Reimbursement and Physician Distribution

Robert C. Bowman, M.D.

See also Five Periods of Health Policy and Physician Career Choice

The choice of primary care, rural practice, and practice in high poverty areas was considered for the medical school classes graduating 1965 – 2000. There were two major periods of physician career change involving increases in choice of primary care and family medicine.

The first period involved 1965 – 1975 when the choice of all inclusive primary care increased from 28 % to 41 %.

The birth of family medicine in 1971 may have contributed to this area, but Internal Medicine also had dramatic increases.

The growth rates of Medicare are shown, not actual reimbursement. The reimbursements remained at a constant level early in the course of Medicare. Also Medicaid is not show and expansions of Medicaid have also played a key role in support of primary care physicians.

The reimbursement differentials for primary care as compared to specialty care dramatically changed in the 1990s. The Medicare increases were minimal, but primary care reimbursement and support of those hiring family physicians was greatly increased. Also Medicaid was doubled during 1990 - 1995 with tremendous expansions of lower income and middle income patients, those most likely to be cared for by family physicians.

In the last few years, the tables have been completely turned on primary care.

The beginning of the second period involves the classes graduating 1988 – 1992. The low point for office-based primary care was 30% or 4458 out of 15052 graduates in 1990 (similar percentage 1988 - 1992) with the peak in office based primary care choice at 39% in 1996 or 6147 out of 15653.

During both periods of time the nation greatly improved the prospects for a choice of primary care as compared to specialty care. This involved two different approaches which boosted the perception of primary care choices as compared to specialty care choices.

1. Policies increasing reimbursement for primary care physicians and those who need such physicians
2. Policies that increased reimbursement and support for primary care and decreased reimbursement for non-primary care career choices.

Each period involves a variety of career influences.

The first period involved the institution of Medicare and Medicaid, the creation of family medicine, new support for family medicine in a number of ways at the state and federal level, and emphasis on primary care.

The second period in the 1990s involved the managed care period, steady and increasing reimbursements for primary care, significant intermittent decreases in reimbursement for specialty care, and increasing support for rural hospitals and community health centers. Detailed workforce studies must consider other increases or decreases in physicians who would locate in underserved areas.

There have been other influences to consider. Each year about 150 choose urban underserved locations and 200 choose rural underserved locations. Military levels can exceed these numbers and this is more likely with declines in family medicine. During the 1990s the military increasingly recruited family physicians with up to 200 per year taken out of the US primary care workforce by the year 2003 FP residency graduation year. Military Family Physicians

Interpretation

The changes in US workforce are more comprehensive than the simple Title VII and other studies have indicated.

Locations of Allopathic Medical School Graduates from the 1987 - 2000 Classes

Data on more recent graduates is not significantly different.

The declines in family medicine and general practice throughout the 1950s and 1960s left the nation without a distributional specialty. Once there is a specialty that will distribute, this student career choice must be supported by reimbursement for poor patients in rural and urban areas, including the elderly. Medicare and Medicaid supplied more than enough boost for support of new physicians in areas with marginal ability to support them previously, especially inner city and rural locations. Total FPGP percent of physicians doubled from 1965 - 1975. 

Compare to  Five Periods of Health Policy and Physician Career Choice graphic for family medicine contributions

Changes in the 1960s and 1970s

The first era of primary care growth included the initiation of Medicare, Medicaid, family medicine, and early medical school expansion. The creation of family medicine brought back a physician specialty that would distribute. Initially the new specialty of family medicine had over 30 % of graduates choosing rural locations before settling in to a fairly constant 22 % rural graduation rate as a discipline. The early increased choice of rural practice was another indication that family physicians were capable of markets that were not previously able to be filled without a distributional specialty. The physicians entering poverty locations in the nation doubled from 1966 to 1975, declined slightly, and rose again in the late 1990s.

The early popularity of the family medicine specialty, changes in medical education schools and training, and the support of Medicare and Medicaid fueled a growth pattern not seen in family medicine or primary care or poverty locations until the recent managed care/increase primary care reimbursement era.

The impact of federal reimbursement involves increases in not only family medicine, but also a 50 % increases in choice of internal medicine in the classes graduating 1965 - 1975. Family medicine and internal medicine appear to be complimentary during this and other growth periods. With increases in internal medicine (from 12.4 % of medical students to 18 %) and family medicine (4.5 to 13.9 %) leading the way, total primary care (all types internal medicine, pediatrics, family medicine, general practice) career choices rose from 26.7% in 1965 to 41.1 % of allopathic graduates of 1975.

The impact of the student birth origins should not be overlooked regarding the improving primary care and rural practice location rates in this era. The medical student composition during the 1970s included 27 % from rural backgrounds (towns of less than 10000), twice the rural student composition of today's allopathic medical schools (AAMC GQs). Studies demonstrate that students born in all but the most urban counties have a much higher choice of family medicine and rural practice (Bowman Birth Origins).

Medical School Expansion - Older Allopathic Medical Schools and those initiated early in medical school expansion did not distribute graduates into primary care, family medicine, or rural locations to the same degree as the newer schools.  The new allopathic medical schools beginning operation since 1971 had a 55 % increase in graduation of physicians who were in rural locations in 2004 (10.2 % for pre 1973, 16.1 % for new).

These distributional schools include Mercer (1973 start), Northeast Ohio, Wright State, Eastern Virginia, U of South Carolina, Marshall, Morehouse, Oral Roberts (now closed), and East Tennessee State. Duluth also began operation during this time period. These are the same schools that have the highest choice of family medicine and primary care choice in allopathic medical schools. These schools were much more likely to have significant family medicine influences from their creation. Unfortunately they also shared the common characteristic of a smaller class size.

