1. 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

2. 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

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

4. A shortage caused by growth in demandP 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

5. 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

6. 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

7. 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)

8. 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

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

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

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

12. 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)

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

14. 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