By Christopher Guadagnino, Ph.D.
While Pennsylvania is in the midst of a continuing political battle for malpractice and patient safety reform, conventional wisdom within the medical community is that surging malpractice insurance costs, coupled with low private insurer reimbursement relative to other states, are causing Pa. physicians to leave the state, retire early or drop risky procedures.
Anecdotal reports of those phenomenon have been plentiful over the past year, as the medical community releases surveys and reports of physician exodus and practice closures, which are in turn countered by data released by Pa. Trial Lawyers Association-supported groups such as the Pennsylvania Citizens for Fairness showing a plentiful supply, and even growth, in the number of Pa. physicians.
Legislators and policymakers are pummeled with lobbying efforts alternatively warning of a physician shortage crisis and debunking the dire warnings of crisis.
The stakes are high. If physician supply and patient access to medical care are not in jeopardy, then the credibility of physicians as a political force will be seriously weakened. On the other hand, if high malpractice costs are significantly eroding the supply of physician services – whether in certain regions or specialties – and patient access to those services is becoming imperiled, then Pa. legislators and policymakers ignore the cry for stronger reforms to avert a looming medical crisis at the peril of all Pennsylvanians.
And yet, there is still no consensus among researchers on two key questions: (1) Is the number of Pa. physicians dropping, whether in the aggregate or by region or specialty? and (2) At what point would that lead to a physician shortage?
Policymakers and analysts appear to be taking seriously the issues and have just begun empirical studies of the first question. Even if those studies produce agreement that there is a significant decline in the number of physicians in Pa., however, there appears to be no standard or agreed upon means to determine whether there is a shortage. And almost unbelievably, no one – not the Rendell Administration or the Pew Charitable Trusts-funded Project on Medical Liability in Pennsylvania – appears to be studying that question.
Are Physician Numbers Dropping in Pa.?
Two ways of measuring decline in physician supply, although not the empirical equivalent of numerical studies, are to track recruitment and retention challenges at hospitals, and changing practice decisions of graduating medical residents.
The American Hospital Association in March released a survey of membership in “crisis states” – a definition based on legal and legislative environment and AMA member experience, and which includes Pa. and 17 other states – about the effect of liability problems on physician recruitment and on finances and operations. Over half of all hospitals in crisis states said that increased professional liability expenses made it more difficult to recruit physicians, 48 percent said they lost physicians or suffered reduced coverage in their emergency departments and 17 percent reported a negative impact on ability to provide obstetric services.
Residency applications to OB/GYN departments in Pa. have declined by roughly 20 percent in the last two years, and are down about 30 to 35 percent in eastern Pa., according to Peter A. Schwartz, M.D., Chair of Reading Hospital’s OB/GYN Department, director of its OB/GYN residency program and representative on the national Council for Resident Education in OB/GYN.
Schwartz adds that the number of residency applications at Reading Hospital’s OB/GYN Department has fallen by over 50 percent over the last five years, as has the number of physicians performing obstetrics in his department, including the chief of OB, and he attributes both declines primarily to liability issues. He also notes that some hospitals have only filled half of their OB/GYN residency slots this year, including Penn State Hershey, Geisinger and Abington.
A reduced pool of residency applicants has resulted in a greater proportion of international medical graduate applicants, who are by no means necessarily inferior to U.S. medical graduates, says Schwartz, but whose level of education is much harder to ascertain, compared to U.S. medical graduates whose education, he says, tends to be much better supervised and organized than other international schools.
“Graduating residents are aware of how bad things are in Pa. and they’re already looking outside – and I’m reinforcing that decision. I think any new graduate would be foolish to think about staying in Pa. at the present time,” says William Crombleholme, M.D., OB/GYN residency director at Magee-Womens Hospital in Pittsburgh, referring to the high cost of liability insurance.
