America has severe doctor supply and demand issues, but the truth is we actually do have enough doctors. How is this possible? After today’s episode you’ll know how our medical system’s resources are misused and what our country must do to improve long-term medical capacity. The patients who understand this will be able to hold the necessary players accountable to make lasting change.
If the US healthcare system is a chessboard, and providers are the game pieces, America is playing those pieces with just one column and row instead of using the whole space! Several journals, economists, and medical professionals are on the record for saying that in the next 10- to 20-plus years, physician supply will be dangerously low. They’re 100% correct that supply won’t meet demand as we know it, but the reasons are flawed. Alarmists have been complaining about doctor shortages for decades. Physician retirement and burnout can’t fully explain the current forecasted gaps. The physician shortage everyone worries about remains instead a grand misallocation of our resources. Before moving forward, we have to understand the true influences of physician supply, demand, and then how those two elements change based on population-wide trends.
So how many doctors are out there? There are just over one million licensed physicians. According to a census run by the Federation of State Medical boards, the number of doctors grew ~20% from 2010-2020. Most of that growth (+168k physicians) is attributed to new graduates. In the same time frame, the US population rose ~7% to ~330M. It seems that doctors are better than keeping pace, but those headline numbers are misleading. Not all doctors practice the same amount of medicine. Younger millennial doctors seeking work-life balance, late-career doctors, and burned-out providers put in less hours at the clinic. The spread of 2010 to 2020 medical licensees shows the number of doctors aged 60+ grew 48% and those aged 49 and below gained 16%. Are there enough new graduates to replace others getting close to retirement? The number of medical graduates grew ~32% from 2011 to 2021. That percentage sounds nice relative to population growth (~7%), but the absolute 2021 number is small at ~28k grads. The US population is a slow growing mega-fountain while medical graduates/workers are a fast-growing sink faucet. Don’t expect both to balance each other without help. New residents, though climbing, remain a lagging signal since it takes years to produce a new doctor. More data gathered by the Kaiser Family Foundation also show the fact that ~47% of licensed doctors are primary care providers (~496k PCPs) with the remainder being specialists. This breakdown suggests that on average, one primary doctor serves 665 people, and one specialist serves 584 people. This is another numerical trick. The doctor-to-patient ratios appear extreme until you learn that most physicians can handle patient groups in the low-thousands. There’s a critical difference between real capacity and max capacity. If the US population doubled tomorrow, one average PCP would oversee ~1,300 patients and one specialist would take care of ~1,100 patients. These are reasonable expectations. So why do both patients and economists keep worrying about doctor capacity? Part of the answer is that shortage isn’t the same as supply.
Physicians don’t magically pop into clinics, see patients, and then poof away. Reality shows instead that Amazon.com is better at deliver at delivering packages anywhere in two days than we are with having doctors in the right place at the right time. Our doctor supply needs to be realigned instead of rebuilt. As Covid-19 was picking up steam in 2020, Harvard Business Review made some commentary about necessary supply-side changes to help America reach its max healthcare capacity. The authors stress that hyper-urbanized regions have too many doctors chasing relatively concentrated patients, and in turn rural areas have too few doctors for spread-out patients. Most physicians in private and public settings also work primarily during the traditional workweek—some professionals stuff their patients into a few weekdays. Having additional time over weekends or after usual hours gives opportunities for patients to get care when normal time-frames don’t make sense for some demographics. Physicians have to do paperwork as well as see patients, which introduces a brutal time crunch. Having more administrative staff might alleviate some hours for our doctors but the whole cost of the medical system climbs if enough facilities do that. Even if a physician has the availability to see thousands of patients, that doctor can still reject Medicare and Medicaid patients because the payments will be much lower than private insurance. The authors then claim that expanding AI solutions, targeting more patients by tuning availability, and expanding the non-physician workforce (e.g. nurses and physician assistants) can increase each doctor’s patient panel enough to keep up with demand. Of all these suggestions, redefining the available times for when primary care office doctors see patients and embracing technology like AI to clean up administrative hassles (i.e. patient charts, insurance claims) are the most appropriate supply-side adjustments we have to make. Of course, supply has to meet demand somewhere; the bigger story behind America’s doctor shortage is demand itself running way from our control.
US medical care’s true needs are what create the shortage in the first place. The Association of American Medical Colleges, or AAMC, publishes a 25-year forecast of physician supply. In their 2019-2034 review, the authors calculated demand based on demographic changes, incidence of diseases affecting those related demographics, and care delivery setting. We know the elderly are growing in number and need more assistance. Care for those ages 65+ takes up 34% of demand now and is estimated to reach 42% by 2034. On top of that, more people are contracting diabetes and heart issues. Those conditions are manageable, but not straightforward. The current trajectory of US medical needs suggests a shortage of ~38k-124k physicians and ~18k-48k primary care doctors by 2034. Those are massive gaps compared to ~28k expected new medical graduates in 2021, but the AAMC lowered both top ends of those ranges by 12-14% year over year from their last report. Why are these ranges so wide and why is the estimated doctor shortage not as bad as the AAMC thought? The report highlights four major countrywide scenarios improving real medical capacity and reducing shortage forecasts. Two of the outcomes are unrealistic and two are practical. These supply and demand futures as well as the other sources in this pod will be on my post at rushinagalla.substack.com.
The easy fifth scenario is everything just staying the same. If new medical graduate growth rates and population aging continue, then we get the shortfall numbers I mentioned earlier. The first interesting but otherwise impractical change is all covered patients becoming part of an HMO or ACO insurance plan. In this world, medicine, doctors, and money are vertically integrated like how a company may own its whole supply chain. Based on current US healthcare policy, insurance trade groups, and physician organizations, there would be unending political gridlock to reach this outcome. The next demand change scenario is magical thinking at its finest, but is a helpful reference point regardless. The AAMC modeled what may happen if we all decided work on losing weight, cutting glucose, quitting smoking, and reducing cholesterol. Population-wide health improvements are something we can strive for, but we’re human. That utopia is out of most patients’ reach. However, the next two possible futures seem a little more reasonable. Drugstores like CVS and Walgreens are sprouting their own clinics. The proliferation of these retail clinics introduces alternative primary care facilities treating minor but acute issues. It’s efficient for patients to get basic goods, prescriptions, and routine medical exams at the same place. If referrals to specialists are needed, then patients can still get those permissions and move on with their care rather than waiting too long for a traditional clinician’s advice. More registered nurses and physician assistants under strict oversight is another legit overarching trend for plugging the gaps of care doctors can’t easily reach. A combination of these scenarios may help to heal Americans faster and keep us from needing doctors to grow on trees.
Whatever the consensus definition is for the US’s physician shortage, cleaning up healthcare delivery, opportunity, and patient targeting is how supply and demand can rebalance closer to each other. Patients clearly seeing these needs will better handle whatever changes happen next to our medical system. Patients also should know how to judge a doctor’s confidence and empathy as well as skill in treating disease. Can your doctor both heal and connect with you? To answer that question, bedside manner in healthcare is the main theme of the next pod. Stay tuned and subscribe to Friendly Neighborhood Patient for all the medical field primers you need. I’ll catch you at the next episode.
