The Physician Shortage-Projections, Causes, and Solutions W…

Healthcare Technology Trends in 2024: Enabling Patient Care at Home The Physician Shortage: Projections, Causes, and Solutions

The Physician Shortage: Projections, Causes, and Solutions

Introduction AMN Healthcare, the nation’s leading healthcare workforce solutions company, produces a wide range of thought leadership resources on various healthcare workforce related topics. These resources include surveys, reports, podcasts, speaking presentations and white papers. In this white paper, AMN Healthcare’s Physician Solutions division (formerly known as Merritt Hawkins) examines physician supply and demand projections, the factors driving the physician shortage, and potential solutions to this critical workforce challenge. Physician Shortage Projections/AAMC There are various sources that assess physician supply and demand trends and project future physician workforce needs. Key among them is a widely referenced report issued periodically by the Association of American Medical Colleges (AAMC). In its 2021 report, the AAMC forecast a shortage of up to 124,000 physicians by 2034, including approximately 47,000 too few primary care physicians and an even greater shortage of approximately 77,000 specialists.

The AAMC’s 2024 report downgraded this forecast to a projected shortage of 86,000 physicians by 2036 (The Complexities of Physician Supply and Demand: Projections From 2021 to 2036. AAMC. April 2024).

However, the report cautions that the reduced shortage numbers are based on “the hypothetical future growth in the number of medical residency positions nationwide.” Should this growth not materialize, the forecasted shortages could be significantly more severe. The AAMC report further notes that “if communities underserved by the nation’s health care system could obtain care at the same rate as populations with better access to care, the nation would need approximately 202,800 more physicians as of 2021 .” In effect, the AAMC suggests that it is only the low rate at which residents of economically challenged or isolated communities are able to access physician services that keeps the physician shortage from being exponentially worse. In a national address last year, American Medical Association (AMA) president Jesse M. Ehrenfeld, M.D. echoed this assessment, stating, “The physician shortage that we have long feared – and warned was on the horizon – is already here. It’s an urgent crisis.” (AMA President Sounds Alarm on National Physician Shortage. AMA News, October 25, 2023)

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The Physician Shortage: Projections, Causes, and Solutions

Physician Shortage Projections/HRSA

The Health Resources and Services Administration (HRSA) is another source that is widely referenced in regard to physician supply and demand projections.

HRSA’s November 2023 report: Physician Workforce: Projections, 2020-2035 offers additional metrics quantifying projected physician shortages by specialty over the next decade.

Nationally, across all specialties, HRSA projects a shortage of 57,259 full-time equivalent (FTE) physicians by 2025, with FTE physicians defined as those working 40 hours or more per week: It projects a shortage of 81,180 physicians by 2035 (see below):

Projected Physician Shortages

2025

2030

2035

SUPPLY

909,720

940,690

982,640

DEMAND

966,970

1,019,770

1,063,820

SHORTAGE

(57,259)

(79,080)

(81,180)

Source: Physician Workforce Projections, 2020-2035. HRSA. November 2023.

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The Physician Shortage: Projections, Causes, and Solutions

HRSA projects physician shortages in 26 of the 36 medical specialties included in its 2023 report.

Below are projected physician deficits by 2035 for various specialties:

SPECIALITY

DEFICIT

Allergy & Immunology

10%

Ophthalmology

30%

Anesthesiology

Orthopedic Surgery

Cardiology

17%

Otolaryngology

Critical Care Medicine

12%

Pathology

15%

Family Medicine

10%

Plastic Surgery

25%

General Internal Medicine

17%

Radiation Oncology

Geriatrics

12%

Radiology

11%

Hospital Medicine

10%

Thoracic Surgery

31%

Infectious Diseases

Urology

17%

Nephrology

21%

Vascular Surgery

16%

Neurological Surgery

11%

Other Specialists

29%

Obstetrics & Gynecology

11%

Source: Physician Workforce Projections, 2020-2035. HRSA. November 2023.

