Myth: There's a Physician Shortage in the U.S.


The second in the 10-part series “The 10 Biggest Myths about the U.S. Health System” For others, go to

On February 16, 2018, the Association of American Medical Colleges (AAMC) issued this alert:

“The United States is facing a serious shortage of physicians, largely due to the growth and aging of the population and the impending retirements of older physicians…the United States will face a shortage of between 40,800-104,900 physicians by 2030. There will be shortages in both primary and specialty care, and specialty shortages will be particularly large….These shortages pose a real risk to patients.  Because it takes up to10 years to train a doctor, projected shortages in 2030 need to be addressed now so that patients will have access to the care they need.”

To solve the crisis, the AAMC and others have successfully lobbied lawmakers to increase federal funding for residency slots (the Resident Physician Shortage Reduction Act of 2015) and added incentives for clinicians to practice in underserved communities and specialties.

And some states are taking matters into their own hands. Arkansas, Kansas, Missouri and Utah allow medical graduates who have not completed residencies to practice with provisional status under the supervision of practicing physicians.

The AAMC assessment is based on seven scenario’s that point to shortages. They rightly point out that while the population will grow 12% by 2030, the supply of physicians will increase only 8%. In its report “The Complexities of Physician Supply and Demand: Projections from 2015 to 2030,” they also called attention to other notable trends impacting physician supply-demand:

  • Changing demographics: By 2030, the population 65-plus, which uses physician services most, will increase 55%.
  • Physician retirement: 36% are above 55 years of age and 39% say they expect to retire than they anticipated due to burnout and frustration with the environment in which they must practice.
  • Younger physicians’ work habits: Younger physicians entering medicine work 13% fewer hours than older physicians thus impacting demand for additional physicians.
  • Mid-level providers: The 2000 retail clinics employ nurse practitioners are capable and currently manage 2% of visits that might otherwise be treated seen by primary care physicians. And there are 10 new schools offering degrees for physician assistants and nurse practitioners in anticipated they’ll be able to deliver more services directly to patient.
  • Alternative payment programs and managed utilization: Though acknowledging quantification of these is premature, alternative payment models and managed care might drive physician demand higher as chronic conditions are more effectively managed.

But this analysis makes two assumptions that do not seem plausible:

  • Insurance coverage: It assumes insurance coverage will remain constant in coming years contrary to forecasts showing the elimination of the individual mandate in the Tax Cuts and Jobs Act and new Medicaid work requirements in several states will result in least 6 million losing coverage and lower use of physician services.
  • Accountable care participation: The AAMC report estimates patient enrollment in accountable care will increase from 23.5 million in 2015 to 105 million by 2020, driving increased demand for physician services. But though recent announcements by HHS suggest the performance of ACOs have been disappointing so it’s unlikely enrollment will quadruple in the next 36 months while HHS overhauls the program.

To its credit, the AAMC analysis makes a credible case for the shortage of physicians, but is its dire forecast accurate? A plausible case can be made that it might be overstate the shortage as a result five trends that are changing the role, scope, and demand for physician services:

Increased supply of alternatives to traditional physician services: There are 2000 retail clinics and 7400 urgent care clinics: both are expected to double in the next 5 years. Pharmacists are delivering primary care services alongside over-the counter remedies and prescription drugs in their 56,000 locations. The nation’s 36,400 fitness facilities are increasingly offering alternative health and diagnostic programs to satisfy growing demand from their 57 million members. Insurers are encouraging alternative therapies for such as mindfulness and yoga in lieu of medication and traditional treatments, and employers are operating on-site health clinics to mitigate visits to physicians and hospitals. Most of these are staffed by mid-level professionals equipped with information technologies to assist in diagnosis and treatment coordination. All seek to divert consumers from hospitals, doctors’ offices and emergency rooms through lower costs, convenience and digitally-enabled support services. And the use of complementary and alternative therapies continues to grow: in 2016, half of all Americans used a complementary mode for self-care (i.e. herbal supplements, meditation, acupuncture, massage therapy, chiropractic, yoga and others) spending more than $32 billion, or 10% of total out of pocket costs for healthcare. The numbers of substitutes for traditional physician services is increasing exponentially.

