This is a great article, except for the part that says “physicians can charge more”. We can’t. Our pay is tied to MPFS, which decreases every year, or is artificially determined by hospital administrator’s decisions of “fair market value”.
Maybe you meant to say hospitals/ health systems can charge more for care.
100% agree. I am in private practice and my salary has not budged. Every year the CPT code reimbursement goes down and down. You have to do more and more just to stay in place. Like Alice in Wonderland.
As a a physician myself it seems a bit self serving to see doctors bemoaning their meager earnings. Currently the median physician salary by this source is 374K and even the lower paying specialties Pediatrics and Family Practice average 250-300K. ( https://medschoolinsiders.com/pre-med/how-much-do-doctors-make/ )
You and I know that coding is whack- a mole and whatever reimbursement gimmicks the insurers try, MDs will game it. You counter decreased code reimbursement by upcoding and I remember when I started in the 90s the average code was a level 2 and 3 and now you have some coding specialist gaming it to get level 4s for every cold visit by asking a bunch of unnecessary questions on some template
Whether MD earnings are keeping up with inflation is hard to say. I looked at half a dozen articles and it depends on the time frames and Covid and post Covid inflation throws a monkey wrench in calculations, but regardless, myself as a lowly FP am not going to cry about making 250K a year which puts me in the top 3% and specialists who make more like 350 are in the top 1%.
The need for primary care docs is so acute! My daughter is a 3rd year Family Medicine resident and their workloads are so high that most grads from her program choose to work an 80 percent schedule because full-time is unsustainable. In addition to the sheer lack of bodies to do the work, dealing with patient questions & requests via patient portals and the ever worsening prior authorization process has greatly increased work that happens outside the exam room.
Also, it doesn’t make much sense to say the problem is total residency positions when 800 of 5000 FM positions and 350 of 11,000 IM positions are unfilled. The largest bottleneck is very clearly US medical school positions, which are in very high demand and are not going unfilled. Sure, many subspecialty residency positions are bottlenecks as well, but if we are discussing an overall physician shortage this is mostly in primary care.
I made that same point above. We need more Medical School Positions. The reason that residencies that dont fill in primary care is that programs know if they become predominantly foreign grads they lose prestige and and become less competitive. No American grad has trouble finding a spot but there aren't enough of them. In a country as wealthy as we are why cant we train enough doctors and instead have to steal them from poorer countries, where they are needed more, or have Caribbean schools educate us.
I have heard about this issue many times from many places and the one thing I never understand: Why is this a _bottleneck_. Is there some law or regulation that prevents someone _other_ than the federal government from funding a residency? I have trouble believing that a residency is so expensive that it could not comfortably be paid for from the lifetime value of a doctor (and if it really _is_ that expensive...why? That seems like the problem to be addressed), in which case there should be several different mechanisms for paying for this.
Yes, the federal government has not kept up with it's funding of these residency slots, but what is preventing some other mechanism from taking up the slack?
My quick math from a CRS report (IF13088) is that, in 2023, DGME and IME paid about $180K per FTE intern or resident covered by the program.
That's a big hole for any individual other insurer or actor to fill — it's also a lot more tuition debt for already debt-laden prospective residents to foot (if that's going to be the source of funding).
It's true that in 2023 private spending on hospital care made up 48% of the total,* and Medicare and Medicaid together made up less than that (45%), but a non-federal source funding DGME and IME spending would be a collective action problem for the ages. And ultimately, the costs would be incurred by premium payers (whose high premiums are presumably cause for a government shutdown) instead of tax payers, which is a fairly regressive choice — more regressive than Medicare's tax as currently constructed, I think.
*according to my calculations of the National Health Expenditures by type of service and source of funds, CY 1960-2023 (ZIP) for 2023, counting private as OOP + private health insurance + workers comp + other private fees
The real problem is scope of practice. We don’t need doctors for lots and lots of things. 1) 90% of the time they have no idea what they are prescribing - they haven’t read an evidence report, they just prescribe based on little info, pharma marketing, speed and habit. Doctors created the entire opioid epidemic. 2) a great many things can be diagnosed by a an x ray or radiology tech - with at least as much accuracy as a doctor if they are experienced (and now by AI) 3) many many many things are best treated with PT - not surgery or drugs. PT is better, cheaper all the way. 4) as bad as “Dr Google” can be, the fact is that medical information of high quality isn’t hard to find - and most doctors don’t use evidence based medicine anyway. The entire profession is overrated and massively overpaid based on a legacy value that is little more than nostalgia at this point. The cost of health care is driven by the need to pay doctors A LOT of money - that money is disproportionate to their value added. We need fewer doctors not more - we need more PT, NPs, and RNs. Lower cost, better care, less ego.
