Economic Evidence of a Primary care Physician Shortage Carol Simon, PhD, William White, PhD, Andrew Johnson, MA, Alyssa Pozniak, PhD American Public Health Association Annual Meeting November 2007 We are grateful to AHRQ, the Commonwealth Fund and the California Endowment for support

Research Objectives Concern that there is an emerging physician shortage Researchers suggest this shortage is result of growing demand for services that is not matched by a corresponding increase in physician supply Policy makers have already identified “shortage areas”, e.g. HRSA These are largely defined on the basis of MDs/population Areas where there is “evidence” of unmet needs Do these areas exhibit characteristics of an “economic shortage area”? This is important: if not, increasing supply possibly won’t help

A shortage caused by growth in demand P S Demand grows, from D1 to D2 At existing price p(1) shortage develops = q’-q(1) p1 shortage D2 D1 q1 q’ Q

A shortage caused by growth in demand P S Shortage put upward pressure on price, which encourages increase in S and chokes off demand, until we are at P2, Q2 BUT there are lots of reasons in health markets why prices don’t adjust, at least quickly p2 p1 shortage D1 D2 q1 q’ Q q2

Economic Signposts of a demand driven shortage Queues at existing prices – providers are busy Upward pressure on prices Providers expand volume as prices rise Provider profits, and often incomes, rise Due to price and volume

Empirical markers of a “shortage” Queues at existing prices – providers are busy Not accepting new patients Longer wait time for visits: recommended return for chronic care is longer (asthma) Upward pressure on prices : Price for new patient std office visit (adj for specialty, state) Provider profits, and often incomes, rise Income levels and income growth over last 3 years

Study Design & Population Studied Multi-mode (mail, web) survey link MD behavior to characteristics of practice and managed care environment random sample of 1,600 primary care and pediatric physicians from AMA Physician Masterfile Patient care MDs practicing in California, Georgia, Illinois, Pennsylvania, and Texas Pediatric and minority MDs over-sampled ~50% pediatricians, ~15% African American and/or Hispanic Fielded January-May 2007 response rate > 65% Merged ARF and census data to describe “markets” (counties)

Survey Data Domains Practice characteristics MD characteristics Administrative controls Payer types Revenues, price for new pt visit Size Ownership Use of electronic health records or other HIT P4P MD characteristics Demographics Income Specialty Hours worked/week Treatment patterns for key chronic conditions (i.e., depression & asthma) Questions and series of vignettes

Are physicians in “shortage” areas capacity constrained Accept new patients?

Are incomes in shortage areas pushed higher Are incomes in shortage areas pushed higher? Adj for specialty, yrs in practice, state fixed effects

Evidence of delays in follow-up care based on pt with mild persistant asthma

Thoughts on our early findings No systematic evidence of demand-driven shortage in HRSA defined PC shortage areas Data suggestive of inadequate demand, not excessive demand Need to bolster “willingness and ability to pay” for care e.g., insurance coverage and incomes Increasing supply could reduce financial viability of existing providers In areas with highest population growth there is evidence of queues, longer follow-up and upward pressure on incomes and prices Here, increasing supply might raise quantity of services available and mitigate cost increases. Mixed results on “poor” areas. Some evidence of a “classic” shortage when look at smaller areas (ZCTA) and by specialty (GIM, not peds)

Thank you Thanks to funding agencies: AHRQ, California Endowment, Commonwealth Fund

Retirement plans Plans to retire or leave practice for non-patient care in the next 3 years All PCPs Retire=2.1 Leave for other job = 1.7 PCPs in PC shortage area: Retire = 3.7%; leave for other jobs = 1.5 In high pop growth areas: Retire = 1.7; leave for other job = 1.2 In low income areas: Retire = 1.5; leave for other work = 3.5