THE CRISIS of PHYSICIANS SUPPLY

and the
MYTHS of HEALTH CARE REFORM

Richard A. Cooper, M.D.

Leonard Davis Institute of Health Economics
University of Pennsylvania
The Crisis of Physician Supply
 Physician Supply and Demand
1980-2025
400
Physicians per 100,000 of population

Trend Model

350 Shortage
Demand = 200,000
physicians

300 Supply AMA Masterfile

.

Model

250

200
 Had residency programs continued to expand after 1996
at ~500/year, the US would not now be facing shortages.
400 Continued
increase in
Physicians per 100,000 of population

PGY-1
positions after
1996
350 at 500 per year
Demand

300 Supply
.

250

200
 But even increasing PGY-1 residency positions by
10,000 over 10 years will not close the gap…
400
Physicians per 100,000 of population

350
Demand
+1,000 per yr x10
+ 500 per yr 2010-25
300 Supply No change
.

250

200
 …and the gap will continue for decades.
None of us has ever experienced shortages such as these.
400
Physicians per 100,000 of population

+1,000/yr 2010-2030

+500/yr 2010-2050
350 Demand

300
.

Supply

250

200
 The Myths of Health Care Reform
#1 Unexplained geographic variation in health care
is due to the overuse of supply-sensitive
specialty services.
#2 If spending everywhere could be the same as in
the lowest-spending regions, the US could save
30%.
#3 States with more specialists have lower quality
care.
#4 Areas with fewer specialists and more primary
care physicians have better health care at lower
costs.
#5 The US spends more than other developed
countries but it has worse outcomes.

Therefore, the US doesn’t need more physicians; it

 Realities
Poverty is the major factor affecting
geographic variation in health care.

Shortages of specialists is the major factor

that will adversely affect health care quality.
A Brief Lesson about Poverty in America
--- Poverty is geographic ---

Regional Poverty
Urban Poverty Ghettos
 Regional Poverty

20%
Lowest
20%
Highest
Matthew Cooper, 2009
 Urban Poverty Ghettos

20%
Lowest
20%
Highest
Matthew Cooper, 2009
 Chicago
Income = 114% of US Average

Poverty, 2000
0 - 20%
20 - 40%
40 - 60%
60 - 80%
80 - 100%

The Bruton Center

The University of Texas at Dallas
 Philadelphia
Income = 118% of US Average

The Bruton Center

The University of Texas at Dallas
 Dallas –Ft Worth
Income = 107% of US Average

The Bruton Center

The University of Texas at Dallas
 New York – Newark
Income – 137% of US Average

The Bruton Center

The University of Texas at Dallas
 Poverty and Health Care Utilization
Hospital Days and Hospital Admissions
Per Capita Income Ratio Poor vs. Wealthy
8 Regions
1 ,0 0 0
6
Days 6
750
per 4
Days per 1,000

1,000
500
4
2

250 0 2
Per Capita Income Diabetes
Asthma
Milwaukee ZIP Codes
COPD CHF
 Myth #1
“Unexplained geographic variation in health care is due to
the overuse of supply-sensitive specialty services.”

Milwaukee HRR
Wisconsin

Dartmouth Atlas, 2003 (from Orszag, 2007)

 Milwaukee
Income = 108% of US Average

The Bruton Center

The University of Texas at Dallas
 Wisconsin Hospital Referral Regions (HRRs)
”Unexplained variation”
600

500 Milwaukee 30% excess

Hospital
Days
per 400
1,000

300

200

100 Wisconsin HRRs

 Wisconsin Hospital Referral Regions (HRRs)
Variation explained by poverty
600
Poverty Corridor

500 Milwaukee
Hospital
Days Milwaukee minus “Poverty Corridor”
per 400 
1,000

300

200

100 Wisconsin HRRs

 Myth #1 (continued)
“Unexplained geographic variation in health care is due to
the overuse of supply-sensitive specialty services.”