You’re right that often the best treatment for bone and joint pain is physical therapy and perhaps there are ways that we can allow NP’s and PA’s as well as AI to do more.
But I am not sure the solution is fewer doctors. As a primary care physician, I have seen lots of NP’s and PA’s who practice very expensive care because it is probably beyond their scope. They refer to multiple specialties and order lots of tests. Just because you can pay them less to see a patient doesn’t mean you are saving money. The best use seems to be for narrow practice like only managing diabetes medication or heart failure. The more undifferentiated the problem the more challenging it is for a mid level provider.
As far as imaging—evidence on imaging is not diagnosis. Lots of things can be seen on xray, none of them may be the cause for the pain or debility. The key is taking a good history from the patient—this is still the most valuable diagnostic tool we have in medicine. It’s also cheap.
Your claim about doctors prescribing is wrong. Pharma reps aren’t even allowed around my clinic or hospital and I work at a large teaching center. Physicians have to know mechanisms of actions of the drugs they prescribe, it’s on our licensing exam.
I am an NP that works in an FQHC and I can tell you without question that the doctors are unnecessarily more expensive than the NPs, without question. NPs are payed half what the DOs/MDs make, we are supposed to be able to access them when we feel out of scope, we can’t, so we send to specialists. As a society we need to have a come to Jesus about the fact that you don’t need 8 yrs of rigorous, expensive AF schooling followed by 3 yrs of residency to treat 95% of cases at the primary care level. Also, of course not all, but primary care providers need to be able to understand the gen pop, and NPs are more often normal people that had to work normal people jobs before becoming providers whereas doctors are a demographic that purposefully distills their members into some of the most identifiably abnormal professionals on the planet. FNPs need a year of residency to fix those specific kinks, and our CMEs should be targeted at expanding our knowledge about our weaknesses you identify… but that would all cost a fraction as much as the process of creating more outpatient primary care physicians, full stop.
Is the crux of the argument that doctors and medical businesses benefit from higher prices thus have no incentive to fund residencies other than at a rate to replace doctors that are retiring and/or maintain some minimum acceptable level of care and thus the federal government has to step up to fund this? Why doesn't or can't the free market fix this? That would be interesting to understand. If the medicare funded residencies were eliminated entirely would there be no or very few new doctors and, outside of the increase in cost from further reduced supply, would costs increase more ?
Residencies are highly regulated so they are essentially education programs where the students (or in this case trainee doctors) don’t pay tuition. In theory they could do enough useful work to pay for themselves (salaries aren’t that high), but teaching requires faculty physician time that could otherwise focus on patient care, so residents would need to be more independent (and be able to bill insurance for services) to pay for themselves. So residencies are good for the overall medical system but can’t really make money for the sponsoring program as currently organized
What percentage of residencies are Medicare-funded? How many doctors are there (Medicare-funded or otherwise)? Is 14,000 a lot? I agree with the premise but am finding the statistics unsatisfying
Per the 124k shortage statistic elsewhere in the article, it sounds like it'll handle 10-ish percent of the shortfall. So, not nothing, but definitely not close to a complete fix either. Probably will also be worth making it easier to set up independent practices.
I’m not positive that’s right. It’s 14K new residencies over the seven year period. Some residencies are only 3 years, so a portion of those new residencies could churn out 2 net new docs over the ramp up period, and once the full allotment is live, you’re looking at 14k net new docs each year thereafter. It would take a while, but wouldn’t the new residencies theoretically eliminate the gap over time?
Hopefully? I'm certainly not going to object if this is enough to solve the problem on its own, and I'm definitely unfamiliar enough to have missed stocks-vs-flows in the terminology here.
Population might not grow over those seven years either, per the fertility crisis, so also might not be as much of a moving target as it used to be.
