Resident Physician Reduction Shortage Act of 2015, Essay Example

Abstract

This paper investigates the Resident Physician Shortage Reduction Act of 2015. This legislation is important, as it will gradually increase the number of residency slots for medical students in hospitals. Currently, the nation is experiencing a shortage of physicians. Medical school graduates have difficulty in finding a residency program due to the Balanced Budget Act of 1997. If the federal government increases the amount of funding for residency programs, more medical students can receive training, which in turn, leads to more physicians for the patient population. It is important for health administrators to understand this legislation because it will eventually benefit in keeping health care spending low as well as increase the quality of care for patients. This legislation is imperative considering there is a record-breaking number of unmatched medical students who have graduated from medical school without confidently finding a place to complete their training.

What Is The Timeline Of The Legislation?

The Resident Physician Shortage Reduction Act of 2015 was initially introduced in the House of Representatives on February 14, 2007 (S.588 from the 110^th Congress).  Due to the bill not being passed by the House and Senate, it was reintroduced again on May 5, 2009 (S. 973 from 111^th Congress), September 23, 2011 (S. 1627 from the 112^th Congress), and March 14, 2013 (S. 577 from the 113^th Congress). The most recent reintroduction was on April 30, 2015. It was also introduced and referred to the House of Ways and Means as well as the House of Energy and Commerce on the same day. The Subcommittee on Health considered the legislation on May 1, 2015 and on May 18, 2015 (www.govtrack.us). The House and Senate have not yet voted this legislation on.

Does It Address An Externality?

The Act includes externalities because one-third of the positions will be offered to the hospitals offered over their caps. The bill can apply new Medicare funding to their current over-the-cap slots, but they are required to maintain a minimum of the current number of positions to qualify for new residencies (The US Congress). In this case, the externality occurs because hospitals in states with new medical schools are more likely to receive funding than hospitals in states with no medical schools. Moreover, the hospitals that have exceeded their resident cap at the time of enactment will receive more help than other hospitals. It is also notable that hospitals that emphasize Veteran health administration, deal in community-based settings, or focus on hospital outpatients will have a higher likelihood of receiving the Medicaid fund (The US Congress). This shows that if a hospital cannot support a higher number of residents, they will be given less funding.

Does it Address Workforce Issues?

The Act addresses workforce issues because it is being discussed to reduce physician shortages in hospitals. Currently, the number of physicians in each hospital is low as compared to the patients being serviced. The Act aims at adding 3,000 residency positions each year for five years (The US Congress). 1500 of the position will be dedicated to an area that is experiencing an actual shortage and of success, this means that there will be more physicians deployed to address the health needs of the patients.

Does It Address A Demand Or Access Issue?

The Act addresses increased demand for physicians in the hospital. Through the Act, residents will be incorporated into hospitals where they will be under doctors. During their time, and by maintaining a minimum number of residents, it will be possible for the hospitals to have a sustainable number of residents every year, and this will reduce the high demand of practitioners that are currently experienced. Currently, there are areas such as Veteran health, outpatients’ services, and community-based services that are experiencing shortages of physicians, and given that they have a high number of patients, the demand for physicians keeps on rising (Staff Writer). The bill dedicates 1500 of the 3000 physicians to this department, and therefore it sufficiently addresses the needs.

Does It Address Inefficiency?

The Act, however, does not address inefficiencies experienced in the healthcare unit. Notably, the Act is focused on increasing the number of doctors available in the hospitals and not increasing the quality of their work. However, by specifically allocated a given number to the current departments that experiencing extreme shortages, it will be possible to reduce the inefficiencies experienced in those departments.,

Economic Implications Of The Bill

The Act has not stipulated the economic impacts of the bill. However, it is clear that from the increasing recruitment and funding by Medicaid, taxpayers will have to sustain the bill in the long run. Moreover, several private practices benefited from the shortage as patients would prefer to go to the practice instead of gamble with seeing a doctor in the public hospital. However, with the increase of residents in the hospitals, there will be more hope of accessing doctors in public hospitals, and patients might prefer this because of the lower cost that will be incurred. Therefore the bill will not be favorable to private practices.

Economic Implications

The physician shortage exists and impacts many areas in the nation. Local and rural residents struggle to find primary care physicians near them for medical appointments. According to an article on www.ruralhealthworks.org, a physician shortage causes residents to purchase primary care health services in neighboring communities. This leads to driving out-of-town and spending money to obtain health care services when the money could have been spent locally at a facility closer to them. By residents traveling to other communities to receive health care, local business and the local economy loses money and eventually begin to fail. In order to keep their numbers up, physicians will try to see more patients to compensate for the residents leaving town for health care services. As an example, estimates were done on a rural community in Oklahoma just to show the economic impact of a physician shortage in a small community. Estimates done on a national level would show much larger results and much more of a significant impact on the nation’s economy.

The chart shows that the small community in Oklahoma would have to acquire 0.6 physicians just to achieve a goal of 75% of patient visits. The newly acquired physicians would produce $687,734 in revenue in both the clinic and the hospital and $919,637 for the entire economy of the rural community. Altogether, 13.8 jobs are created and $533,493 is generated from physician outcome (www.ruralheatlhworks.org).