New Allopathic School Impacts for 1987 - 2000 Allopathic Graduates

FP Unlikely include 50 % born in US counties over 1 million and 14 % born in other countries

FP Likely includes those born in the US in counties of less than 1 million. The medical schools with the lowest FP and rural location rates have the highest FP unlikely student compositions, in come cases over 90 %. Half of US allopathic schools have over 70 % FP unlikely. 

Newer Allopathic Medical Schools

Health Policy Involving Physician Career Decisions in the 1990s

Changes influencing student consideration of family medicine and primary care

1. Increases in primary care reimbursement
2. Decreases in specialist reimbursement at regular intervals throughout the mid to late 1990s
3. National reports about declines in specialist reimbursement and predicted lack of demand for specialists and hospital beds
4. Increases in funding for Community Health Centers
5. Rural health clinics, FQHCs, critical access hospitals greatly expanded to improve the ability of underserved areas to support physicians and health care

The evidence for physician career change involve several areas. These include choice of family medicine, rural family medicine, office-based primary care, rural practice locations for all physicians, and physician location in poverty areas of the nation. The dramatic increases in family medicine and primary care are well known. This impact was most marked upon students who were least likely to choose distributional careers prior to this period. The choice of rural practice was improved and then declined. Choice of poverty practice also improved, then declined

The choice of practice locations with 20 % poverty levels or above is also dramatic. Again the changes in health policy seem to have dictated physician distribution to underserved locations.

This table involves only office-based primary care physicians. In 2000 and 2001 there is evidence of slow decline.

It is not possible to interpret studies of all US physicians since those with residencies over 3 years in length have not completed training and chosen practice locations for the class years of 1999-2000 or earlier in some specialties. Even the graduates of 2000 may have incomplete data in 20 % for location and specialty. There is enough to see some dramatic improvements across the nation for health care access.

These career change tables also illustrate the difficulty in interpretation of workforce studies that do not allow for health policy. The Title VII studies had ending points in the late 1990s. The lifestyle career choice studies began in this era. Student career choices had very little to do with lifestyle or Title VII since the very potential to have a job at all or to have an increasing income compared to a declining income was at stake. New physicians or new entrants to any job market have to be sensitive to the viability of such careers.

Health policy at the end of the 1997 - 2004

1. Decreases in primary care reimbursement
2. Major increases in reimbursement for non-primary care physicians
3. Recession forcing cuts in Medicaid patient numbers and support at federal and state levels without any improvements. Efforts to limit medication use may also decrease patient care visits for Medicaid patients (why go to the doctor’s office if you are not willing to make the copay or if you have to wait days for an answer about even getting some prescriptions). Offices with high percentages of Medicaid patients face the growing challenge of patients showing up for appointments at all or on time less an less, a reflection of other impacts on day care, transportation, and Medicaid limitations.

In addition, students may well perceive family medicine and primary care as less viable options, even students who were previously resistant to debt and tuition influences before.

Liability and tuition costs seen as great and growing problems with greater impacts upon lower paid physician specialties. National reports regarding the decline of family medicine and primary care, including questions regarding major overhaul of the specialty and changing the length of training, and the increasing cost of paperwork.

The business and government coalition no longer dictated Major increases in reimbursement for specialists, a virtual separation of many careers from any sort of limitation in income

Health Policy Changes in the 1990s - The Impact of Managed Care, Declines in Reimbursement of Specialists, Increases in Reimbursement for Primary Care, Increasing Support for Rural Hospitals, CHCs, FQHCs

Specific Impacts by Groups of Students

FP Likely is students born in counties of less than 1 million in the US.

FP Unlikely is students born in counties over 1 million or outside of US 50 states.

Instate born is different than actual instate as determined by the variety of state and medical school policies, but there is a +0.82 correlation between the two and the relationships of this group is the same in comparison with instate admissions.

The impact of the managed care era was to distribute physicians effectively by increased choice of primary care, family medicine, and rural family medicine. This impact was greater on the groups of students who were the most numerous, the most urban, and previously the most unlikely to choose family medicine. Older students and those of less origin were more resistant to the health policy changes of the 1990s (see bold above in table). Those born in rural areas also had less change during the 1990s. Both older and rural origin student already choose the right specialties and locations in greater numbers, as do others who share their different socioeconomic backgrounds and lower admissions rates.

Reversal of Fortune, for Primary Care and for the Nation

The combination of increasing reimbursement patterns in areas of most need, new emphasis in medical education regarding the new specialty of family medicine and primary care, and adequate numbers of distributional students in allopathic medical schools greatly enhanced physician distribution.

The nation currently has taken the opposite approach:

1.      Questionable financial viability of low paying physician specialties due to continued declines in reimbursements in comparison to unlimited overhead cost increases from liability/tuition.

2.      Medical education emphasis away from primary care and family medicine

3.      Continued steady declines in admissions of students who will distribute.

4.      National "crisis-oriented" reports and regular media expressions regarding difficulties in family medicine and primary care.

5.      General public preference for costly convenience care rather than continuity care and leadership not willing to educate the public or challenge the long term viability of such an approach.

Workforce References

Family Medicine Central: National Comparisons of Workforce

FP Graduates 1997 - 2003 Summary Tables

Five Periods of Health Policy and Physician Career Choice

Patterns of Migration for FPs

Physician Workforce Studies

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