Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Buy HMO'S -- There's Going to be a Primary Care Doctor Shortage

|Includes:AET, ANTM, Humana Inc. (HUM), UNH
Buy HMO'S -- There's Going to be a Primary Care Doctor Shortage
15-Oct-2009 Price when published: $37.06 Post rating: -

Problem

The benefit of giving millions of Americans health insurance, while not increasing the doctor supply is a recipe for trouble. A policy backed by Senate Majority Leader Harry Reid, Democrat-Nevada, and the teaching hospital lobbied on October 12, 2009 to ensure that there would be enough primary care physicians to meet the expected flow in demand if healthcare reform legislation passes. The legislation was dead upon arrival. The American Academy predicts that the shortage of family doctors will reach 40,000 in the next 10 years, as medical schools send about half the needed number of graduates into primary care medicine (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). The bill was created to meet the shortage problem of primary care physicians which is predicted to occur in the very near future. It also addressed bonuses that would be paid out to primary care doctors.

There needs to be a significant increase in the amount that primary care physicians paid. Increased pay would close the gap between specialists. Many new graduates are choosing specialty fields because of the larger pay. Merritt Hawkins & Associates reported that family doctors on average make about $173,000, less than half of what specialists such as cardiologists earn (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). An increase in bonuses and pay would attract more healthcare students into the primary care field. This would shift more graduates to residency positions without the fear of being able to pay off medical loans.


History

There are current proposed House and Senate healthcare reform overhaul bills which would redistribute unfilled residency positions to teaching hospitals if they promise to commit to creating more primary care residencies. A bill called The Senator Baucus Health Care Bill addresses the bonus issue. It also establishes a new ten percent bonus on select evaluation and management codes under the Medicare fee schedule for five years (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). The Senate Finance Committee bill would give the most southern and western states preference in those positions because of their high proportion of doctor shortages. Critics like Darrell Kirch, CEO of the Association of American Medical Colleges, said that the redistribution of 1,000 residency slots will only make a small dent in the shortage problem (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). So far, there has not been any legislation that would greatly increase primary care physician staff nationwide.

Status of Current Legislation

The proposal backed by Senate Majority Leader Harry Reid which would have added Medicare-funded medical residency positions was considered dead once it arrived to Congress. Its $10 billion amount seemed much too steep to for members to pass (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). Supporters believed that the price for the proposal was much too little to guarantee that patients would have doctors. A legislation ensuring that there will be enough primary care physicians to meet expected surge in demand for treatment will be important down the road. It will be crucial for lowering health care costs.

Interest Groups

Interest Groups like the Council on Graduate Medical Education played a significant role in emphasizing the importance of physician shortage legislation to Congress. They have provided an ongoing assessment of physician workforce trends, training issues and financing policies, and recommended appropriate federal and private sector efforts on this issue. They made recommendations to the Secretary of the U.S. Department of Health and Human Services and to the Senate Committee on Health, Education, Labor and Pensions, and the House of Representatives Committee on Commerce. They sent out a letter to the DHHS secretary and Congress on May 5, 2009 detailing their recommendations on the primary care shortage. They recommended a 15% increase in medical school graduates and that Physicians should be encouraged to select specific specialties with shortages (Robertson and Phillips, "COGME Letter").

Another interest group, the American Academy of Family Physicians which represents family physicians, family medicine residents and medical students nationwide assisted in providing estimates and predictions for the next 10 years. Their estimates have had significant influence in the amount requested for in medical residency positions in the proposed bill. They predicted that the shortage of family doctors will reach 40,000 in the next 10 years (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). Senate Majority Leader Harry Reid's bill would include 15,000 residency positions.

The Association of American Medical Colleges, an interest group which represents medical students also provided significant estimates and predictions for the next 15 years. Their estimates have also helped in determining the amount of positions needed in the proposed bill. They predicted that the overall shortage of doctors is expected to grow to nearly 160,000 by 2025 (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage").