If the Resident Physician Shortage Reduction Act of 2015 is passed it will have significant impact in the healthcare industry. The shortage of physicians will cause longer wait periods before a patient is seen, decreased time spent with the physician after the long wait. This will ultimately lead to a decrease in the quality of care. A decrease in quality of care will increase the risk of mistakes. If there are limited primary care physicians, preventative care will not be delivered, which in turn, results in higher healthcare spending (Mahmoud, 2014).

Further, if the legislation is passed, more resident slots in hospitals will be available, allowing more students to train and become physicians. Residents would no longer need to drive to neighboring communities to receive healthcare, the amount of time spent waiting to see a doctor will decrease and physicians will have more time to focus and provide quality care to their patients. Better quality of care results in fewer medical mistakes, which will lower the cost of health care spending. Due to the generation of new jobs, the nation’s unemployment rate would also decrease.

Economic Theories

The economic theory that can best describe the Resident Physician Shortage Reduction Act is supply and demand. Our nation’s demand for physicians is rising quicker than the supply. We can expect the number of physicians to increase once the legislation is passed, however, the demand for physicians will not decrease. AAMC projects that the demand for physicians and nurses will exceed supply by a range of 46,000 to 90,000 by 2025. They explain that the lower range of estimates would represent more aggressive changes secondary to the rapid growth in non-physician clinicians and widespread adoption of new payment and delivery models such as patient-centered medical homes and ACOs (www.aamc.org). Increasing amount of residency slots is beneficial to the supply and demand of physicians. Since the Affordable Care Act has allowed more people to obtain health insurance, the Resident Physician Shortage Reduction Act creates more residency slots to assist in creating more primary care physicians for patients.

Feldstein makes it clear that if the shortage of physicians continues and the federal government does not step in and help, both the public and private markets will experience short and long-term effects due to the supply and demand imbalance. For the private market, short-term effects include increased physician income and service prices, and longer wait times. The long-term effects include a decrease in physician income, and an increase in the supply and demand of physicians. For the public market, the short-term effects consist of possible increases in fees by the government, physicians accepting fewer Medicare and Medicaid patients, and the higher paying patients may get more attentions from the providers. Long-term effects may result in patients enroll in HMOs, patient demand increases and higher fees from the government (Feldstein, 2015).

Another economic theory that can be applied to the legislation is the supplier-induced demand theory. This theory observes physician behavior. It is believed that physicians will behave differently when they find their own income may be adversely affected (Feldstein, 2015). If there is an increase in the physician-to-population ration, a physician may use his or her role as the patient’s agent to prescribe additional services if they sense their salary will decrease. Feldstein labels these types of providers as imperfect agents as they would be providing patients with misinformation to manipulate the patient to demand additional services. The supplier-induced demand theory explicates the possible downside of an increased physician-to-population ratio.

To conclude, the Resident Physician Shortage Reduction Act must also acknowledge the economic trends in the physician supply and demand. These trends assist in determining if a shortage exists and if the shortage is temporary or permanent. Legislators must pay attention to trends in physician fees, patient wait times and acceptance rates, physician income, rate of return on medical education, and the applicant-to-acceptance ratios in medical schools (Feldstein, 2015).

Conclusion

The end goal of the Resident Physician Shortage Reduction Act of 2015 is to amend the title XVIII of the Social Security Act to provide for the distribution of addition of residency positions for medical graduates. It is imperative that the legislation is passed as the nation is suffering from a shortage of physicians. Patients are going without health care or traveling to neighboring communities due to lack of primary care physicians in their local communities. Economically, legislators as well health care administrators must ensure that there is a balance between the supply and demand of primary care physicians. If this legislation is passed, we can expect a gradual change over the next few years that aim to solve the shortage of physicians, an increase in the number of health care jobs generated, and an improvement in the quality of care.

References

Rechtoris, Mary. “A Call for Expanding Residency Slots: Medical School Graduates May Face a Bleak Future.” www.beckersas.com. 20 Jan. 2016. Web. 13 May 2016.

“The Economic Impact of a Physician Shortage.” www.ruralhealthworks.org. Web. 16 May 2016. PDF

Mahmoud. “Brace For the Impact: More Physician Shortages Are Coming.” Web log post. Scholarblogs.emory.edu. 24 Mar. 2014. Web. 16 May 2016.

Feldstein, Paul J. Health Policy Issues: An Economic Perspective. Chicago: Health Administration, 2015. Print.

Staff Writer. “4 Things Students Should Know About The New GME Bill”. American Medical Association, 2015, https://www.ama-assn.org/education/gme-funding/4-things-students-should-know-about-new-gme-bill.

The US Congress. “H. R. 2124 To Amend Title XVIII Of The Social Security Act To Provide For The Distribution Of Additional Residency Positions, And For Other Purposes.”. Congress.Gov, 2021, https://www.congress.gov/114/bills/hr2124/BILLS-114hr2124ih.pdf.