Most of the OB/GYN residents per year who graduate from Magee – five out of nine this year – go into fellowships for advanced training, while only two of the remaining four graduates have chosen to remain in Pa. Those who still choose to stay in Pa. are typically influenced by overriding personal reasons, Crombleholme notes.
The majority of OB/GYN residents from Hospital of University of Pennsylvania already have at least one malpractice lawsuit pending against them when they graduate, and some have multiple lawsuits pending, says Thomas J. Bader, M.D., residency program director of HUP’s department of OB/GYN. “Residents and fellows in this program are acutely aware of malpractice pressures,” he notes. Only one of the program’s six graduates is staying in the state this year; three are going on to subspecialty training and two others are going into private practice in other states.
John Ilagan, M.D., one of HUP’s OB/GYN residency graduates this year, is going into private practice in New Jersey. He says he has been named in two malpractice lawsuits, one of which has already been dismissed as frivolous, and is having difficulty getting liability insurance in New Jersey just for having been named in the suits.
With two months left in his residency, Ilagan already has a taste of the realities of his profession. While doing rotations at Reading Hospital, he recounts a lawsuit that was brought in a laparoscopic case with complications. “The patient lived in Reading. The procedure was done in Reading. But the company that made the laparoscopic equipment is in Philadelphia and the lawsuit was moved there. It’s stories like that that seem out of this world and absurd. It makes me ask, ‘In climates like this, why would I want to practice here?’”
Residents in other specialties are also deciding in greater numbers not to remain in Pa. because of liability issues. Of the 20 or so surgical training program residents per year who rotate in HUP’s trauma center, it used to be common for the majority of them to want to remain in the area if they could find a practice opportunity. Now, despite a fair number of opportunities, 90 percent of them are no longer interested in staying in the state, due to a combination of high liability costs and low reimbursement rates, according to Patrick Reilly, M.D., HUP’s trauma program director and program director for HUP’s surgical critical care fellowship. Until residents see surgeons in the area who are no longer unhappy with their practice environment, says Reilly, their perceptions are not likely to change.
And yet, these local trends do not systematically demonstrate a physician exodus. More empirical studies of Pa.’s physician supply have just begun, and their findings so far are not in agreement as to whether Pa. is losing physicians.
Aggregate data in a report released in June by the Pew Project on Medical Liability in Pennsylvania, Understanding Pennsylvania’s Medical Malpractice Crisis: Facts About Liability Insurance, the Legal System and Health Care in Pennsylvania, showed that in 2000 Pa. had about 10 percent more MDs per population than the nation at large, although the rate of growth of its physician-population ratio has slowed in recent years. The report’s data also noted that 43 percent of MDs in Pa. graduated from in-state medical schools in 1998, compared with a national average of 32 percent.
Those data do not reflect what has happened in recent years and lead author of the study, Randall R. Bovbjerg, J.D., who is principal research associate at the Urban Institute, acknowledges that the study’s broad strokes did not specifically investigate distribution of physicians or access to care within a state.
More recent data suggest that Pa. is losing a significant number of certain specialty physicians. The Pennsylvania Medical Society in June released findings from an analysis of annual tallies of Pa. physician supply between 1985 to 2002. Using data from the U.S. Bureau of Health Professions and the American Medical Association, the study found that the number of general surgeons in Pa. between 1997 and 2002 dropped by 35 percent, falling from 1,622 to 1,058. During the same period, Pa. lost 143 orthopedic surgeons, going from 892 to 749, a 16 percent reduction.
In terms of physician density, the number of Pa. general surgeons per 100,000 population dropped from 13.49 in 1997 to 8.23 in 2002 – the lowest in the 18 years studied. The number of Pa. orthopedic surgeons per 100,000 population dropped from 7.42 in 1997 to 5.83 in 2002 – also the lowest in the 18 years studied.
