The New Health Dialogue

Are more physicians the answer to our health care woes? That’s the current thinking in many quarters, including a blog last month posted by The Washington Post’s Ezra Klein. He argues that the U.S. is on the cusp of a looming physician shortage, one that keeps medical costs high and access low.

Klein is hardly the first person to make this argument, and common sense would seem to support it. By following the basic logic of supply and demand, upping the ‘supply’ of docs will decrease the market price of their services, right? But this assumption misses the fact that our current, fee-for-service mechanism of health care financing doesn't allow the market to work that way. For one thing, doctors' fees are set, well, by doctors themselves. What's more, doctors get paid more to deliver more services, and doctors are the ones who decide, for the most part, which services their patients need. Increasing the number of doctors, especially the number of specialists, will drive costs even higher, because the more doctors there are, the more services they will deliver. Most importantly, many of these extra services won’t offer better health or longevity for patients.

Klein cites a New York Times article which warns of a "90,000 doctor shortage by 2020.” Where do these estimates come from? They’re based on projections for population growth and aging. As the population expands and gets older, we’ll need more doctors. But that assumes that the number of doctors we have now is the right number.

The call for more doctors doesn't consider that the ratio of doctors to patients varies wildly in different parts of the country. Many places have more doctors than they need, while some may not have enough, especially enough primary care doctors. Some places have four times as many doctors per patient compared to others. Boston, for example, is awash in physicians – not surprisingly, given the number of medical schools located there. Increasing the total physician supply would not necessarily mean that the places that need them would get them. Meanwhile, places that don’t need them would get even more.

We can't improve the quality of our health care or patient satisfaction by simply adding more physicians to the system. Many policy makers assume that having too few physicians impedes access to health care, yet Dartmouth data show the paradoxical result that Medicare beneficiaries living in regions with more physicians don’t report higher satisfaction or easier access to health care than those living in places where the supply is lower. Doc-heavy regions are also more likely to report less effective communication between physicians and lots of discontinuity in care delivery. But here’s the real kicker - patient outcomes in the highest supply regions are no better than those in the lowest supply regions.

If health outcomes aren’t improved by greater numbers of physicians, it’s hard to see how even more docs would improve the entire system. While economists might argue that rising health care costs are the consequence of restricting the number of new physicians, they should consider that current costs are driven up by our existing physicians delivering unnecessary care to patients.  Significantly increasing the ranks of practicing physicians will likely worsen the very problem that Klein and others want to solve by throwing more doctors at it.

Why do physicians deliver more care, even if it may not be what patients need or desire? You need to look no further than the health system itself. The health care market isn’t like other markets. Tracing health care payment trails is about as easy as finding water in a desert. Between the patient, the physician, third party providers and insurance companies, the price of the services we receive (and who ends up paying) is anything but transparent. The only clear relationship in the whole mess is that physicians are paid more to do more. Blaming our health system woes on “too few doctors” is a misjudgment of the target. And if your aim is off, you’re sure to miss the mark.