“Facing pressure to control Medicare spending, Congress decided to cap the number of residencies that Medicare would fund through its Graduate Medical Education payments under the Balanced Budget Act of 1997.”
There are many residency positions that dont get filled, mostly in primary care, because there aren't enough graduates from American Medical Schools and just adding more residency slots might not change that.
All residencies compete for American graduates and take foreign grads only secondarily, both foreigners and Americans who study abroad mostly in the Caribbean, and the reality is that the less competitive the residency is the more foreign grads they take which is a disincentive, as they get a bad rep so often leave the positions unfilled. If there were more graduates of American Medical schools there would be less unfilled positions, and although I am not opposed to more residency slots, the biggest problem imo is not enough Med School graduates.
Besides, it is an odd situation where the richest country in the world can't educated enough doctors that we need to steal from poorer countries who have worse MD shortages ie the brain drain. And the other part is that we fill so many slots with Americans graduating from the Caribbean because they couldn't get into medical school. You might not get into a US school if you have a 3.4 but you can get in the Caribbean with a 3.0. Seems like an end run process.
Family/General Practice doctors are being replaced by Nurse Practitioners (NPs) where there's one doctor who's the head of the office, supervising the NPs. The 'supervision' can be done remotely.
It's similar to the change that happened in dentistry decades ago, before there was dental insurance, and patients had to pay upfront. Cost consciousness made dentists realize the need to hand over their routine work (teeth cleaning, X-rays) to someone who was trained, but not a DMD. That allowed dentists to concentrate on higher-value things like filling cavities or performing root canals.
However, I don't know if the Medicare caps on medical school slots have any impact on the accessibility of training NPs.
The key issue that expanding the number of residency positions will not address is the large variation in physician compensation. Today, many medical students prefer to take an extra research year and incur additional student loans to match into dermatology or neurosurgery, rather than pediatrics or family medicine, where a significant proportion of positions remain unfilled each year.
The short-term fix for this is to allow anybody who has completed medical school to practice in underserved areas, arm medical and physician' assistants with AI to take on more responsibilities.
The whole model was only ever meant to serve the interests of providers. It's not just the intentional bottlenecks of supply. It's the whole model that defeats any market forces. Electricians can learn their trade by being apprentices, and get paid a fair wage as they go that rises with their growing capability for independent work. Why not med school graduates? Why do residencies need to even be funded at all? Residents are doing work that ought to be directly billable.
As for overwork, that is entirely optional. Many doctors don't work Fridays, or Mondays. Many don't work either. Many don't take new patients. What the shortage allows is for doctors who are willing to hustle to get rich enough to retire and go into recreational ranching by their late forties, after maybe 15 years of actual work. This rapid payoff compounds the shortage.
The big money in our society today is with the medical providers and the hospitals. Where they used to be charities, now they are major donors to the arts, etc. They have bought the politicians and the media networks. They have set up the entire system for their own benefit. Mainly by kneecapping market forces in every possible way. Do you think pharmaceutical companies give free meds to poor people out of the goodness of their hearts? It's just cost shifting to maximize profits. Hospitals and doctors are all about it.
As a doctor, I support laws that would allow more physicians to practice. And most of my younger colleagues (hospital employees like the vast majority of younger physicians) say the same. My specialty organization doesn’t because it’s captured by boomer and older Gen X physicians who are partners in highly reimbursed private practices that represent maybe the top 5-10% of jobs in my specialty. And if I am applying for a new job as a part time physician, I am not going to be hired by a hospital or private practice that can choose a full time employee instead. And founding my own private practice as a part time doctor is not going to succeed either.
The less-capitalized providers are also victims of the market manipulations of the hospitals and large practices. It sounds like you may be one of those.
But you also indicate you only want to practice part time. Not many in any profession can make it like that, at least not until they're at the top of the heap and calling all the shots. It's not necessarily rigged markets that would pressure you into full time.
This is a great article, except for the part that says “physicians can charge more”. We can’t. Our pay is tied to MPFS, which decreases every year, or is artificially determined by hospital administrator’s decisions of “fair market value”.
Maybe you meant to say hospitals/ health systems can charge more for care.
100% agree. I am in private practice and my salary has not budged. Every year the CPT code reimbursement goes down and down. You have to do more and more just to stay in place. Like Alice in Wonderland.