The study tracked such figures in 14 Pa. metropolitan statistical areas (MSAs) for various specialties and included only actively practicing MDs and DOs involved in patient care in Pa., also factoring out academic physicians and residents, according to Stephen Foreman, Ph.D., J.D., MPA, director of the PMS Health Services Research Institute and the study’s investigator. Using these parameters, he says, the total number of Pa. physicians in 2002 was approximately 28,500, compared with a raw licensure approach, which produced a figure well over 40,000.
Foreman’s time trend analysis shows increases in physician numbers before 1997, then a statistically significant drop-off (beyond chance fluctuation) afterward for the high-risk specialties, including general surgeons, orthopedic surgeons, neurosurgeons and OB/GYNs. Foreman says the raw numerical data cannot identify the drivers of the declines, but do provoke questions, such as to what extent low reimbursement and high liability costs are driving physicians out.
“If you see a big drop, that ought to raise a red flag. If the proportion of OBs per population is inordinately low in Philadelphia compared to other MSAs in the state, that ought to raise a red flag. If you see some areas without specialists at all [Sharon and State College have no neurosurgeons], that ought to raise a red flag,” says Foreman, who argues that it would be poor public policy to ignore raw numerical data that show significant declines in certain specialties and regions.
With the exception of Foreman’s analysis, the debate over whether a physician exodus from Pa. is occurring is currently driven largely by anecdotal information. A Pew Project study expected to be released by the end of June next year, An Empirical Study of the Pennsylvania Malpractice Environment, is attempting to answer that question with more systematic rigor and is the most Pa.-specific research the Pew Project is doing on access effects such as physician supply, according to William M. Sage, M.D., J.D., Columbia Law School professor and principal investigator on the Pew Project.
Part of the study includes a statewide survey of 800 physicians in five specialties – including obstetrics, orthopedics, radiology, emergency medicine and neurosurgery – asking about changes in the quantity and types of practice they have made in the past two years, or plan to make, according to Michelle Mello, J.D., Ph.D., assistant professor of health policy and law at the Harvard School of Public Health and the study’s principal investigator.
The three main phenomena the study is attempting to substantiate are partial and full relocation outside of Pa., early retirement, and restricting scope of practice. To minimize response bias, particularly in a heated political environment, says Mello, the questions require respondents to identify a specific time frame for their practice decisions. The survey also asks “softer” questions about defensive medicine practices and doctor-patient trust, she adds.
Mello hopes to validate the survey findings with data on changes in the number of practicing physicians in Pa. She notes that raw medical licensure data is likely to overcount physician supply because it does not discriminate part- from full-time practice, or Pa.- from multiple state-practice, and she is currently negotiating with the state for access to MCARE data, which is more likely to give an accurate count of physicians actively practicing in Pa. – the only ones who would likely pay into the MCARE Fund – and provides monthly updates, by specialty, with great local specificity.
The study is also surveying over 80 residency programs in six specialties across the state in an attempt to learn about practice decisions of residents completing their training, including whether they plan to remain in Pa., and will compare today’s percentages with those from five years ago, says Mello.
While the studies by Foreman and Mello are designed to track decline in physician numbers, they do not investigate causes. Another Pew Project study is also examining trends in physician supply and demographics – and to a lesser extent supply of certain hospital services – but specifically as a function of liability exposure, says Sage. Led by Stanford Business School Economist Daniel Kessler, J.D., Ph.D., the study is working from national data in an attempt to correlate service supply with tort climate using a system of classifying state-by-state tort climate developed by Kessler and Mark McClellan in a May 1996 article on defensive medicine that was published in the Quarterly Journal of Economics. That study found that malpractice reforms that directly reduce provider liability pressure – which include caps on damage awards, abolition of punitive damages, no mandatory prejudgment interest on damages, and collateral-source rule reform – lead to reductions of five to nine percent in medical expenditures without substantial effects on mortality or medical complications.
Kessler’s current study should be able to say whether states with greater tort exposure tend to have a greater supply of particular medical and hospital services, controlling for other factors, and should also be able to compare Pa. to other states with similar and different tort climates, says Sage.