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The Physician Shortage: Projections, Causes, and Solutions

Factors Driving the Physician Shortage: The “Seven P’s”

A variety of longstanding factors are driving the physician shortage. AMN Healthcare refers to these factors as the “Seven P’s.” They include:

1. Population growth: The U.S. population is projected to grow from 332 million people today to 423 million by 2050, according to the U.S. Census Bureau. In the next 25 years, the U.S. will add to the ranks of its citizens the equivalent of the current population of Germany. 2. Population aging: By 2036, the U.S. population is projected to grow by 8.4%, while the population aged 65 and older is projected to grow by 34.1%, according to the AAMC. The population 75 and older is projected to grow by 54.7%. People 65 and older visit physicians at three times the rate of younger people and account for a disproportionally large number of tests and procedures, according to data from the Centers for Disease Control and Prevention (see charts below).

In-Patient Procedures by Age Group

Number of Diagnostic Treatments Tests by Age Group

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

under 15 16-44 45-64 65+ 65+ U.S. Population

Source: Centers for Disease Control and Prevention

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The Physician Shortage: Projections, Causes, and Solutions

As the charts show, seniors represent only 14% of the population but generate 34% of inpatient services and 37.4% of diagnostic treatments and tests. Seniors typically are covered by Medicare, and therefore often have the ability to access medical services.

Growth of the senior population, and the correspondingly higher utilization of healthcare services this will create, is the single most significant trend driving the physician shortage.

3. Provider aging: More than 30% of physicians in active patient care are 60 years old or older, according to the AMA, while 20% are 65 or older, creating a looming “retirement cliff” in the physician workforce.

Specialist physicians are, in general, older on average than are primary care physicians, as the numbers below indicate, and they will be retiring in proportionately higher numbers.

Percent of Physicians 55 or Older

Specialities

Pulmonology

73%

Ophthalmology

48%

Psychiatry

60%

General Surgery

11%

Cardiology (Non-Inv.)

54%

Gastroenterology

45%

Orthopedic Surgery

52%

Anesthesiology

44%

Urology

48%

Percent of Physicians 55 or Older

Primary Care

Internal Medicine

40%

Family Practice

38%

Pediatrics

38%

Source: AMA Physician Master File

Older patients are dependent on specialists to treat declining hearts, lungs, and other organs, and it is specialty physicians who are likely to be in particularly short supply in coming years.

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The Physician Shortage: Projections, Causes, and Solutions

4. Provider burnout and turnover: Burnout among physicians was labeled a public health crisis by the Harvard H.T. Chan School of Public Health prior to COVID-19. Physician burnout, turnover and vacancies were further driven by the pandemic. According to a McKinsey & Company study, approximately 35% of physicians indicate they are likely to leave their current roles in the next five years, of which approximately 60% say they are likely to leave clinical practice entirely. This exodus will not be confined to physicians of retirement age. Of those surveyed who say they are likely to leave, 59% of those 54 to 64 indicate that early retirement or leaving care delivery is their most likely next step. ( The Physician Shortage Isn’t Going Anywhere. McKinsey & Company, Sept 10, 2024) Turnover already is a primary reason why hospitals, medical groups and other healthcare facilities are recruiting physicians. According to the Association for Advancing Physician and Provider Recruitment’s (AAPPR) 2023 Benchmarking Report, 44% of physician searches conducted in 2022 were to replace physicians who had left their place of employment. 5. Pervasive ill-health: Six in 10 U.S. adults have a chronic medical condition such as diabetes or lung disease, while 4 in 10 have two or more, according to the CDC. The widespread incidence of poor health in adult and pediatric populations continues to drive demand for both primary care physicians, who often manage the care of patients with multiple chronic conditions, and specialists, who treat patients with specific chronic and acute maladies.

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The Physician Shortage: Projections, Causes, and Solutions

6. Pipeline problems: Federal funding for physician training was capped in 1997 and has been limited since, restricting the number of new physicians entering the workforce. Though the number of medical residents completing their training each year has increased moderately over the last decade, the supply of new physicians is not keeping up with demand.

As a result, the AAMC supports passage of the Resident Physician Shortage Reduction Act, bipartisan legislation that would increase the number of Medicare-funded residency positions by 14,000 over seven years.

