Doctor shortage and federal policy

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By Merilee Dannemann

Why is there such a serious shortage of doctors in New Mexico?
A bit of good news: The basic cause is not anything inherently wrong with New Mexico. It’s tied up in the complications of medical regulations and funding.
A group of speakers from New Mexico Health Resources Inc. recently described the background of this situation and what they are doing about it. NMHR is a nonprofit dedicated to recruiting and retaining physicians in New Mexico, especially underserved areas. The speakers were Jerry Richardson, executive director; Kevin McMullan, health professional recruiter; and Dr. Frank Hesse, a founder and former board member of NMHR who is also former chair of the now-moribund New Mexico Health Policy Commission.
The undersupply of doctors nationwide, they said, traces to a federal commission called the Council on Graduate Medical Education. This commission was founded in the 1930s, when the nation had an oversupply of doctors. A quota was established for the number of medical residents. Today, the training of medical residents is largely subsidized by Medicare. The quota sets the number of residents in each teaching hospital that Medicare will support. It also sets the allocation among specialties.
It’s possible for a teaching hospital to add more residents if another source of funding, such as state government, can be found. Though the outcome won’t be known until the governor signs the budget bill, possible funding for a few slots was a line item in the budget this year.
Nationally, the shortage of physicians is expected to be more than 91,000 by 2020 — partly, but not entirely due to the Affordable Care Act, which promises access to health care to millions more Americans. In New Mexico, the shortage is estimated at 2,000 physicians, of which 400 to 600 are primary care physicians.
Doctors have a significant financial incentive to become specialists rather than primary care physicians: specialists earn more than double what primary care doctors earn. Nationally, orthopedic surgeons are at the top, earning more than $400,000 annually, with cardiologists close behind; primary care doctors are at $175,000.
Medical students graduate with a debt averaging $170,000, adding pressure to the incentive to choose a high-paying specialty. According to Hesse, social factors add to the pressure: There’s more prestige attached to those high-paying specialties.
Doctors get paid more in some states than others, also largely because of federal policy. Medicare sets physician reimbursement rates based on a cost-of-living formula, and New Mexico rates are low. Insurance rates are often based on Medicare’s rates. This is another reason for doctors to locate somewhere else.
Various financial incentive programs exist to help doctors who practice in underserved areas. NMHR tries to match the programs with doctors who express interest. But nobody thinks those programs will be enough, if New Mexico is competing for a limited number of doctors.
Among the solutions recommended by NMHR: Congress should get rid of the cap on the subsidy for medical residents.
I would call that a screaming emergency. It is outrageous that, with a nationally recognized and widely publicized need for more doctors, federal policy would create an artificial limit. Opening the doors to the medical schools might be expensive in the short run, but it will save billions in the long run. The policy wonks at the Congressional Budget Office can figure out how much.
This talk was just about doctors, with a focus on primary care. There was only brief mention of other aspects of the state’s health care needs — mid-level practitioners, alternative care, distance medicine, dental care and the great need for some New Mexicans to take better care of themselves.