Another investigation has already found a correlation between tort exposure and physician supply. A study published in early July by the U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality (AHRQ) found that states with caps on noneconomic damage awards or total damage awards in malpractice cases benefit from about 12 percent more physicians per capita than states without such laws. The 20 states with caps had an average of 135 actively practicing, nonfederal physicians for every 100,000 residents in 2000, while the states without caps had an average of 120 such physicians. The finding offers evidence that lack of caps is a deterrence to physician supply growth.
But the findings were compounded by seemingly contradictory data in Pa., showing Pa. as ranking 13th among all states in number of physicians per capita in 2000, with 192 physicians per 100,000 residents and a more than 100 percent growth in number of physicians in the state between 1970 and 2000. The Harrisburg Patriot-News even reported the study under the headline, “State Gains Physicians, Study Says.”
The Pittsburgh Post-Gazette noted that both the rate of growth in Pa. physician supply, as well as the number of doctors per 100,000 county residents in 2000 were higher than the average for states with caps, and quoted the study’s author as saying the Pa. numbers constituted an outlier that didn’t fit with the broader trend found in the study, and also quoted Pennsylvania Medical Society (PMS) criticism that the AHRQ numbers failed to reflect what has happened since 2000.
The AHRQ study did show that around 20 states, half of which do not have caps, saw a growth in physician supply of similar magnitude to Pa.’s, while the study also noted that another variable – proportion of elderly citizens – significantly increases physician density data in a state. Pennsylvania is right behind Florida in highest national proportion of elderly population.
Mixed interpretations such as these illustrate the difficulty of studying influences of malpractice costs on physician supply – and highlight the importance of finding a credible method of such studies.
Mixed interpretation does not bode well for expedited reform, which hinges upon the outcomes and interpretations of these studies. Pa.’s Office of Health Care Reform (OHCR) does not currently have plans to launch any of its own studies of physician supply and shortage, and has not yet taken a position on whether a physician shortage exists or is developing in Pa. The office is monitoring the supply of physicians throughout the state using data from sources including the Pew Project studies, the Pennsylvania Medical Society and Pennsylvania Citizens for Fairness. Says OHCR Director Rosemarie Greco, “The data that we receive comes from outside sources and they are at odds. So we are looking at the data and trying, at best, to determine what pieces are really pieces that we can affirm.”
An implicit acknowledgement of potential a physician exodus is contained in Gov. Ed Rendell’s Plan for Medical Malpractice Liability Reform, released in June, which calls for increased Medicaid disproportionate share funding to trauma centers, full abatement of MCARE premiums for four high-risk specialties and half abatement for all other physicians, and increased Medicaid reimbursement for obstetricians delivering babies.
Is a Physician Shortage Developing in Pa.?
Obtaining an answer to this question in the near term, and policy based upon its answer, is at best a longshot. Policymakers have not yet even reached consensus on whether a physician exodus is occurring in Pa. No study is specifically being conducted on the question of shortage. And even more surprising, no consensus exists on how best to even study the possibility of shortage.
Some indices of shortage do exist and may offer a starting point for analysis – perhaps a small comfort if a physician shortage crisis in Pa. has already begun.
Foreman notes he is not trying to make any absolute conclusions about a shortage of specialty physicians based on absolute numbers. “I’m not sure anybody has claimed that there is a for-real statewide access-to-physician crisis in Pa. There is a crisis in affordability and availability of liability insurance. There are areas that don’t have orthopedic surgeons, general surgeons, or neurosurgeons that are populated enough to justify having them,” he says. These trends, he maintains, may be harbingers of an exodus that will end up producing physician supply problems.
“The concept of ‘shortage’ has popular appeal, but there is no one bright line of shortage or surplus,” says Bovbjerg. The term “shortage” does not have a technically answerable component and is value-driven, requiring definitions of what people in a marketplace want and are willing to pay for, Bovbjerg maintains. The concept, he says, includes whether care meets citizens’ and businesses’ expectations of cost, quality, timeliness and outcomes.