As a a physician myself it seems a bit self serving to see doctors bemoaning their meager earnings. Currently the median physician salary by this source is 374K and even the lower paying specialties Pediatrics and Family Practice average 250-300K. ( https://medschoolinsiders.com/pre-med/how-much-do-doctors-make/ )
You and I know that coding is whack- a mole and whatever reimbursement gimmicks the insurers try, MDs will game it. You counter decreased code reimbursement by upcoding and I remember when I started in the 90s the average code was a level 2 and 3 and now you have some coding specialist gaming it to get level 4s for every cold visit by asking a bunch of unnecessary questions on some template
Whether MD earnings are keeping up with inflation is hard to say. I looked at half a dozen articles and it depends on the time frames and Covid and post Covid inflation throws a monkey wrench in calculations, but regardless, myself as a lowly FP am not going to cry about making 250K a year which puts me in the top 3% and specialists who make more like 350 are in the top 1%.
The need for primary care docs is so acute! My daughter is a 3rd year Family Medicine resident and their workloads are so high that most grads from her program choose to work an 80 percent schedule because full-time is unsustainable. In addition to the sheer lack of bodies to do the work, dealing with patient questions & requests via patient portals and the ever worsening prior authorization process has greatly increased work that happens outside the exam room.
This is THE issue. The reimbursement rate for primary care also far to low
The 124k physician shortage is the highest estimate from a report commissioned by the AAMC (https://www.aamc.org/media/75236/download?attachment). Physicians per capita has been steadily increasing over time (https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?locations=US). Demand is indeed going up though because more people have insurance and are aging or staying alive from chronic disease longer than prior.
Also, it doesn’t make much sense to say the problem is total residency positions when 800 of 5000 FM positions and 350 of 11,000 IM positions are unfilled. The largest bottleneck is very clearly US medical school positions, which are in very high demand and are not going unfilled. Sure, many subspecialty residency positions are bottlenecks as well, but if we are discussing an overall physician shortage this is mostly in primary care.
I made that same point above. We need more Medical School Positions. The reason that residencies that dont fill in primary care is that programs know if they become predominantly foreign grads they lose prestige and and become less competitive. No American grad has trouble finding a spot but there aren't enough of them. In a country as wealthy as we are why cant we train enough doctors and instead have to steal them from poorer countries, where they are needed more, or have Caribbean schools educate us.
I have heard about this issue many times from many places and the one thing I never understand: Why is this a _bottleneck_. Is there some law or regulation that prevents someone _other_ than the federal government from funding a residency? I have trouble believing that a residency is so expensive that it could not comfortably be paid for from the lifetime value of a doctor (and if it really _is_ that expensive...why? That seems like the problem to be addressed), in which case there should be several different mechanisms for paying for this.
Yes, the federal government has not kept up with it's funding of these residency slots, but what is preventing some other mechanism from taking up the slack?
My quick math from a CRS report (IF13088) is that, in 2023, DGME and IME paid about $180K per FTE intern or resident covered by the program.
That's a big hole for any individual other insurer or actor to fill — it's also a lot more tuition debt for already debt-laden prospective residents to foot (if that's going to be the source of funding).
It's true that in 2023 private spending on hospital care made up 48% of the total,* and Medicare and Medicaid together made up less than that (45%), but a non-federal source funding DGME and IME spending would be a collective action problem for the ages. And ultimately, the costs would be incurred by premium payers (whose high premiums are presumably cause for a government shutdown) instead of tax payers, which is a fairly regressive choice — more regressive than Medicare's tax as currently constructed, I think.
*according to my calculations of the National Health Expenditures by type of service and source of funds, CY 1960-2023 (ZIP) for 2023, counting private as OOP + private health insurance + workers comp + other private fees
The real problem is scope of practice. We don’t need doctors for lots and lots of things. 1) 90% of the time they have no idea what they are prescribing - they haven’t read an evidence report, they just prescribe based on little info, pharma marketing, speed and habit. Doctors created the entire opioid epidemic. 2) a great many things can be diagnosed by a an x ray or radiology tech - with at least as much accuracy as a doctor if they are experienced (and now by AI) 3) many many many things are best treated with PT - not surgery or drugs. PT is better, cheaper all the way. 4) as bad as “Dr Google” can be, the fact is that medical information of high quality isn’t hard to find - and most doctors don’t use evidence based medicine anyway. The entire profession is overrated and massively overpaid based on a legacy value that is little more than nostalgia at this point. The cost of health care is driven by the need to pay doctors A LOT of money - that money is disproportionate to their value added. We need fewer doctors not more - we need more PT, NPs, and RNs. Lower cost, better care, less ego.
