data for regional, state, and local areas, not only at the national (aggregate) level. Development of scenarios that integrate manpower supply with demand and need would be particularly instructive. One function of the Study would be to construct the scenarios, and to identify data needs and methods to collect that data. It is recommended that the Study have two structural subcomponents: the staff, whose function would be to collect and analyze data; and the committee, whose function would be to interpret the information, weigh alternatives, formulate policy recommendations, and move toward national consensus. 280

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The Comit tee would be composed of 20 to 30 individuals, drawn from a broad constituency~~.edical schools, nursing schools, schools of public health, and other health professions schools; professional organizations; unterwritlog organizations; health economists; political scieneiste; public administratore; state and federal governments; consumers; and others. The chair would be expected to spend about one-fourth-time on the endeavor. The staff would be capable of primary data collection, either in-house or by subcontract, and sophisticated analyses. The staff also would take advantage of data collection activities of government and private agencies (BHPr, AAblC, AANC, AMA, etc. ). The staff director would be a senior, experienced, and professionally respected individual. A stat f of approximately 10 full-time equivalents is envisioned, including an administrative director, senior analysts, statisticians, economists, data-management personnel, and secretaries. The committee might meet quarterly for two days at a time. Subcommittees or task forces could be organized for specific assignments, each with a staff person. A preliminary report should be prepared by the end of the first 18 months and be widely circulated for comment and criticism. A series of regional conferences should be held at various locations, actively involving in the process state and federal representatives an well as all other interested parties. The ob jective would be to reach broadly toward all concerned and to develop a broad consensus. A major report should be issued at the end of the three-year period. Home f or the Study There are several possible homes for such a project. Wlthln the federal government, the Bureau of Health Professtons of the Department of Health and Human Services has a mandate to report to the President and Congress on the status of health professions personnel in the United States. The Barr has a great deal of experience collecting ant analyzing such data. In developing manpower policy, however, the federal government would be necessarily tied to political concerns. Both the American Medical Associatlon and the Association of American Medical Colleges have been actively involved in manpower data collection, assessments, and policies. Neither group is, however, explicitly concerned with health professionals other than M.D.s. The AMA ant the ALEC are also Grieved as looking predominantly at the needs of the profession, although the needs of the public are also high on their agendas. In . Determining requirements f or health professionals in particular, it is important that the work be carried out on a neutral level, drawing together the views of all sectors. The Institute of Medicine, which can bring together many disparate interests, is in a good position to provide leadership. Its elected membership spans a broad range of the health professions and includes health policy analysts from the fields of law, economics, and public 281

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a/ministration. The. Institute of Medicine Committee on National Needs f or Biomedical and Behavioral Research Personnel could provide extensive data and analyses for research manpower policy formulation. We believe that the Institute can provide the needed connection between manpower planning and health professions education. 282

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REPERENC6S i. U.S. Deparemeneof Hedt,ehandHuman Services, HealthResources Ad~l~seration, Bureau of Health Professions. Third Report to the Prest~ent and Colons ~ = = ~ C _) 82-2 . Washington, D.C.-: U.S. Goverment Printing Office, 1982. 2. U. S. Bureau of the Census. Current Population Reports, Pro Sections of the Population of the U.S.: 1982 to 2050 (advance report). Series P-25, No . 922. Issued October 1982. 3. The material in this section was adapted in large part from Tarlov, A. R. Consequences of the rising number of physicians and the growth of subspecialization in internal medicine. In Bowers, J.Z. and King, E.A., ede. Academic Medicine: Present and Future. North Tarreytown, New York: Rockefeller Archives Center, 1983. 4. Bane, F. Physicians for a Growing America. Report of the Surgeon General's Consultant Group on Medical Education, Publication No . R709, CHEW 1959. 5. Coggeshall, L.T. Planning for Medical Progress through Education. Report to the Associatlon of American Medical Colleges. Evanston, Ill.: AAMC, 1965. 6. Miller, J. I. Report to the President of the U. S. by the National Advisory Commission on Health Manpower. Washington, D.C.: U.S. Government Printing Of f ice, 1967 . 7. Joint Statements of the A~erican-Medical Association and the . Association of American Medical Colleges, March 5, 1968 ant April 16, 1968. Appendix A tn Carnegie Concision on Higher Education. Higher Education and the Nation's Health. Policies for Medical ant Dental Education. New York: McGraw Hill, 1970. B. Parlor, A.R. Conclusions and Reco~mendatlons, pp. 173-177 in Jaspers, F.C.A., Tariov, A.R., and trridland, E.L., eds. Health Hanpower Planning: Proceedings of the European Symposium on Health Manpower Planning. Boston: Hartinus Ni~hoff publlahers, 1983. 9. U.S. Department of Health and Human Services. Summary Report of the Graduate Medical Education National Advisory Committee, Vol. |_ Washington, D.C.: U.S. Government Printing Office, 1981. 10. Perry, H. B . ant Redmond, E. L. The Deployment ant Career Trends of Physician Assistants. Prepared for the National Center for Health Se Dulcet Re search, under grant HSO 3014, December 1980. 283