Analysis

The United States Department Health and Human Services, a group that has been important in addressing issues with the shortage of primary care physicians. They have been in favor of increased bonuses and additional incentives to help increase the amount of practicing primary care physicians. One of these bills called the Senator Baucus Health Care bill addresses the bonus issue. It would establish a new ten percent bonus on select evaluation and management codes under the Medicare fee schedule for five years (Khan, "Senate Finance Committee Approves Sen. Baucus' Health Care Bill"). The department has been instrumental in influencing policy by showing public support for Senator Baucus' s Health Care bill which deals with many of bonus concerns that are in Senator Harry Reid's bill. An Official from the Health and Human Services Office of Health Reform said the 10 percent bonus to primary care doctors, additional loans and scholarships and a medical home pilot project will all help (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). All of these incentives will help to attract more medical students to go into primary care positions. It will attempt to close the gap in wages compared to specialists.

Interest groups like the American Academy of Family Physicians, The Association of American Medical Colleges, and the Council on Graduate Medical Education have been particularly successful in bringing increased media attention to the primary care physician shortage problem. But the groups haven?t had much success with getting Senate Majority Leader Harry Reid?s bill to the House and Senate. As mentioned before, the $10 billion price tag has been its main problem. Congress and the president are constrained from enacting expensive programs due to the rising of federal deficit. The groups have still been effective in providing the public with ongoing assessments of physician trends and providing recommendation through reports to federal and private groups on this issue. They have emphasized repeatedly, that addressing primary care shortage is critical to reducing future health care costs. The rising of total health care expenditures is expected to increase from an estimated $2.2 trillion in 2007 to $4.3 trillion in 2017, per capita expenditures from $7,421 to $13,103, and expenditures as a percentage of GDP from 16.2 percent to 19.5 percent (Kraft and Furlong, 248). The Council on Graduate Medical is concerned that primary physician training has been contributing to the escalating costs that threaten the economic stability of the United States. Dr. Russell Robertson, chairman of the Council on Graduate Medical Education has said that I don't see anything in the legislation that will greatly increase the primary care pipeline? (Galewitz, "Health Bills in Congress Won't Fix Doctor Shortage"). They have been very effective in building up interest by the public and other interest groups to support legislations like Senate Majority Leader Harry Reid?s bill to concentrate on the primary care concern.

If healthcare reform bills like Senator Baucus' pass then there will be an increase in the demand for primary care physician services. If there is a shortage of primary care physicians then prices for services could escalate with increased demand. Health Maintenance Organizations like Humana (HUM), Aetna (AET), Wellpoint (WLP, and United Health (UNH) should significantly profit from the lack of primary care physicians. The strongest argument for increasing medical residency positions is because it would reduce future healthcare costs. This is because primary care physicians are the gatekeeper's for all of healthcare. Gatekeeper physicians like those in Health Maintenance Organizations must authorize any specialized or referral services, using utilization review to ensure that services are appropriate and needed. There must be primary care physicians holding these positions in order to reduce costs. Thus, integrated delivery systems like the Health Maintenance Organization invest heavily in primary care services, especially prevention and intervention. Primary care gatekeepers are crucial to reducing costs.

The policy proposed by Senate Majority Leader Harry Reid failed to pass through the initial introduction and assignment to a committee because of its steep price tag of $10 billion. It was considered dead on arrival which significantly hurt its chances of being signed into law. Nevertheless, the ideas in the bill are building up steam as the issue of primary care shortage is gaining public and media attention. There will probably be more attempts by other members or interest groups to propose bills in regards to this very issue. Hopefully, there is another bill written with a similar goal in mind that could address primary care physician shortages nationwide. If this problem is not addressed, then be prepared to see costs skyrocket.


Extended Works Cited
1. Karl, Wolf, and Huma Khan. Senate Finance Committee Approves Sen. Baucus? Health Care Bill. ABC News, 2009. Tues. 13 October 2009.

2. Galewitz, Phil. Health Bills in Congress Won?t Fix Doctor Shortage. Kaiser Health News, 2009. Mon. 12 October 2009.

3. Phillips and Russell Robertson. Council on Graduate Medical Education letter. Council on Graduate Medical Education, 2009. Mon. 12 October 2009.

4. Kraft and Michael Furlong. Public Policy: Politics, Analysis, and Alternatives. Washington: CQ Press, 2003. Print.

5. Birkland, Thomas. An Introduction to the Policy Process Theories, Concepts, and Models of Public Policy Making. Armonk: M.E. Sharpe, 2005. Print
Stocks: HUM, AET, ANTM, UNH