7. Practice styles: Physicians today are less likely to practice in traditional, office-based, physician-owned, full-time practices than they were in the past. About three-quarters of physicians now are employed by a hospital, medical group, or other entity, rather than being independent practice owners. Employed physicians often work fixed hours or shifts with set vacation times, rather than the extended hours typical of “old school” private practice physicians. In addition, many physicians are embracing practice styles such as part-time, locum tenens, telemedicine and non-clinical administrative roles that reduce the overall number physician full-time-equivalents (FTEs) in clinical care. Newly trained physicians entering the workforce therefore may not fully replace old school physicians leaving it in terms of FTEs.

Today, how physicians practice -- not how many there are -- is an increasingly important factor driving physician shortages.

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The Physician Shortage: Projections, Causes, and Solutions

A Continued Maldistribution

When it comes to physician supply, not all areas of the country are equal.

In addition to an emerging physician shortage, there is a long-standing maldistribution of physicians in the United States, with fewer doctors practicing in rural and inner-city areas than in other areas.

There are now more than 7,700 Health Care Professional Shortage Areas (HPSAs) for primary care in the United States, about double the number identified by HRSA 15 years ago ( HRSA: Designated HPSA Statistics ). These are areas with less than one primary care physician per 3,500 people (or less than one primary care physician per 3000 people in designated “high need” areas). Approximately 76 million Americans live in these primary care shortage areas, where only 44% of primary care needs are being met. It would require 13,254 additional primary care providers to end the shortage designations, according to HRSA. Approximately 67% of primary care HPSAs are in rural area, with the remainder mostly located in economically challenged urban areas. There are now over 6,100 HPSAs for mental health nationwide, in which 122 million people live. Mental health HPSAs are defined as areas where the population to provider ratio is 30,000 or more to 1 (20,000 to 1 if there are unusually high needs in the community).

HRSA indicates it would take 6,167 mental health providers to remove the HPSA designations.

Primary Care HPSAs

Mental Health HPSAs

Total HPSAs

7,710

Total HPSAs

6,406

Population

76 million

Population

122 million

Providers needed

13,254

Providers needed

6,167

Source: https://data.hrsa.gov/topics/health-workforce/shortage-areas

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The Physician Shortage: Projections, Causes, and Solutions

Physicians Per Population by State The ratio of physicians in active patient care-per-population for the entire United States now stands at 286 per 100,000, according to the AAMC. Below are the five states with the most physicians per capita and the five states with the fewest physicians per capital:

Physicians Per 100,000 Population by Select States

1. Massachusetts

466

46. Arkansas

215

2. Maryland

393

47. Wyoming

211

3. New York

389

48. Oklahoma

209

4. Vermont

386

49. Mississippi

196.8

5. Rhode Island

383

50. Idaho

196.1

Source: Association of American Medical Colleges (AAMC) 2022 State Physician Workforce Data Book

The maldistribution of physicians, particularly in rural areas, is a challenge that is very difficult to address, for a number of reasons. Primary among them is the lack of professional opportunities for physician spouses in many rural areas. Others include professional isolation and a dearth of cultural amenities.

In AMN Healthcare’s 2023 Survey of Final-Year Medical Residents , only 2% of new physicians coming out of training expressed a desire to practice in a community of 10,000 or fewer people.

Based on population size, in which type of community would you like to practice?

10,000 or less

100,001 – 250,000

17%

10,001 – 25,000

250,001 – 500,000

24%

25,001 – 50,000

500,001 – 1 million

16%

50,001 – 100,000

11%

Over 1 million

22%

Source: 2023 Survey of Final-Year Medical Residents. AMN Healthcare.

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The Physician Shortage: Projections, Causes, and Solutions

The Role of Nurse Practitioners and Physician Assistants

The rural physician shortage is only prevented from being a full-blown health crisis by the growing contributions of nurse practitioners (NPs) and physician assistants (PAs).