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11. Andreoli, K. G. The Future Role of Non-Physician Health Professionals. In Anlyan, W. and Yaggy, D., eds. Proceedings of the 8th Private Sector Conference at Duke University Medical 12. IJ. S. Department of Health and Human Services. Report of the Graduate Medical Education National Advisory Committee, Vol. II, Modeling, Research, and Data Technical Panel. DHES Publication No. (HRA) 81-652. Washington, D.C.: U.S. Government Printing Of f ice, 1980. 13. McNutt, D.R. GMENAC: Its manpower forecasting framework. American Journal of Public Health 71 :1116-1124, 1981. 14. Sloan, F.A. and Schwartz, W.B. More doctors: What will they cost? Journal of the American Medical Association 249:766-769, 1983. 15. Bennett, A. Many auto workers forego health coverage after being laid off. Wall Street Journal, CXIX, No. 60. 16. American Medical Association, Socioeconomic Monitoring System. Unpublished data, December 1981 and December 1982. 17. Sloan, F. A. Patient care reimbursement: Implications for medical education and physician distribution. In Hadley, J., et. Medical Education Financing. New York: Prodist, 1980. 18. AMA Center for Health Policy Research. Physician utilization of allied health professionals. Soc~co~ Report, 1101. 1, No . 10, Decemb 19. AMA Survey and Data Resources. Physician characteristics ant distributior~--l981. Excerpts from the AMA Physician Masterfile. January 1983. 20. Medical education in the U. S. 1961-1982. Journal of the American Medical Association248: 3223-332B, 1982. 21. Bobula, J. Income differences between male and female physicians. In Profile of Medical Practice 1980. Chicago: American Medical Association, 1980. 22. Committee on a Study of National Needs for Biomedical and - Behavioral Research Personnel, Commission on Human Resources, National Research Council . Personnel Needs and Training f or Biomedical and Behavioral Research. Washington, 9.C.: National Academy Press, 1981. 23. Fredrickson, D. Biomedical research in the 1980~. New Enaland Journal of Medicine 304: 509-517, 1981. 24. Institute of Medicine. Clinical Investigations in the 1980~: Needs and Oppo rtuni t ie ~ I. Washington, D . C .: National Academy Press, 1981. 284

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Sherman, C. R., Jolly, B. P., Morgan, T. E., et al. NIlI Program Evaluation Repore. On the Status of Helical School Faculty and Clinical Research Manpower 196B-l990. Washington, D.C.: U.S. Department of Health and Human Services, 1981. 26. Personal communication. Dr. James Wyngaarden, Director, National Institutes of Health. Lloyd, S. M. et al. Survey of graduates of a traditionally black college of medicine . Journal of Medical Education 53: 640-650, 1978. 28. Data Watch. Health Af fairs Surer 1982, pp. 129-232. 29. Statistical Profile of the Investor-owned Hospital Industry. Washington, ~ .C.: Federation of American Hospitals, 1981. A. R. Physician Practice Study. 30. Schleiter, M.~. and Tariov, Final Report to the Robert Wood Johnson Foundation (Grant 5970), August IS, 1982, pp . 38-42. 31. Bowman, M.A., and Walsh, W. B., Jr. report. Health Affairs, Fall 1982. - Pe rs pec t ive ~ on the GMENAC 32. Kehrer, B.H., Sloan, F.A., and Wooldridge, J. Changes in Primary Medical Care Delivery, 1975-1979: Findings from the Physician Capacity Utilization Surveys. Unpublished paper, February 1983. 33. Schwartz, W.B., et al. The changing geographic distribution of board-certified physicians. New England Journal of Medicine 303: 1032-103S, 1980. 34. Newhouse, J.P., Williams, A.P., Bennett, B.W. ~ and Schwartz, W.B. Where have all the doctors gone? Journal of the American Medical Association 247:2392-2396, 1982. 35. Lewin, L. S. and Derzon, R.A. Health professions education: State responsibilities under the new federalism. Health Affairs 1( 2~: 69-85, 1982. 285