Several years ago we seemed to be hearing a whole lot about a looming physician shortage. Year after year we would see physician productivity increase with what seemed like an ever-expanding market. New technologies created new volumes and we hadn't even gotten to the first wave of baby boomers hitting 65. There was nothing pointing to a change in these upward trends. Because of this, pundits were looking ahead and predicting significant shortages of doctors to keep up with the anticipated volume increases.
Then several key developments all converged simultaneously that knocked these trends off course - and looming physician shortages off the front pages. First, the economy tanked and in a very big way. By some economists' view, the latest recession was on par with the Great Depression of the 1930s. According to the National Bureau of Economic Research, unemployment hit 10 percent in 2009, its highest rate since 1982. Analysis by this same organization shows that consumer spending, perhaps this single largest driver of the U.S. economy, fell every year from 2007 to 2010 and in every spending category - except healthcare. News coverage has been dominated by the nation's current economic condition. As the old political adage goes, "It's the economy, Stupid"!
During this same time, employers -- also reeling from the economic downturn -- shifted significant healthcare costs from their own coffers to patient's pockets. A 2012 analysis of health insurance in the workplace by the health policy foundation The Commonwealth Fund found that from 2003 - 2011 employee health insurance costs grew 74 percent. On average, workers spent $3,962 on family premiums, up from $2,277. The analysis further noted that employer costs for a family premium averaged $15,022, a 62 percent increase from 2003. Both of these costs far outpaced normal inflation. Further straining family budgets is the explosion of new "high deductible" plans like Health Savings Accounts. All of this cost shifting is making consumers much more conscious when making healthcare decisions, putting further downward pressure on volumes.
Then in 2010 a cataclysmic event occurred: President Barak Obama signed the Affordable Care Act (ACA) into law. Although its fate wasn't sealed until the election this past November, the shift from volume to value - mandated under the ACA - was well under way. The steep cost trajectory of this nation's healthcare forced us to challenge the notion that "all volume is good volume." Appropriate use criteria (AUC), unheard of just a few years ago, is now a household term and spells out when tests should and shouldn't be ordered. As these rules have been implemented at the point of care, volumes of ancillary testing have steadily declined.
All three of these factors have pushed recent volumes downward. To illustrate, the figure below shows MedAxiom survey data on the number of cardiac catheterizations, a diagnostic staple of cardiologists, performed per cardiologist. You can see a serious decline over time.
A similar trend can be seen over the last four years (2008 being the first year MedAxiom tracked this metric) for total imaged stress studies (see figure below). These seismic changes pushed the physician shortage conversation largely to the background.
A gap in the supply chain
However, there is compelling data that as a nation we should still be worried about a looming physician workforce deficit. A 2010 study by the American College of Physicians predicts that by 2025, there will be a shortage of 130,600 physicians, split equally between primary and specialty care. The rise of the Patient Centered Medical Home as a new primary care delivery model may allay some of this delta, but the outcome is hardly a sure thing. It can be further hypothesized that such a dearth in primary care could push even more care to subspecialists, exacerbating that specialty deficit. A 2009 study by the American College of Cardiology, being refreshed in 2013, found similar access issues concluding that by 2025 there will be a shortfall of nearly 16,000 cardiologists.
Another major indicator of significant workforce issues on the horizon is the overall age of our physician population. Over 60 percent of the MedAxiom cardiology membership is over the age of 50 years. Whether these data are representative of the entire nation's cardiology workforce is debatable, but with over 6,000 cardiologists in its ranks, there's a high likelihood it is. These same data find that better than one in five are over the age of 60 years. It is predictable that with these demographics significant turnover is imminent in the not-so-distant future.
This is supported by an informal survey of MedAxiom's members that found in 2012 groups lost on average 1.65 physician FTEs. Considering that the median group size is 14.4, that's a substantial loss. It's also worth noting that this survey only measured physicians leaving medicine (such as for retirement), so the total turnover including other sources (e.g., joining another group) would certainly be even higher. Group predictions for the current year look a little better, as they anticipate losing less than one FTE from medicine.
Perhaps more striking is how aggressive groups are in current recruiting efforts. For 2013 the average respondent is seeking nearly 3.25 new FTEs. That's almost a quarter of the entire physician workforce for the average-sized group. With numbers like these it's clearly going to be a competitive environment for hiring cardiologists.
Volume has to go up
As was demonstrated above, several key factors united to knock healthcare volumes off their upward trajectory. However, compelling data suggest that this reprieve can only be temporary and that a spike in demand is probable - perhaps soon. First, the ACA mentioned earlier will bring 30-40 million newly insured individuals into the system beginning in 2014. That's 10 percent of the entire United States' population.
Physicians aren't the only ones getting older. As we age, our likelihood for needing care increases. Factoring in such trends, a 2011 study by the American Heart Association predicts 20 million new heart patients by 2020. Generously assuming that each cardiologist can maintain a patient panel of 4,000, this bump alone creates the need for 5,000 additional cardiologists. Given that it takes 13-plus years to create a cardiologist and that we're graduating approximately 700 annually, we're not going to make it - and this presumes none leave. Obviously based on the data presented previously, this latter assumption is simply not true.
All indications are that the United States will be facing a significant physician workforce shortfall in the not-to-distant-future. At present our educational system isn't capable of producing enough new physicians to replace those leaving, let alone address the projected increase in need. This will create a very competitive market for physician talent and undoubtedly bolster compensation in the years to come. It looks like a good time to be a physician. As for patients...we'll see.
Joel Sauer is vice president of consulting at MedAxiom, a subscription-based service provider and information resource for cardiology practices. Prior to joining MedAxiom, he was CEO of a large Midwestern multi-specialty physician group. Through his leadership, the group expanded from a single specialty practice of 15, to over 225 physicians with over 600 employees in nearly every medical specialty.