AMA: Physicians generate $2.3 trillion in economic output
U.S. physicians generated a collective $2.3 trillion in economic activity and nearly 12.6 million jobs in 2015, according to a new American Medical Association report designed to push back against states the group says are creating difficult practice environments.
The AMA's report, released Monday, examined physicians' direct and indirect effects on the economy across the country as well as in their respective states. It looked at total output, jobs, wages and benefits and state and local tax revenue. Every dollar applied to physician services supports an additional $2.84 in other business activity, according to the report.
AMA President Dr. David Barbe said the report, which his organization refreshes periodically, is designed to counteract the significant pressure physicians face in states that are cutting Medicaid reimbursement or changing their professional liability laws.
"While everybody recognizes the value that physicians bring to healthcare as such, access and quality, I don't think many realize how significant the economic impact of physicians on communities is," he said.
In terms of wages and benefits, the report found that the nearly 737,000 physicians studied generated $1 billion as a group, in addition to $93 billion in state and local taxes. The report also broke down the numbers per physician and determined that each physician generated nearly $3.2 million in economic output, 17 jobs, $1.4 million in wages and benefits, and $126,000 in tax revenue.
The AMA also compared physicians' economic impact and wages to that of other industries and found physicians generated greater total output and higher wages than higher education, nursing, community care facilities, legal services and home health industries in all but one state. The only exception was the legal services industry in Washington, D.C.
"This suggests that physicians compensate their employees well, which allows these employees to purchase services from other industries in the state, thereby stimulating their state's economy," the report said.
In Barbe's home state of Missouri, for example, the governor vetoed funding for a medical school expansion that Barbe argues would bring more doctors to the state. He also said Missouri's professional liability laws aren't favorable to physicians, which dissuades them from practicing there, he said.
"In states with good legislation like California and Texas, that increases the number of physicians that go to those states and drives significant additional economic benefit for those states," Barbe said.
The new report cites a previous AMA report that found the number of physicians employed by hospital-owned practices or directly by hospitals remained flat from 2014 to 2016 at 32.8% following a period in which physicians were rapidly joining larger practices.
It makes sense for there to be a cooling-off period, Barbe said, but it's unclear how long that will continue. Doctors feel pressure on multiple fronts to join larger practices, including expenses related to electronic health record adoption, privacy law compliance and conforming to changes in Medicare payment. Meanwhile, he said the cost of running a practice has risen at a faster clip than Medicare reimbursement rates.
"For free-standing practices, that's a pretty difficult equation to make work," Barbe said.
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