Although data in Bovbjerg’s report suggested that Pa.’s physician supply was high by comparison to other states, the report nevertheless warned that access problems, fueled by greater-than-ever financial pressures on Pa. physicians and hospitals, may already be occurring in rural areas and inner cities, for certain patient subgroups such as Medicaid patients and the uninsured, or in certain medical subspecialties such as obstetrics, orthopedics and neurosurgery.
These problems are still hypotheses. “My hunch is that there is something of a potential access problem in some parts of Pennsylvania for some specialties, but I can’t prove that,” says Bovbjerg, noting that reports of hospitals ceasing to provide trauma and maternity services – in concentrated private insurance markets with relatively low Medicaid reimbursement and high malpractice costs – offer credible grounds for concern.
Another potential warning sign that access to care is being negatively affected is survey data on physicians dropping risky procedures, says Bovbjerg, although respondents to surveys are self-selected and, if fewer physicians are performing the same total number of procedures, higher volume could even lead to higher quality if it does not exceed a certain level, he notes.
Mello says her study, which includes a physician survey validated by a reliable MCARE data set, will not draw rigorous conclusions about whether a physician exodus causes a shortfall, or whether a physician shortfall exists in Pa., but will offer descriptive trends about physician practice decisions, correlated with specialty and geographic region, that may permit inferences about access to care.
Nor will the study attribute causes to its findings, although trends in malpractice claim data from MCARE may shed light on whether an increase in claim frequency and/or severity is correlated with an exodus phenomenon, although the study will not be able to weigh that against other possible contributing factors, says Mello.
While the effect of the malpractice crisis on access to care is a key policy question for the Pew Project, the biggest conceptual problem in measuring access is lack of consensus over benchmarks for what the optimal number of physicians or hospitals is in particular communities, according to Sage.
Numerical benchmarks do exist in the form of several competing sources of industry standards to measure adequacy of physician density. Staff model HMOs, for example, publish physician-to-population ratios for various specialties. For every 100,000 population, Kaiser Portland Staff Model 1992 gives a baseline of 10.8 OB/GYNs, 6.5 general surgeons, 5.5 orthopedic surgeons and 1.3 neurosurgeons. Longshore & Simmons 1995 Base Rate gives a baseline of 10.3 OB/GYNs, 5.7 general surgeons, 4.8 orthopedic surgeons and 0.6 neurosurgeons.
Experts interviewed for this story acknowledged that many such sources of physician workforce benchmarking are available, but noted that there is no agreement upon which is best, similar to the lack of agreement on which benchmarks for quality and best practices are superior to others.
And yet, the physician density benchmarks are being used by some hospitals to guide their physician recruitment strategies. The Susquehanna Health System, which includes Williamsport Hospital, uses the Longshore & Simmons figures as part of its recruitment needs assessment, according to Angela Haas, M.D., the system’s vice president of strategic and business development. By keeping tabs on the retirement plans of the 200 or so physicians in its service area and comparing anticipated changes in physician supply with the benchmarks, Susquehanna Health projects its workforce needs.
The region’s current physician supply shows no serious deficit, says Haas, although the region is currently below physician-to-population benchmark ratios for general surgery, internal medicine, orthopedic surgery, ENT, pediatrics and psychiatry. Factoring in physician retirement plans, an aging population and the health system’s projected needs, Haas anticipates a shortage in five to ten years in primary care, obstetrics, pediatrics and psychiatry, Haas adds. In terms of recruitment efforts, she says, “The key is not to get behind. You’ll never catch up.”
The utility of physician density benchmarks in determining possible shortages is limited in several ways. Those baseline numbers, appropriate for HMOs in certain markets at certain times, may not be appropriate for certain regions or special populations.
Haas notes that low physician density ratios are mitigated by overlap in physician services among specialties. For example, the health system recently lost two OBs because of high malpractice costs, but family practice physicians take care of some of the community’s demand for obstetrical care, as well as pediatric care.