Los Angeles

Dartmouth Atlas, 2003 (from Orszag, 2007)

 Los Angeles
Average Income = 108% of US Average

The Bruton Center

The University of Texas at Dallas
 Los Angeles vs. Minnesota
”Unexplained Variation”

2,500
Medicare
Hospital
LA
Days County
per
1,000 2,000
Minnesota

1,500

From Rosenthal, et al, UCLA

 Los Angeles vs. Minnesota
Variation Explained by Poverty
LA Poverty
Core
2,500
Medicare
Hospital LA
Days County
per LA minus
1,000 2,000 Poverty Core
Minnesota

1,500

From Rosenthal, et al, UCLA

 Myth #2
“If spending everywhere could be the same as in the
lowest-spending quintile, the US could save 30%.”

Dartmouth Atlas, 2003 (from Orszag, 2007)

 Myth #2 (continued)
“If spending everywhere could be the same as in the
lowest-spending quintile, the US could save 30%.”

Lowest Spending

Highest Spending

Dartmouth Atlas, 2003 (from Orszag, 2007)

 Medicare Spending and

Low Spending-Low
Poverty

High Spending-High
Poverty
 Myth #3
“States with more specialists have lower quality health care.”
(Baicker and Chandra, 2004)

QUALITY

Best

Worst

Least SPECIALISTS per 10,000 Most

Baicker and Chandra, Health Affairs, 2004

 Myth #3
It’s actually states with more SPECIALIST RESIDUALS
that have and lower quality health care.

QUALITY

Best

Worst

Least SPECIALIST RESIDUALS Most

 Specialists and Health Care Quality
Myth Reality
23 More Specialist 225 More Real
“Residuals”  Specialists 
Poorer Quality Better Quality
22
Specialist "Residuals"

215

Physicians/100K (Actual)
21 205

20 195

Good Poor Good Poor

19 185
 Myth #4
“Areas with fewer specialists and more
primary care physicians (i.e., family physicians)
have better health care at lower costs.”

Family Practice Quartiles

High-FP

Low-FP
Low-FP

High-FP
 Myth #5
“The US spends more than other developed countries,
150 but it has worse outcomes.”
Mortality Population
Mortality
France 65 60 M
Population
125 US Australia 71 20M
Spain 74 43 M
Italy 74 58 M
Canada 77 32 M
100 Norway 80 5M
Netherlands 82 16 M
Sweden 82 9M
Preventable Mortality
75 Greece
Austria
84
84
11 M
8M
Germany 90 82 M
Finland 93 5M
50 New Zealand 96 4M
Denmark 101 5M
UK 103 60 M

25 OECD Countries Ireland 103 4M

Portugal 104 10 M
Deaths per 100,000 Commonwealth 2007
 Confederacy vs. The Rest
150

125

100

Preventable Mortality
75

50

25 OECD Countries

Deaths per 100,000 Commonwealth 2007

 Six Nations of White America
150

125

100

Preventable Mortality
75

50

25 OECD Countries

Deaths per 100,000 Commonwealth 2007

 Six Nations of Black America
250

200

150

100
Preventable Mortality

50 OECD Countries

Deaths per 100,000 Commonwealth 2007

HEALTH CARE REFORM IS TAKING OFF

Dorothy: Come back! Come back! Don't

leave without me! Come back!
Wizard of Oz: I can't come back! I don't
know how it works! Good-bye folks!
 Payments Related to “Efficiency”
An incentive payment of 5% for providers in the 20% of
counties with the lowest Medicare expenditures.
Payment reduced by 5% if aggregated physician
resource use is above the 90th percentile nationally.

Low-poverty
areas will
be the
winners
 Payments Related to Hospital Readmissions

Penalties for hospitals with more than

benchmark levels of “preventable” readmissions

8
Hospitals
R atio of 6 that care
for the
P oores t poor will be
to 4 the losers.
W ealth ies t
Z on es 2

0
 Physician Workforce Initiatives
Redistribute unused residency positions.
Provide financial incentives for medical graduates to
choose primary care.

Profound and
continuing
physician shortages.
The sad tale of
health care reform.
 Conclusions

The nation cannot have efficient health care if it

does not address the added health care needs of
the poorest members of our society.

The nation will not have effective health care if it

does not assure the training of sufficient numbers
of physicians to provide the needed care.
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http://buzcooper.com

PHYSICIANS AND HEALTH CARE REFORM

Commentaries and Controversies

Thank you