A 2022 study noted that NPs represent more than 25% of primary care providers in rural areas, up 17.6% since 2008. The percentage is higher in those 26 states allowing NPs Full Practice Authority (FPA). By contrast, the percentage of physicians practicing in rural areas declined by 12.8% over the same period (5 Key Healthcare Trends Affecting Nurse Practitioners in 2023. HealthLeaders. Feb. 6, 2023) . In addition, NPs are taking a larger role in addressing demand for urgently needed mental health services. Close to 100 new psychiatric NP programs have been added to U.S. schools of nursing in the past 10 years, producing more than 13,000 new providers, according to the American Association of Colleges of Nursing’s Enrollment and Graduation Reports 2012-2022. The number of NPs treating Medicare beneficiaries for psychiatric and mental health conditions grew 162% from 2011 to 2019, compared to a 6% decrease in the number of psychiatrists treating Medicare patients (5 Key Healthcare Trends Affecting Nurse Practitioners in 2023. HealthLeaders. Feb. 6, 2023) . Without the growing contributions of NPs, the shortage of mental health professionals would be even more pronounced. Both NPs and PAs are helping to supplement the physician workforce in multiple settings nationwide, including the rapidly growing number of “convenient care” venues, such as urgent care centers, retail clinics and telehealth platforms. Without them, the physician shortage would be considerably more severe.

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The Physician Shortage: Projections, Causes, and Solutions

Unprecedented Demand for Physicians The surging demand for physicians is underscored by AMN Healthcare’s Survey of Final-Year Medical Residents, which asks graduating medical residents to indicate the number of times they were contacted by recruiters about job opportunities during their training (see chart below):

About how many times during the course of your residency have you been solicited about medical practice job opportunities by hospitals, medical groups or other employers?

3% 0 - 10

5% 11 - 25

14% 51 - 100

22% 34 - 44

56% Over 100

Source: Survey of Final-Year Medical Residents. AMN Healthcare. 2023.

The majority of residents responding to the survey (56%) indicated they had been contacted over 100 times by recruiters about job opportunities during their training. This is the highest percent of final-year residents indicating they had received 100 or more job solicitations since AMN Healthcare/Merritt Hawkins first conducted the survey in 1991.

Given current market supply and demand dynamics, the challenge for newly trained physicians today is not finding a job opportunity, but choosing the right opportunity from a range of offers.

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The Physician Shortage: Projections, Causes, and Solutions

Longer Patient Wait Times

The physician shortage is felt by patients in a variety of ways, including longer wait times to schedule a physician appointment.

AMN Healthcare tracks physician appointment wait times through our Survey of Physician Appointment Wait Times and Medicare and Medicaid Acceptance Rates, which was first conducted in 2004. The survey examines appointment wait times for five different medical specialties in 15 major metro areas, where the ratio of physicians-per-population is relatively high compared to mid-sized or small communities. The average wait time to schedule a physician appointment is 26 days, according to the 2022 version of the survey (the most recent available), up from 20.9 days in 2004, a 25% increase. Wait times vary by specialty and metro area (see below):

Average Physician Appointment Wait Times By Specialty in 15 Metro Areas/Longest and Shortest Average Wait Times By Metro Area

Average Appointment Wait Time

Specialty

Obstetrics/Gynecology

31.4 days

Orthopedic surgery

20.6 days

Philadelphia

59 days

San Diego

55 days

New York

19 days

Washington, D.C.

5 days

Dermatology

34.5 days

Family Medicine

20.6 days

Minneapolis

72 days

Portland

44 days

Philadelphia

9 days

Washington, D.C.

8 days

Cardiology

26.6 days

Portland

49 days

Source: Survey of Physician Appointment Wait Times and Medicare and Medicaid Acceptance Rates. AMN Healthcare. 2022.

Dallas

13 days

As the survey indicates, wait times to see a physician can be protracted even in metro areas that have some of the highest ratios of physicians per population in the U.S.

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The Physician Shortage: Projections, Causes, and Solutions

Impact on Quality of Care

The physician shortage also is felt by patients due to its negative effect on quality of care.

Timely access to care is 1 of the 6 dimensions of health care quality identified by the Institute of Medicine's report, Crossing the Quality Chasm (Institute of Medicine. Washington, DC: National Academies Press; 2001. Crossing the Quality Chasm: A New Health System for the 21st Century ). The Agency for Healthcare Research and Quality cites improvements in morbidity, mortality, and cost savings as benefits of timeliness of care (National Health Care Quality Report. 2004. [June 26, 2005]. at: http://www.qualitytools.ahrq.gov/qualityre- port/browse/browse.aspx?id=5077)

The shortage of physicians can cause patients to grow discouraged and put off needed diagnostic tests and exams until their conditions become acute. In some cases, patient care delayed can be patient care denied.