The physician density ratios also do not account for wait times for some medical services in the region, such as colonoscopies, with some gastroenterologists in the region no longer accepting new referrals because of workload, says Haas. Very few primary care physicians in the region are accepting new patients, and Haas says that her own family practice stopped doing so 18 moths ago and averages eight to ten phone calls per day from patients looking for new physicians.
The federal government uses its own benchmarking formula for primary care physician supply in the way it defines health professional shortage areas (HPSAs) and medically underserved areas and populations. Among the criteria used to designate a geographic area as having a shortage of primary medical care professionals are that the area has a population to full-time-equivalent primary care physician ratio of at least 3,500:1, or greater than 3,000:1 with unusually high needs for primary care services or insufficient capacity of existing primary care providers.
According to HPSA program officials, population to primary care physician ratios, by county, were obtained using 1974 Bureau of Census estimates of population and data on the number of non-federal primary care physicians (M.D. and D.O.) active in patient care in 1974. The value of 3,500:1 was chosen to indicate shortage because it is approximately 1.5 times the mean value, and picks out approximately the lowest quarter of the country on a county basis, according to Health Resources and Services Administration spokesperson Steven Merrill. It was assumed than an area with a ratio of 50 percent worse than the national county average would not be proving adequate care, Merrill says, noting that this criterion was implemented in 1978.
Several population factors allow the population-to-physician ratio to be as low as 3,000:1 and still have an area be declared as having a shortage of primary care physicians. These “high needs” criteria include at least one of the following: more than 100 births per year per 1,000 women aged 15 to 44, more than 20 infant deaths per 1,000 live births and more than 20 percent of the population or households having incomes below the poverty level.
More detailed variables are added to the “insufficient capacity” category, with a region having to meet at least two of the following criteria: more than 8,000 office or outpatient visits per year per FTE primary care physician serving the area, unusually long waits for appointments for routine medical services (i.e., more than 7 days for established patients and 14 days for new patients), excessive average waiting time at primary care providers (longer than one hour where patients have appointments or two hours where patients are treated on a first-come, first-served basis), evidence of excessive use of emergency room facilities for routine primary care, a substantial proportion (two-thirds or more) of the area’s physicians not accepting new patients, or abnormally low utilization of health services as indicated by an average of 2.0 or less office visits per year on the part of the area’s population.
Foreman acknowledges the utility of the federal primary care physician shortage criteria, pointing out that a large number of counties in Pa. meet those criteria and several counties are on the edge, where the loss of one physician would put it into the medically underserved category. “Liability and payment issues come into play. Does our physician problem have a rural face to it that is not making news?” Foreman asks.
A meaningful measure of physician shortage must take into consideration physician workload and patient demand, says Foreman. In the coming months, Foreman plans to study the change in Pa.’s OB workload over time to investigate at what point additional workload becomes a problem. By examining every OB in the state over ten years, he plans to look at OBs who are doing twice the number of deliveries as they have in previous years and consult PHC4 data and specialty expertise on what constitutes reasonable workload.
Ideally, a patient perspective is the best way of studying physician shortages, Foreman believes: determine the top 10 or 20 diagnoses in a given specialty, which would comprise the majority of that specialty’s work, and look at the incidence of those conditions in a population to get a benchmark of existing workload. By making assumptions about how many patients the average gastroenterologist can see in a day, one could assess how many GIs are needed to meet the existing demand for GI procedures. If patients are going out of the area for GI care, or if GIs are working 20 hour days, you have a GI shortage.
Another workforce variable of concern is the proportion of employed physicians in a market. The national average is 40 percent, while the Philadelphia region, by Independence Blue Cross figures, is closer to 55 percent, says Foreman. While private OBs may work 12 hour days to pick up the slack of departing colleagues, a market with many employed physicians – who may not be willing to work as many hours – is less elastic in accommodating increased demand, Foreman notes.