[Ed. Note: Stephanie Hinds, MS3 and BRI-St. Louis University chapter leader, graduated from UC Berkeley in 2012 with a BS in Molecular Environmental Biology. Stephanie strongly believes that financial health and autonomy for both physicians and patients is just as imperative as mental and physical health. She hopes to manage her own primary care clinic based on free market principles with less influence from insurance companies.]
By 2030, the AAMC (Association of American Medical Colleges) physician workforce report estimates a primary care physician shortage of nearly 45,000 PCPs (primary care physicians).1 Despite an increase in the physician-to-population ratio each decade since the 1980s, the primary care physician shortage grows because most new physicians pursue specialization.2 An undervaluation of primary care might be contributing to the scarcity of PCPs, deemed most critical in internal and family medicine by the Massachusetts Medical Society.3 The clearest demonstrations of this undervaluation are the pay structure for primary care and the financial burden of medical education.
The essentially universal FFS (fee-for-service) reimbursement model undercompensates primary care. FFS ignores compensation for somewhat intangible aspects of primary care delivery such as coordinated care, integrative medicine, and managing patients with chronic conditions. On the other hand, the FFS model is conducive to increased compensation for specialists who focus on procedures.4 Unfortunately, poor compensation for primary care translates into lackluster patient treatment. Physicians are forced to cram their days with as many appointments as possible, which means less time and energy spent with each patient. This sort of conveyer belt healthcare delivery results in poorer patient outcomes and increased physician burnout. Additionally, this income gap between specialists and generalists is growing, and PCPs are leaving private practice in droves.
Compounding the relative scarcity of primary care physicians is a recruitment problem. Budding young doctors’ debt burden incentivize them to choose more lucrative subspecialties rather than primary care. Currently, the student loans interest rates offered by the federal government are obscenely high. There are only two loan programs available, the Direct Unsubsidized and Direct PLUS Loan. If disbursed between July 1st 2016 and July 1st 2017, the Direct Unsubsidized and Direct PLUS loans have fixed interest rates of 5.31% and 6.31%, respectively.5 Congress sets these interest rates annually, and they are frustratingly high compared to the current home mortgage industry, which is subject to market forces. Medical students are pigeon-holed into borrowing from the federal government and lack any negotiation power, while the home buyer can shop amongst various loan products and lenders. Additionally, the two programs have high, non-negotiable loan fees of 1.069% and 4.276%, unlike fees of the home mortgage market.
“The early commitment and uncertainty of work location associated with these programs neutralize any financial benefit they offer for many students.” ~Stephanie Hinds on the primary physician shortage
Let’s crunch the numbers. Currently, medical students graduate with an average debt of $189,165.6 For Saint Louis University School of Medicine, the average annual cost of attendance ranges from $74,342 to $79,222.7 Many students take out loans to cover tuition and the cost of living for all four years, which amounts to $305,862. Assuming a student borrows the entire $305,862 and qualifies for a purely Direct PLUS loan at 6.31%, the amount borrowed comes to $318,941. To simplify the calculation, let’s assume no interest accrual during the four years, no payment towards principal or interest, and no Congressional annual rate adjustment. A fully amortized 30-year fixed rate loan translates into $392,504 paid in interest in addition to the $318,941. For a PCP making an average of $217,000 before income taxes—with malpractice insurance and private practice overhead whittling that income down—that’s a ridiculously pricey education.8 Medical students are borrowing at an obscene premium, and any financially savvy student would be more inclined to choose a specialty to deal with their debt. Others will perhaps apply for federal and state forgiveness programs, consolidate and refinance their loans, or unwisely saddle themselves with what is essentially a lifelong debt.
Unfortunately, alternative loans and loan forgiveness programs designed to ameliorate the primary care doctor shortage are fairly restrictive. Students can apply for the Primary Care Loan with a “low” 5% interest rate, decreased payback time and decreased penalty fees. However, in order for “financially needy students” to apply—(and it’s unclear what student isn’t financially “needy”)—they must commit to pursuing primary care before they have even experienced multiple specialties in third year clerkships. Alternatively, the National Health Service Corps (NHSC) offers debt relief; however, students must agree to practice in underrepresented areas with a certain Health Professionals Shortage Area (HPSA) score—which the NHSC can adjust annually. The early commitment and uncertainty of work location associated with these programs neutralize any financial benefit they offer for many students.
Further, the federal government does not offer loan refinancing, and the repayment programs prohibit physicians from refinancing with a private company. So, physicians interested in primary care who wisely refinance and consolidate multiple loans exclude themselves from loan forgiveness programs. These arrangements force students to choose between exploring primary care and financial stability in the budding stage of their medical career.
Overall, government programs are poorly designed to correct the recruitment problem in primary care. In order to truly attract students to primary care, some combination of these three objectives needs to occur:
- the price tag of medical school must shrink (e.g. subsidies or fast track paths to primary care)
- wages must increase (e.g. a reimbursement model that acknowledges the intangible, yet valuable aspects of primary care)
- job satisfaction must improve
I suggest we look to Direct Primary Care as a model for happier physicians and patients. If the government wants to solve this problem—and many people do seem to believe it has the magic ability to solve problems—then it ought to find ways to accomplish these objectives.
1 Tim, Dal et al.2017 Update—The Complexities of Physician Supply and Demand: Projections from 2015 to 2030 Final Report. AAMC, 2017. https://aamc-black.global.ssl.fastly.net/production/media/filer_public/a5/c3/a5c3d565-14ec-48fb-974b-99fafaeecb00/aamc_projections_update_2017.pdf
2 L. A. Makaroff, DO, L. A. Green, MD, S. M. Petterson, PhD, A. W. Bazemore, MD. Trends in physician supply and population growth. American Family Physician. 2013;87(7). http://www.aafp.org/afp/2013/0401/od3.html
3 Howell, James. “Massachusetts Medical Society’s 2013 Physician Workforce Study Shows Physician Shortages, Difficulty in Recruiting.” Massachusetts Medical Society, 2013. http://www.massmed.org/News-and-Publications/MMS-News-Releases/Massachusetts-Medical-Society-s-2013-Physician-Workforce-Study-Shows-Physician-Shortages,-Difficulty-in-Recruiting/ – .WUGD9xPyvUJ
4 Rittenhouse Diane et al. Primary Care and Accountable Care—Two Essential Elements of Delivery-System Reform. New England Journal of Medicine. 2009; 361 (24):2301-2303. http://www.nejm.org/doi/full/10.1056/NEJMp0909327
5 “Interest Rates and Fees.” Federal Student Aid. N.p., 30 June 2016. https://studentaid.ed.gov/sa/types/loans/interest-rates – older-rates
6 “Medical Student Education: Debt, Costs, and Loan Repayment Fact Card.” AAMC, Oct. 2016. https://members.aamc.org/eweb/upload/2016_Debt_Fact_Card.pdf
7 Grisham, Sarah. “Medscape Physician Compensation Report 2017.” Medscape, 5 Apr. 2017.
8 “School-Based Scholarships and Loans.” Health Resources & Safety Administration (HRSA) Health Workforce, Mar. 2017. https://bhw.hrsa.gov/loansscholarships/schoolbasedloans