At the same time, the budget offered an identical $14.6 billion for several discretionary spending programs aimed at increasing the supply of primary care and other in-demand specialties. Graduate medical schools and teaching hospitals would be offered $5.23 billion in grants over the decade to support 13,000 more residency slots in “high-need specialties,” including $100 million in the first year for pediatric training in children's hospitals.
The budget also called for increasing primary-care reimbursement in Medicaid and investing nearly $4 billion in the National Health Services Corps. That money would fund another 15,000 positions—largely in primary care—at the nation's 1,200 federally qualified community health centers. Young physicians who enter the NHSC would either get their tuition loans delayed or waived, depending on the nature of their commitment.
While no one in the administration declared there was a policy agenda linking the two proposals, the identical amounts give away the game. Instead of allowing the high-tuition/high-debt cycle to continue driving two-thirds of medical students into higher-paid specialties, Obama's team at HHS wants to provide financial incentives—whether through tuition relief or by turning more residency slots into a rule-driven grant program—to drive more young physicians into primary care.
While the American Academy of Family Physicians cheered the budget's priorities, the Association of American Medical Colleges warned that cuts in traditional graduate medical education programs, on top of already-mandated hospital reimbursement cuts, would threaten teaching hospitals' ability to maintain their “state-of-the-art” academic setting.
The standard response to the question of how many doctors the U.S. will need as baby boomers age has usually been a simple “more.” The AAMC estimates a shortage of 90,000 physicians—half in primary care and half in specialties—by the end of this decade.
But as Modern Healthcare recently reported (“The myth of the doctor shortage"), alternative delivery system models that emphasize primary care and make better use of physician assistants, nurses and other providers may make those predictions obsolete. Moreover, hospital use that relies on specialists is declining: lengths of stay are dropping; more procedures are shifting to outpatient settings; high-deductible insurance plans are discouraging use; and coordinated care is beginning to take hold.
The future of medicine is tilting away from high-priced specialties and toward primary care. There will always be a need for highly trained surgeons. But as the healthcare system continues to move toward more coordinated care, the physician mix in the U.S.—currently about 2 specialists for every primary- care doctor—should begin to look more like Western Europe and Japan, where the ratio is about 1 to 1.
Of course, there is a more direct way to encourage more young physicians to enter primary care. The CMS, through its annual physician pay rate-setting process, could rebalance reimbursement so primary-care doctors and pediatricians aren't the lowest-paid specialties.
Alas, the American Medical Association and the specialty societies have successfully fought major changes in relative reimbursements. That means any efforts to increase the supply of primary-care doctors must rely on tinkering with the graduate medical education system, which all but guarantees that a significant change in the physician mix will be slow in coming.
Follow Merrill Goozner on Twitter: @MHgoozner