You’re right that often the best treatment for bone and joint pain is physical therapy and perhaps there are ways that we can allow NP’s and PA’s as well as AI to do more.
But I am not sure the solution is fewer doctors. As a primary care physician, I have seen lots of NP’s and PA’s who practice very expensive care because it is probably beyond their scope. They refer to multiple specialties and order lots of tests. Just because you can pay them less to see a patient doesn’t mean you are saving money. The best use seems to be for narrow practice like only managing diabetes medication or heart failure. The more undifferentiated the problem the more challenging it is for a mid level provider.
As far as imaging—evidence on imaging is not diagnosis. Lots of things can be seen on xray, none of them may be the cause for the pain or debility. The key is taking a good history from the patient—this is still the most valuable diagnostic tool we have in medicine. It’s also cheap.
Your claim about doctors prescribing is wrong. Pharma reps aren’t even allowed around my clinic or hospital and I work at a large teaching center. Physicians have to know mechanisms of actions of the drugs they prescribe, it’s on our licensing exam.
I am an NP that works in an FQHC and I can tell you without question that the doctors are unnecessarily more expensive than the NPs, without question. NPs are payed half what the DOs/MDs make, we are supposed to be able to access them when we feel out of scope, we can’t, so we send to specialists. As a society we need to have a come to Jesus about the fact that you don’t need 8 yrs of rigorous, expensive AF schooling followed by 3 yrs of residency to treat 95% of cases at the primary care level. Also, of course not all, but primary care providers need to be able to understand the gen pop, and NPs are more often normal people that had to work normal people jobs before becoming providers whereas doctors are a demographic that purposefully distills their members into some of the most identifiably abnormal professionals on the planet. FNPs need a year of residency to fix those specific kinks, and our CMEs should be targeted at expanding our knowledge about our weaknesses you identify… but that would all cost a fraction as much as the process of creating more outpatient primary care physicians, full stop.
Is the crux of the argument that doctors and medical businesses benefit from higher prices thus have no incentive to fund residencies other than at a rate to replace doctors that are retiring and/or maintain some minimum acceptable level of care and thus the federal government has to step up to fund this? Why doesn't or can't the free market fix this? That would be interesting to understand. If the medicare funded residencies were eliminated entirely would there be no or very few new doctors and, outside of the increase in cost from further reduced supply, would costs increase more ?
Residencies are highly regulated so they are essentially education programs where the students (or in this case trainee doctors) don’t pay tuition. In theory they could do enough useful work to pay for themselves (salaries aren’t that high), but teaching requires faculty physician time that could otherwise focus on patient care, so residents would need to be more independent (and be able to bill insurance for services) to pay for themselves. So residencies are good for the overall medical system but can’t really make money for the sponsoring program as currently organized
What percentage of residencies are Medicare-funded? How many doctors are there (Medicare-funded or otherwise)? Is 14,000 a lot? I agree with the premise but am finding the statistics unsatisfying
Per the 124k shortage statistic elsewhere in the article, it sounds like it'll handle 10-ish percent of the shortfall. So, not nothing, but definitely not close to a complete fix either. Probably will also be worth making it easier to set up independent practices.
I’m not positive that’s right. It’s 14K new residencies over the seven year period. Some residencies are only 3 years, so a portion of those new residencies could churn out 2 net new docs over the ramp up period, and once the full allotment is live, you’re looking at 14k net new docs each year thereafter. It would take a while, but wouldn’t the new residencies theoretically eliminate the gap over time?
Hopefully? I'm certainly not going to object if this is enough to solve the problem on its own, and I'm definitely unfamiliar enough to have missed stocks-vs-flows in the terminology here.
Population might not grow over those seven years either, per the fertility crisis, so also might not be as much of a moving target as it used to be.