Consumer receptivity to physician alternatives: Consumers are receptive to options that reduce or substitute for services provided by physicians as a result of three issues: trust, costs and ease of access. Consumer confidence in the medical profession has plummeted from 73% in 1966 to 34% last year (Harris Polls). Per Robert Wood Johnson Foundation data, the United States is tied for 24th place in terms of the proportion of adults who agree with the statement, “All things considered, doctors in [your country] can be trusted.” About 6 in 10 U.S. adults (58%) agree with this statement, as compared with more than three fourths in Switzerland (83%), Denmark (79%), the Netherlands (78%), and Britain (76%) Out of pocket costs are a second issue issue: co-pays and deductibles are increasing, fewer are able to afford them, and the prevalence of high deductible health plans and health savings accounts offered by employers is driving consumers to use lower cost options or forego care. And access to physicians is problematic: wait times are long, consumers can’t get control of their own medical records, charges are not explained, physician interaction is limited and service is generally poor. Consumers trust nurses most, then pharmacists and physicians. Not surprisingly, nurses, alternative health providers and virtual care solutions are chipping away at conventional markets served by physicians.

Hospital employment of physicians: Hospitals currently employ 32.8% of physicians (MGMA). They do so for two reasons: to protect referrals (revenues) to their clinical programs and enhance their capabilities in care coordination and population health management. To optimize revenues, hospital-employed groups and large independent medical groups are more receptive to expanded roles for health coaches, nurse educators, nutritionists, therapists, mid-level practitioners and others. “Practicing at the highest level of training” is a contentious issue among physicians if it means their clinical autonomy is threatened or income adversely impacted but receptive otherwise. Thus, hospitals are doubling down on the use of physician assistants and mid-level providers to accommodate increased demand at a lower cost.

Clinical innovations that change how health is defined, delivered and by whom: Machine learning, artificial intelligence, precision medicines and mind-numbing innovations are the future of patient care delivered virtually or on-site. The convergence of physical and mental health, prophylactic dentistry, nutrition, probiotics and mindfulness is the platform for primary and preventive health. Amazon’s Alexa is becoming an alternative to calling a doctors’ office. Proteus’ bio-degradable chip in medications that sends signals to computers about a drug’s metabolism are obviating the need for emergency room staffing to handle visits for adverse drug effects. Self-diagnosis is a megatrend: more than 2 million users have sought insight from 23 and Me, and more than $13 billion has been invested by venture capitalists since 2014 betting digital health will disrupt traditional approaches to care. Clinical innovations are changing how care is delivered and by whom.

Public policies that enable new approaches to health delivery: When compared to the 34 other developed systems of the world in the Organization for Economic Cooperation and Development (OECD), the U.S. health system consumes more of our GDP (17.6%) than any other. Our supply of physicians 784,000, relative to the population is among the lowest falling well below Australia, Sweden, Switzerland, Israel, France, Norway, Spain and others and comparable to the UK. As a result of the Affordable Care Act, attention was paid to expanded access through community centers, a modernized healthcare workforce (Title V) and experimentation with alternative payment models that incentivize clinicians based on value, not volume. But that policy agenda is changing. The new administration is betting that empowerment of consumers aka allowing them to own of their medical records, making data about costs, treatment options and provider performance accessible, and encouraging competition are keys. Signaling plans to revisit alternative payment programs including accountable care organizations from which results have been disappointing, HHS Secretary Alex Azar told the Federal of American Hospitals last week "There is no turning back to an unsustainable system that pays for procedures rather than value…This administration and this president are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they're backed by powerful special interests." The bottom line: the public policies impacting the health industry will accelerate changes that are disruptive to enable lower costs, better care and more direct engagement of consumers.

The confluence of these trends challenges traditional approaches to physician supply and demand and encourages disruptors who bring new approaches unconstrained by convention. The mega-deals recently announced-- CVS-Aetna, Amazon-Berkshire Hathaway-JP Morgan, Apple AC Wellness Clinics, Cigna-Express Scripts and others-- are big bets that the way the future healthcare workforce operates and the roles physicians play is not simply a tweaking of our past. It’s a new day.

Is there a shortage of physicians? Judging from wait times for new patients to get appointments, access to specialists in rural communities, and challenges facing individuals lacking insurance coverage, one might conclude yes.  But conventional ways physician supply-demand is calculated based on population changes, disease prevalence and physician retirement present an incomplete picture.

It’s a myth that there’s a dramatic shortage of physicians unless one believes the future of health---the roles physicians play and the roles consumers play—is only a modest change from our past. The evidence from the marketplace is otherwise.