| | A Look at U.S. Physician Supply and Demand Trends - Continued
The rising demand for medical specialists is clearly illustrated by the changing nature of the search assignments Merritt, Hawkins & Associates has conducted in the last five years. In 1996, approximately 75 percent of the searches the firm conducted were for primary care physicians (family practitioners, internal medicine practitioners, pediatricians). By contrast, in 2001, over 75 percent of the 2,000+ physician searches the firm conducted were for medical specialists such as radiologists, cardiologists, and orthopedic surgeons.
Economic Factors:
Demand for health services also is driven by the economic ability of patients to pay for such services. That ability was more extensive than ever during the economic boom of the 1990s and helped to undermine the managed care "gatekeeper" system in which access to medical specialists was restricted. A highly employed and prosperous workforce wanted and demanded more direct access to specialty services and would not accept the restrictions of the gatekeeper system.
Direct access to specialists through PPOs, as opposed to restrictive HMOs, is now much more common. Though the economy currently is stagnant, its historical resilience suggests that millions of consumers will continue to have the ability to pay for specialty care in the future. In fact, average annual per person visits to physicians has consistently increased in recent years, according to the National Ambulatory Health Care Administration, from 1.7 visits per person per year in 1997 to 2.5 visits a year in 2001 for all population groups.
Medical Innovations:
Technological innovation is further enhancing demand for medical services. Breakthroughs in drug therapy, diagnostic testing, and surgery are practically daily occurrences. In particular, treatment advances increase the need for specialists to administer new diagnostic and surgical procedures, including a wide range of non-invasive procedures and advanced imaging techniques. Patients have historically demanded the latest medical innovations and are willing to pay for any procedure or diagnostic device that they believe will enhance their well being.
Government Policy:
The government also plays a role in physician demand. Despite the election of a Republican administration, no efforts are underway to dismantle Medicare and other social programs that offer different segments access to health care. In fact, both political parties favor creating additional access to drug therapies for senior citizens and expanding health benefits to children. However, the current administration is seeking ways to limit spending and has targeted Medicare dollars spent on physician training for cuts, based on the erroneous assumption that the U.S. has a sufficient supply of physicians.
Disease Incidence:
While medical treatments advance, the general population still faces many health problems, from heart disease and cancer, to AIDS and alcoholism, to the new threats posed by terrorism. Moreover, the success organized medicine has achieved in some ways increases the demand for medical services. Cancer and heart patients are living longer but require treatment as they recover from illnesses and seek to maintain their health.
Physician Maldistribution:
While the shortage of physicians is national in scope (with exceptions for certain high physician density markets), the demand for physicians in rural areas has traditionally been strong and that demand continues to exist. Fifty-one million people (about one-fifth of the population) live in "non-metropolitan" areas, according to the U.S. Census Bureau. Of these, some two fifths, or 20 million people, live in federally designated Health Professional Shortage Areas (HPSAs), the total number of which increases every year. While 20 percent of the population lives in non-metropolitan areas, only 11 percent of physicians practice in such areas. Physician shortages in rural areas have been endemic for many years and this can be expected to continue.
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