“Facing pressure to control Medicare spending, Congress decided to cap the number of residencies that Medicare would fund through its Graduate Medical Education payments under the Balanced Budget Act of 1997.”
Did any particular group lobby Congress for this?
There are many residency positions that dont get filled, mostly in primary care, because there aren't enough graduates from American Medical Schools and just adding more residency slots might not change that.
All residencies compete for American graduates and take foreign grads only secondarily, both foreigners and Americans who study abroad mostly in the Caribbean, and the reality is that the less competitive the residency is the more foreign grads they take which is a disincentive, as they get a bad rep so often leave the positions unfilled. If there were more graduates of American Medical schools there would be less unfilled positions, and although I am not opposed to more residency slots, the biggest problem imo is not enough Med School graduates.
Besides, it is an odd situation where the richest country in the world can't educated enough doctors that we need to steal from poorer countries who have worse MD shortages ie the brain drain. And the other part is that we fill so many slots with Americans graduating from the Caribbean because they couldn't get into medical school. You might not get into a US school if you have a 3.4 but you can get in the Caribbean with a 3.0. Seems like an end run process.
Family/General Practice doctors are being replaced by Nurse Practitioners (NPs) where there's one doctor who's the head of the office, supervising the NPs. The 'supervision' can be done remotely.
It's similar to the change that happened in dentistry decades ago, before there was dental insurance, and patients had to pay upfront. Cost consciousness made dentists realize the need to hand over their routine work (teeth cleaning, X-rays) to someone who was trained, but not a DMD. That allowed dentists to concentrate on higher-value things like filling cavities or performing root canals.
However, I don't know if the Medicare caps on medical school slots have any impact on the accessibility of training NPs.
The key issue that expanding the number of residency positions will not address is the large variation in physician compensation. Today, many medical students prefer to take an extra research year and incur additional student loans to match into dermatology or neurosurgery, rather than pediatrics or family medicine, where a significant proportion of positions remain unfilled each year.
While what you say is mostly true, I don’t think there is anything preventing funding of residencies by entities other than the federal government.
States, cities, universities, foundations, or individuals could do it. Why haven’t they?
The short-term fix for this is to allow anybody who has completed medical school to practice in underserved areas, arm medical and physician' assistants with AI to take on more responsibilities.
Thank you. This makes a lot of sense. I am not very familiar with all of this so appreciate the insight.
Australia did something similar in the 1980s, but we changed course later
The whole model was only ever meant to serve the interests of providers. It's not just the intentional bottlenecks of supply. It's the whole model that defeats any market forces. Electricians can learn their trade by being apprentices, and get paid a fair wage as they go that rises with their growing capability for independent work. Why not med school graduates? Why do residencies need to even be funded at all? Residents are doing work that ought to be directly billable.
As for overwork, that is entirely optional. Many doctors don't work Fridays, or Mondays. Many don't work either. Many don't take new patients. What the shortage allows is for doctors who are willing to hustle to get rich enough to retire and go into recreational ranching by their late forties, after maybe 15 years of actual work. This rapid payoff compounds the shortage.
The big money in our society today is with the medical providers and the hospitals. Where they used to be charities, now they are major donors to the arts, etc. They have bought the politicians and the media networks. They have set up the entire system for their own benefit. Mainly by kneecapping market forces in every possible way. Do you think pharmaceutical companies give free meds to poor people out of the goodness of their hearts? It's just cost shifting to maximize profits. Hospitals and doctors are all about it.
As a doctor, I support laws that would allow more physicians to practice. And most of my younger colleagues (hospital employees like the vast majority of younger physicians) say the same. My specialty organization doesn’t because it’s captured by boomer and older Gen X physicians who are partners in highly reimbursed private practices that represent maybe the top 5-10% of jobs in my specialty. And if I am applying for a new job as a part time physician, I am not going to be hired by a hospital or private practice that can choose a full time employee instead. And founding my own private practice as a part time doctor is not going to succeed either.
The less-capitalized providers are also victims of the market manipulations of the hospitals and large practices. It sounds like you may be one of those.
But you also indicate you only want to practice part time. Not many in any profession can make it like that, at least not until they're at the top of the heap and calling all the shots. It's not necessarily rigged markets that would pressure you into full time.