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By Martin Osinski

In January NN&I reported on an announcement by the Council on Graduate Medical Education (COGME) that it is predicting a shortage of physicians in the near future. COGME says that by 2015, an increase of 3,000 U.S. medical graduates, a corresponding expansion in the number of resident positions, and a change in the distribution of residency positions to more closely mirror market demand are all needed, By 2020, there could be a shortage of 85,000 physicians, they said.

In a Nov. 3, 2003, article in American Medical News, Carl Getto, MD, Chair of COGME and Senior Vice President for Medical Affairs for the University of Wisconsin Hospitals and Clinics, said the council’s change in perspective was in response to mounting evidence from physician workforce experts and physician recruitment firms. He cites trends such as younger physicians wanting to work fewer hours, an aging population that requires more care, and an increased demand for specialists’ services combined with less restrictive managed care models.

These predictions for the future of health care may be on target, but my experience to date tells a different story. If you were a nephrologist looking for a job today, you would find the market to be tighter than it was five years ago. The numbers of jobs out there are not as plentiful as they seemed to have been in the recent past. Why?

The predicted number of patients with future requirements in nephrology would suggest that we need more physicians. Growth in the number of patients with end-stage renal disease (ESRD) is expected to more than double over the next seven years, and the number of individuals with chronic kidney disease (CKD) has been estimated at over seven million. The number of nephrologists coming out of training programs, although slightly higher than in the past, will not be enough to handle the patient load, especially coupled with retirements and changes in the U.S. government visa policies. The data used in developing the Renal Physicians Association (RPA) position paper on workforce needs in 1995 and the American Society of Nephrology (ASN) workforce study of 1997 have changed very little. Both of these papers created projections for nephrology manpower needs in the U.S. in forthcoming years. The ASN workforce study created different scenarios to arrive at the required nephrology physician population for the year 2010. These projections were based on several assumptions, including nephrologist responsibilities with ESRD patients, non-ESRD patients, the transplant population, organ donation rates, ESRD growth rates, and physician practice options, including ratios of time spent practicing general medicine, nephrology, and teaching. In each case, it was apparent that there were not enough nephrologists coming out of training to keep up with the projected demand. Under some scenarios, the numbers were thousands of nephrologists short.

Nephrologists today are working harder than ever, and the number of patients per nephrologist is increasing (data from the RPA’s 2003 benchmark survey indicate approximately 68 renal patients per physician). If the ESRD population grows as projected and the nephrologist population grows at its current rate, then the patient-to-nephrologist ratio could double within the next few years. How will this increased patient volume be handled, and why are there fewer jobs out there today for nephrologists than there were five years ago?

The answers are complex, so here are some thoughts.

CONTROLLING THE MONEY

First, in a government-controlled payer arrangement, the laws of supply and demand do not hold up. There may be a need, and there may be a short supply of appropriately trained physicians, but there is also a limited dollar pool to pay them. With the 2004 physician payment fee schedule now calling for payment for nephrologists based on physician visits, the physician workforce will stretch even more. Practice groups and hospitals are asking staff to do more with less. The demand on a nephrologist’s time is being increased because the dollars are not there to justify hiring additional help.

WORKING LONGER, HARDER. . . LATER

A number of nephrologists who intended to retire by now are still practicing. Why? In many cases, three numbers can explain it: “4-0-1.” Many physicians saw a large percentage of their 401k-funded retirement plans disappear in the stock market slide of the past few years, The losses were bad enough that it convinced many physicians to stay in practice for a while longer, primarily with the idea of earning some of that money back. For a practice group to hire another physician means splitting the pie with less money for each physician during the initial years. Why bring someone on when you are not looking at working more years? (This is, of course, exclusive of succession planning.)

THE IMPACT OF 9/11

We are in a war today which, for all intents and purposes, began on Sept. 11, 2001. In the 18 months after that attack, over 2.5 million jobs were lost in the United States. We have seen an economy beset with record-setting debt, major U.S. corporations forced into bankruptcy, fraud within Wall Street, mutual fund scandals, and ongoing military action in Iraq. The events of 9/Il and the economic crisis have created uncertainty in the psyche of this country; uncertainty leads to a need to reduce risk when it comes to financial issues. “Let’s not hire that new accountant until we really have to and then some” was the mantra for many corporations, and one would be hard-pressed to make the argument that some of that mentality has not seeped into the thinking of some nephrology practices (even if there have been no direct financial effects).

PAYING DOCTORS

Reimbursement changes have also created some hesitancy. Cuts were projected for Medicare reimbursement for physicians in 2003 and 2004. Although acts of Congress held off the cuts, this uncertainty, combined with the ramifications of new Centers for Medicare & Medicaid Services (CMS) payment policies, creates hesitancy to hire an additional physician for the practice.

THE COST OF PROVIDING CARE

Premiums for malpractice coverage (think crisis) and health insurance are going up. Recent state legislation to cap payouts on lawsuits for pain and suffering are a band-aid for a far deeper problem. Rates are still going up—just not as steeply. Insurance expenses will continue to be a major and growing component of a practice overhead rate in the years to come, which again creates hesitation in bringing on an additional associate.

Other costs besides malpractice premiums involved in running a practice are also continuously rising. Overhead rates increase due to a number of factors with very little in the way of direct controls by the practices; health insurance premiums, staff salaries, supplies, office space, and computer systems all take away from the bottom line. The additional physician time needed to maximize (if not just maintain) the new CMS reimbursement plan and to meet the Health Insurance Portability and Accountability Act requirements also add to the costs of practicing.

Physician extenders appear to be the solution of choice. They can be hired at a lower salary, and practice groups do not have to concern themselves with giving them an equity position in the practice or in future dialysis clinics. They do not need to have a role in practice decision making, and the physician does not have to take on another partner. They can see patients in the dialysis units three out of the four times a month, based on the new CMS payment policy for nephrologists, and the physician can still receive reimbursement for the visits. However, we do not know if CMS will reduce payments in the future if a physician is not the one seeing the patients.

One can learn from the managed care experience of the l980s and early 1990s. Once penetration was deep enough among physicians, the managed care companies made cuts in the reimbursement rates—several times. Physicians had nowhere else to go and had to take what they could get. In addition, depending on the experience and skills of the extender, the bar may be lowering in regard to the quality of patient care.

The challenge then, is if we are going to try to modify systems to improve patient out comes, improve professional job satisfaction, and improve the financial stability and predictability of the practice, in the long term, is it prudent to look for the answer through the utilization of extenders?

So what is the right thing to do? If you delay hiring a nephrologist for your practice and spread the work around, you can make more money. But for how long? You can work harder and see more patients. But for how long? The answer may be in a basic business philosophy: Think long term, not short term. Think about what it is going to take to build your practice—what it took to build it to where it is today. Statistics, as mentioned earlier, indicate that we are not going to have enough nephrologists to handle future needs, and it is not going to get easier to recruit additional physicians in the future.

Originally Published in the March 2004, Nephrology News and Issues, Volume 18, No. 4 pages 33-35