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News from the National Academies
Date: Jan. 23, 1996
Contacts: Dan Quinn, Media Relations Associate
Darice Griggs, Media Relations Assistant
(202) 334-2138; Internet <news@nas.edu>


FOR IMMEDIATE RELEASE
CUT RESIDENCY FUNDING, FREEZE MEDICAL SCHOOL SLOTS
TO BETTER MATCH PHYSICIAN SUPPLY WITH REQUIREMENTS

WASHINGTON -- Immediate steps are needed to reduce the overall number of physicians-in-training in the United States, while protecting access to health care for underserved populations, a committee of the Institute of Medicine said in a report* released today. The report calls for a freeze on class sizes in medical schools, recommends that no new medical schools be opened, and says the federal government should reduce the number of medical residency positions it funds.

"In the past two decades, the number of physicians has grown 1.5 times the rate of the general population, increasing from 150 per 100,000 people in 1970 to 245 in 1992," said committee co-chair Don Detmer, senior vice president, University of Virginia, Charlottesville. "Yet for all this growth we have seen too little improvement in the cost or quality of, or access to, health care. Having more physicians has not meant having more care of the right kind, at the right place, or at the right cost."

The committee found little evidence of benefits from a significant oversupply of physicians. And problems can arise. Studies have shown that in a fee-for-service practice, increasing the number of doctors can lead to higher aggregate health care costs. Left unchecked, the rising number of physicians may crowd the physician labor market to the point where promising U.S. students might even forego a career in medicine, the report says.

The report says that finding a perfect balance between physician supply and societal needs is probably an unachievable goal. However, the prospect that an "appreciable surplus" of physicians will arise in coming years means that action is needed now to bring the demand and supply into better balance.

"Clearly, if the nation had to choose today between too many physicians and too few, it would prefer an excess, but we think there is little to be gained from a huge imbalance," said co-chair Neal Vanselow, professor of medicine, Tulane University, New Orleans. "Producing more physicians than the nation requires is a waste of both human resources and the federal resources spent on residency training."

The largest growth in the physician work force has been in the number of international medical graduates (IMGs) coming to the United States for government-funded residency training, and eventually, to practice. From 1988 to 1993, the total number of IMGs in residency or fellowship training increased by 80 percent -- from 12,433 to 22,706 -- while the number of U.S. graduates held steady at about 17,500. Seventy-five percent of IMGs who come to the United States for residency training remain here to practice.

The link between payments for health services and for graduate medical training needs to be broken, the committee said. Under today's system of funding, hospitals are compensated by the federal government for each resident they train. This system should be revamped to bring the total number of positions funded closer to the number of graduates from U.S. medical schools. With no cap on the number of residency positions funded, there is an incentive for cash-strapped hospitals to increase residency positions in order to bring in more federal funds.

Some hospitals -- particularly in the inner city and rural areas -- have trouble attracting U.S.-educated doctors for residency training. These institutions depend on an influx of IMGs and the funding they bring to help provide care for underinsured, uninsured, and poor populations. To make up for the loss of income and care that a cut in residency positions could bring in those cases, the federal government should develop a system of "replacement funding" that directly supports the health care of needy populations, rather than funneling such support through residency training, the committee said. Such replacement funding would enable hospitals to use federal support more efficiently by catering spending decisions to the needs of the patients. Some hospitals may elect, for example, to replace resident physicians with nurse practitioners and physician assistants.

The committee stressed that the demand for doctors will remain unpredictable and in flux as managed care continues to grow in relation to the traditional fee-for-service delivery system. Policy-makers, academic health centers, and prospective students need accurate data on the changing demand for and supply of physicians to judge the latest trends. In recognition of the fact that a record number of people are still applying to medical school in this country, despite an impending oversupply of physicians, the committee recommended that up-to-date information on career opportunities in medicine be made available to prospective medical students. The report also recommends that the U.S. Department of Health and Human Services (DHHS) fund research on physician work-force issues, including the relationships among physician supply and health care costs, quality, and access.

The study was funded by the National Research Council with support from DHHS. A committee roster is below. The Institute of Medicine is a private, non-profit organization that provides health policy advice under a congressional charter granted to the National Academy of Sciences.

*The report, The Nation's Physician Workforce: Options for Balancing Supply and Requirements, is available from the National Academy Press at the mailing address in the letterhead; tel. (202) 334-3313 or 1-800-624-6242. The cost of the report is $22.00 (prepaid) plus shipping charges of $4.00 for the first copy and $.50 for each additional copy. Reporters may obtain copies from the Office of News and Public Information at the letterhead address (contacts listed above).
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INSTITUTE OF MEDICINE
Division of Health Care Services

Committee on the U.S. Physician Supply

Don E. Detmer, M.D.* (co-chair)
Senior Vice President
University of Virginia
Charlottesville

Neal A. Vanselow, M.D.* (co-chair)
Professor of Medicine
Tulane University School of Medicine
New Orleans

Carol A. Aschenbrener, M.D.
Chancellor
University of Nebraska Medical Center
Omaha

Howard L. Bailit, D.M.D., Ph.D.*
Senior Vice President for Health Services Research
Aetna Health Plans (retired)
Hartford, Conn.

Spencer Foreman, M.D.*
President
Montefiore Medical Center
Bronx, N.Y.

Kay Knight Hanley, M.D.
Hanley & Hanley, M.D., P.A.
Clearwater, Fla.

M. Alfred Haynes, M.D, M.P.H.*
Director
Drew-Meharry-Morehouse Consortium Cancer Center (retired)
Palos Verdes Peninsula, Calif.

Robert M. Krughoff, J.D.
President
Center for the Study of Services
Washington, D.C.

Edward B. Perrin, Ph.D.*
Professor
Department of Health Services
School of Public Health and Community Medicine
University of Washington
Seattle

Uwe E. Reinhardt, Ph.D.*
James Madison Professor of Political Economy
Princeton University
Princeton, N.J.

Mary Lee Seibert, Ed.D.
Associate Provost
Ithaca College
Ithaca, N.Y.

George F. Sheldon, M.D.
Professor and Chair
Department of Surgery
University of North Carolina School of Medicine
Chapel Hill


INSTITUTE OF MEDICINE STAFF

Kathleen N. Lohr, Ph.D.
Director, Division of Health Care Services

Don Tiller
Administrative Assistant, Division of Health Care Services



* Member, Institute of Medicine
Member, Board on Health Care Services