Doctor Shortage May Swell to 130,000 With Caps

With a shortage of doctors in the U.S. already and millions of new patients set to gain coverage under President Barack Obama’s health-care overhaul, American medical schools are struggling to close the gap.

One major reason: The residency programs to train new doctors are largely paid for by the federal government, and the number of students accepted into such programs has been capped at the same level for 15 years. Medical schools are holding back on further expansion because the number of applicants for residencies already exceeds the available positions, according to the National Resident Matching Program, a 60-year-old Washington-based nonprofit that oversees the program.

The bottleneck will likely affect efforts at health-care reform, spreading doctor shortages that now largely affect rural communities to all parts of the country in the next decade. Patients will probably have to wait to see doctors if they can find room at all, undermining the prospect of cutting health costs through more preventative care.

“The training programs know that they are not now able to train the numbers of physicians that are going be needed,” said Tom Price, a Republican congressman from Georgia. “We need to be proactive on this as opposed to reactive. We’re actually already later than we should be in addressing the issue.”

The 2010 Affordable Care Act’s insurance expansion takes effect at a time when the U.S. has 15,230 fewer primary-care doctors than it needs, according to an Aug. 28 assessment by the Department of Health and Human Services. TheAssociation of American Medical Colleges predicts the shortage, including specialists, will climb to 130,000 by 2025.

Training Costs

The cost of training one new resident, meanwhile, has grown to about $145,000 a year, said Atul Grover, chief public policy officer for the Washington-based medical colleges group.

There’s no easy solution. Boosting the number of taxpayer- financed training slots beyond 85,000 would require Congress to allocate money at a time of contentious budget debates. Adding private financing means tapping new sources of cash, such as from health insurers. Importing doctors from overseas is controversial. And training doctors is long-term work, taking as many as 10 years.

Teaching hospitals quadrupled their lobbying budget last year to $2.8 million, according to the nonprofit Center for Responsive Politics in Washington. They support bipartisan legislation introduced this month that would add 3,000 residencies a year through 2017 at a cost to taxpayers of about $9 billion. Deficit-watching Republicans, including Price, say private funding needs to be identified instead.

‘Fundamental Reform’

“The problem is the structure of the program is no longer adequate,” said Price, who is also an orthopedic surgeon, in a telephone interview. “What we need I believe is fundamental reform of the funding stream.”

The influx of as many as 30 million new patients into medical offices starting in 16 months with the health-care law is igniting the debate over training doctors. Medicare now funds more than 75 percent of doctor residencies, a level capped by Congress in 1997.

In the U.S., medical students must undergo a residency at a teaching hospital of three to seven years, depending on their specialty, according to the American Medical Association. During this time, they train under the supervision of other doctors as a prerequisite to board testing that certifies them to practice on their own.

Teaching hospitals pick up the funding for about 10,000 positions annually, Grover said in a telephone interview.

Pressured Fees

Those residencies are paid for using fees from clinical services that are increasingly under pressure, he said. Federal Medicare payments have been cut by the health-care law while hard-pressed states, facing deficits of their own, have been trimming reimbursements for Medicaid, he said.

With private insurers following suit in a tough economy, “our belief is we’re not going to have the clinical revenue needed to invest in additional slots,” Grover said.

The bottom line, he said, is that “we’re going to have to find ways to see more patients with fewer physicians” once the health-law’s insurance expansion kicks in.

Representatives Allyson Schwartz of Pennsylvania, a Democrat, and Aaron Schock of Illinois, a Republican, are co- sponsoring the legislation to increase the residency cap.

“It is an expense that is necessary,” Schwartz said in an interview. “We’ve seen an increase in the number of doctors that medical schools are training in this country. There’s not an adequate number of residencies” to handle that increase.

Radical Change

The existing shortage is based on an ideal of roughly one primary-care physician for every 2,000 people, according to the health department’s Health Resources and Services Administration, which seeks to boost access to medical services.

Estimates of future shortages calculated before passage of the Affordable Care Act “obviously couldn’t be aware of all the changes that were put in play,” Ed Salsberg, who directs the health department’s National Center for Health Workforce Analysis, said in a phone interview. “There is a real need for new estimates that take more recent developments into account.”

When Congress capped Medicare-funded residencies, policy makers thought the U.S. had an excess of slots and wouldn’t need more doctors in the future because “everyone believed the health care system was going to change radically” with the advent of managed care, Grover said. That never happened.

Medicare Payments

Medicare, the government-run health program for the elderly and disabled, spent about $9.8 billion to support residents at teaching hospitals in 2009, the most recent figure available from Grover’s organization. While spending for residents has increased 54 percent since 1998, total Medicare spending has grown faster, making support for doctor training a smaller fraction of the program.

Exacerbating matters is the budget-conscious climate in Washington. The leaders of Obama’s fiscal commission, who issued a debt-reduction plan in December 2010, said Medicare should cut support for teaching hospitals by $6 billion in 2015, “bringing these payments in line with the costs of medical education.”

The Medicare Payment Advisory Commission, which monitors the program’s spending, said in March that extra Medicare payments to the hospitals are “substantially larger” than the cost of training doctors and treating low-income patients.

Mike Rossi, director of government reimbursement for the University of Pennsylvania Health System, said that assessment is an oversimplification.

Medicare paid about $120 million in 2011 to support 855 of the school’s resident doctors, Rossi said. The health system spent about $96 million last year on residents’ direct expenses, such as salaries, benefits and malpractice insurance. Indirect costs, mainly “clinical inefficiencies,” such as performing multiple tests on patients to instruct residents, added to the tally, Rossi said.

‘Dramatically Underfunded’

Medicare is “barely covering the cost at this point of what it takes to train somebody,” said Lisa Bellini, director of the University of Pennsylvania’s Office of Graduate Medical Education, in a phone interview. Teaching hospitals that don’t have as many Medicare patients as the University of Pennsylvania are “being dramatically underfunded,” she said.

Representative Price said keeping the residency program funded through Medicare is “no longer a feasible solution.” He said legislation to address the issue hasn’t advanced yet in Congress because of larger budget concerns and the “general lack of knowledge” about the challenges the program faces.