Potential Solutions

There are a variety of steps which, taken in concert, could alleviate the physician shortage. These include:

Increased funding for physician Graduate Medical Education (GME). Federal funding for physician residency training is provided through the Centers for Medicare and Medicaid Services (CMS) at hospitals and other healthcare facilities nationwide. As was referenced above, that funding was capped by Congress in 1997, with only one limited increase since. Without additional federal funding, the supply of new physicians is unlikely to keep pace with demand.

Legislation has been submitted to Congress over the last several years to increase federal funding of physician GME, but so far it has failed to gain traction.

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The Physician Shortage: Projections, Causes, and Solutions

Reduced barriers to entry for International Medical Graduates. The U.S. physician workforce is supplemented by physicians who completed their medical education abroad. About one-quarter of physicians in active patient care in the U.S. today are International Medical Graduates (IMGs). Without the presence of IMGs, who often practice in rural areas for visa related reasons, the physician shortage would be considerably more acute.

IMGs must complete a U.S. residency training program to obtain a license to practice in the U.S., a requirement that greatly limits their availability.

Some states are taking steps to eliminate this requirement. Tennessee passed a law that became effective in July 2024 (though it has not yet been implemented) that will make it the first state to allow IMGs to practice in the U.S. without having to complete a U.S.-based residency.

An Illinois law to take effect on January 1, 2025 would allow IMGs without a U.S. residency to practice in the state provided they work in an underserved area. Florida, Virginia, Idaho and Wisconsin are considering similar legislation.

Eliminating the U.S. residency requirement for IMGs is a dramatic step that clearly underscores the urgent need for physicians, particularly in rural areas, and which has the potential to significantly increase physician supply.

Appropriate use of providers. Efficiency gains can be realized through the appropriate use of the various providers on the patient care team. The goal is for each provider to practice to the top of his or her training. In this workforce management model, physicians focus on the most complex problems they are trained to address, while leaving less complex duties such as surgical prep or patient education and follow-up to NPs or PAs. Nurses also focus on patient care and leave other duties, such as stocking supplies or moving patients, to others on the team. In this way, the number of FTEs devoted to actual patient care is expanded.

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The Physician Shortage: Projections, Causes, and Solutions

Continued use of locum tenens physicians. “Locum tenens” refers to physicians who work on temporary assignments that may last from one day up to one year, usually substituting for physicians who are on vacation or who are otherwise absent, or filling in until permanent physicians can be recruited. AMN Healthcare estimates that over 52,000 physicians work on a locum tenens basis each year. Many physicians who work as locum tenens are older and are at the end stage of their careers. Without the option of locum tenens, they may otherwise have retired. Others are younger physicians who are seeking an alternative to traditional practice and could leave medicine if they do not find one. The use of locum tenens physicians may prolong the careers of both older and younger physicians and contribute to overall physician FTEs. Enhanced physician working conditions. As was referenced above, physician burnout and turnover are significant contributors to the physician shortage. Many physicians today are dissatisfied with their practice environments, which often are characterized by excessive bureaucratic and documentation duties, lack of clinical autonomy, and problematic reimbursement models. Measures that improve the medical practice environment are likely to keep physicians more engaged, reduce burnout, and prolong their careers, thereby enhancing overall physician FTEs. These measures include reduction of documentation/data entry requirements, enhanced clinical autonomy, and clear and fair compensation formulas. The key is to maximize the time physicians have for patient care and minimize other duties and distractions that lead to burnout and exits from the field.

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The Physician Shortage: Projections, Causes, and Solutions

Conclusion The factors driving the physician shortage, including aging population and provider demographics, as well as pervasive population ill-health, are long-standing and are likely to persist. Because the time needed to educate and train physicians is lengthy (often 12 years or more of collegiate and post-collegiate training) increasing the supply of new physicians will take time, even if additional funding to do so is made available. Focus should therefore be placed on what can be done to increase the supply of physicians in the short-term, including enhanced workforce management models and improved working conditions for physicians that con- tribute to physician retention.

For additional information about AMN Healthcare Physician Solutions’ services and thought leadership resources, contact:

physiciansolutions@amnhealthcare.com

AMNHealthcare.com

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