By Mario H. Lopez
Today, it can take weeks to see a doctor, and when patients do get in, appointments last about 15 minutes. The reason is simple. America is facing a shortage of doctors.
Nearly 19 percent of the U.S. population is covered by Medicare. Declining reimbursement rates under Medicare are forcing many doctors to retire early or not accept Medicare at all. The problem will only get worse. Seniors are living longer than was anticipated in 1965 when Medicare was signed into law. Sixty-seven million people are enrolled in Medicare today.
Implementing long-term, free-market solutions can fix the doctor shortage but change will not happen overnight. The most immediate way to keep an adequate supply of doctors is to adjust Medicare reimbursement rates to be more in line with the private market. Failure to do so invites more government control over health care.
Rates Not Keeping Up with Inflation
Adjusting for inflation, Medicare reimbursement rates for doctors have fallen by 29 percent in the last 23 years while payments for other health care providers (skilled nursing facilities, hospices, inpatient and outpatient hospitals) have kept pace with rising prices. In 2023, physicians were the only provider group that did not receive an inflation adjustment.
The Centers for Medicare and Medicaid Services (CMS) sets reimbursement rates based on overly bureaucratic formulas that fail to adjust for inflation. The American Medical Association (AMA) among others has called for reform.
A recent analysis by the Pacific Research Institute finds low Medicare payments exacerbate the physician shortage and can lead to reduced health care access for vulnerable patients. This should surprise no one. Doctors in private, independent practices operate as small businesses. Assuming Medicare covers about 19 percent of their patients when payments fail to keep up with their cost of doing business, doctors have no choice but to stop seeing Medicare patients, scale back staff, cut down on service, accept buyouts from larger providers, or simply close.
Collateral Damage
The AMA predicts a shortage of up to 86,000 physicians by 2036. Doximity, which describes itself as “the largest professional medical network for U.S. healthcare professionals” states that “88% [of physicians surveyed] said that their clinical practice has been impacted by the physician shortage,” with 30 percent describing the shortage as “severe.” Worse, “half of all physicians surveyed are having thoughts about leaving clinical practice altogether.”
While skyrocketing costs, burnout, and increasing retirements all play a part, the role of Medicare’s inadequate reimbursements directly drives the cost factor. Naturally, the systemic strains affect all patients.
Doximity finds that 70 to 87 percent of physicians claim longer wait times, diminished access, worsened disparities, and delayed treatment. “Many physicians also believe the shortage has contributed to worse or preventable outcomes (42%) and later-stage diagnosis (36%) in some patients.” When a disease or illness is identified in later stages, it becomes more expensive to treat.
Underserved Patients
Government data shows about 75 million Americans live in Health Professional Shortage Areas for Primary Care. Unsurprisingly, the populations of these areas to a great extent tend to “include low-income populations,” according to the Health Resources and Services Administration.
For example, one-quarter (24 percent) of Hispanic adults say they have no usual source of health care other than the hospital emergency department, and 21 percent of Hispanic adults say it is somewhat or very difficult to get to a location for health care.
The AAMC (Association of American Medical Colleges) states that more than 200,000 additional doctors would need to be trained and installed in the workforce to ensure underserved communities can get access to care at the same rate as everyone else.
Parity for Doctors
A bipartisan coalition of members of Congress, who happen to be physicians, have introduced the Strengthening Medicare for Patients and Providers Act (H.R. 2474) which will address the inflation factor in Medicare reimbursement. A report from the Senate Finance Committee on Medicare physician reimbursement is gaining praise.
The Medicare model is essentially a type of price control, an onerous path that will lead to failure. While there are plenty of needed reforms to the health care system, one cornerstone is inescapable: without enough doctors, policy changes—no matter how well drafted and implemented—will always fall short. In the end, it is patients who will bear the heaviest burden.
Mario H. Lopez (MHL@HispanicLeadershipFund.org) is the president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all.