Experts suggest changing Medicare’s payment structure to encourage physicians to pursue primary care specialties.
In less than 20 years, adults over the age of 65 will outnumber the population of children under 18 for the first time in U.S. history. Will the nation have enough physicians at that time to care for its aging population?
The number of primary care physicians is not expanding to meet the demands of a growing elderly population. In the next decade, projections suggest that there will be a shortage of up to approximately 49,000 primary care physicians.
To prevent a shortage in primary care specialties, scholars recommend changing Medicare’s payment regulations to improve primary care physicians’ compensation. Increasing Medicare compensation would encourage new doctors to enter primary care specialties like family medicine, internal medicine, or pediatrics, according to a recent report by Bruce Steinwald, Paul Ginsburg, Caitlin Brandt, Sobin Lee, and Kavita Patel.
Steinwald and his coauthors explain that Medicare plays an important role in compensating physicians. The program’s regulations create a payment system to determine the maximum fees that Medicare will pay for medical services and procedures.
The current payment scheme–which is known as a physician fee schedule–increases the income gap between specialties, Steinwald and his coauthors argue. Medicare pays higher fees for procedures performed by specialists than for patient evaluations conducted by primary care physicians.
Primary care physicians are further disadvantaged because private payers tend to use Medicare’s fee schedule to determine compensation for services, note Steinwald and his coauthors.
Young physicians deciding whether to enter a primary care specialty are aware of this income gap. Steinwald and his coauthors reference a report estimating that the number of physicians who would select primary care specialties would increase by at least 1 percent if the income gap between specialties could be reduced by 1 percent. The results indicate that future earning potential is an important factor for physicians selecting specialties, say Steinwald and his coauthors.
To address the income difference and encourage more physicians to enter primary care specialties, Steinwald and his coauthors propose changing Medicare’s physician fee schedule.
They support the Medicare Payment Advisory Commission’s recommendation to modify Medicare’s fee structure to provide greater compensation for evaluations and routine office visits.
But to ensure that this policy would not increase Medicare’s overall spending, Steinwald and his coauthors say that Medicare should reduce the fee schedule for other tests and services that primary care physicians do not provide.
By increasing the compensation for services that primary care specialists perform and by reducing payments for other procedures, Steinwald and his coauthors argue that their proposal would benefit primary care specialists and be “budget neutral.”
Steinwald and his coauthors recognize that others have suggested different solutions, but they are skeptical about how other strategies would actually alleviate the shortage of primary care physicians.
The U.S. Congress tried to encourage physicians to enter primary care specialties by adjusting the amount of money Medicare contributes to an educational fund for physicians pursuing specialties. As part of the effort, Congress put a two-year freeze on increases in funding for nonprimary care specialties. But Steinwald and his coauthors argue that the freeze did not resolve the disproportion between the number of nonprimary and primary care physicians.
The executive branch also proposed a framework to encourage young doctors to enter primary care. The U.S. Department of Health and Human Services (HHS) suggests that increasing the number of nurse practitioners and physician assistants who could provide primary care services would help alleviate the shortage of primary care physicians.
But even if state lawmakers would allow nurse practitioners and physician assistants to be primary care providers, these health professionals are also paid according to Medicare’s fee schedule and are “subject to the same incentives facing physicians making specialty decisions,” say Steinwald and his coauthors.
Although Steinwald and his coauthors stress the importance of modifying Medicare’s physician fee schedule, they say that physicians could be enticed to practice in primary care specialties if the government offered a loan forgiveness program to reduce physicians’ medical school debt for every year of practice in primary care.
Recent data indicates that physicians who borrow money for medical school graduate with a median debt of over $190,000.
Steinwald and his coauthors recognize that offering a loan forgiveness program to all medical students who enter primary care fields could be costly. But they argue that the amount of funding needed for a loan forgiveness program could be reduced if students’ eligibility for the program depended on their academic performance in medical school. Steinwald and his coauthors say that giving top students options for greater loan forgiveness would encourage more top medical students to enter primary care specialties.
