Where Have All the Doctors Gone?

Apr 16, 2020

This pandemic may be an international event, but it is most certainly a personal experience. None feel this more than physicians. That impact reaches deeper and wider than the front-line providers we see day and night on television. Will this fee-for-service healthcare system survive? 

Sometimes we forget that without a physician insurance companies, hospitals, physical therapy offices, medical schools, nurses, pharmacists, labs, diagnostic centers, home health, and surgery centers would not exist. The physician starts the chain. 

Consider this scenario, you injure your back and go to the Emergency Department (1). You see an emergency physician (2). X-rays are taken (3), then you’re told to follow up with your physician (4). You do, and he sends you to a specialist (5), who orders an MRI (6), the radiologist reads it (7). The specialist writes you a prescription you get filled at the pharmacy (8), and sends you to physical therapy (9). Then nine different offices begin the arduous task of coding your bill to receive the most reimbursement they can under from your insurance company.  

The Centers for Medicare and Medicaid Services (CMS) reports that in 2018 the US spent more than $3.6 trillion dollars, representing 17.7% of the Gross Domestic Product, on healthcare. The spending and division of all that money lays solely on the backs of the 892,858 active physicians as reported by AAMC for 2017. 

You might imagine that this is a high demand time for physicians. The novel coronavirus immediately absorbed the resources, energy, supplies, beds and of course physicians. Remember, on March 16th when the Surgeon General urged providers to stop all elective surgeries, to free capacity? The almost universal compliance of the industry combined with the “stay at home orders” resulted in the cancellation of virtually all routine, follow-up, or elective medical spending.  

That $3.6 trillion in healthcare spending did not take a pandemic in to account. The CARES act included $100 million in emergency funding for front line hospitals and personnel, but no one believes that will cover the real costs. Yet the estimated demand, pre-virus ($3.6 trillion), still exists. And that spending impacts millions of workers in thousands of organizations. Always with the physician at the epicenter. 

Obviously emergency response specialties are in high demand. If you assume that out of the 892,858 physicians the virus absorbs every one of our emergency medicine (42,348), infectious disease (9,136), pulmonology (5,265), and say 10% of internal medicine (11,557) physicians. What happens to the remaining 824,550 physicians typically performing fee for service medicine?  

 Telehealth is one solution. Providers scrambled in February with implementing virtual visits. I’ve seen my neurologist in his private practice for migraine care for 20+ years. Immediately in late February, my routine appointment was cancelled. However, within a week, I was offered the option of a virtual appointment. This was easy as I am an established patient and my physician knows me. It was great and I asked if I could continue virtual visits post pandemic. 

He told me that many of the 48% of physicians who are in private practice are quickly learning new tools and new technologies. Private practice physicians have the luxury of making their own decisions about their future. Their financial health will be a big indicator of how long they can survive. As the pent-up demand for healthcare grows, doctors know that if they stay alive, the patients will return. Yet, knee replacements, endoscopies, routine blood work, and annual exams can’t happen remotely.

About 47% of physicians today are employed. Most work directly for a hospital or healthcare facility. They might have sold their private practice to the hospital and they now work under an employment contract. These employed physicians are at the mercy of the decisions made by their employers. Organizations with healthy bottom lines will obviously be in the best place to manage, yet many hospitals are hemorrhaging money. Very few healthcare companies sit on large cash reserves. 

Without the lucrative elective procedures taking place, no money is coming in. But the costs remain. Hospitals are scrambling to stay afloat and still be prepared for the pent-up demand, they anticipate. Employed physicians, at the mercy of their employers, are experiencing renegotiated contracts, furloughs, and even cancelled contracts. Last week, one of my clients told me he received a call from a Harvard trained internal medicine physician, looking for any work.   

Perhaps the physicians in the most precarious situations are physicians working for staffing companies, venture capital organizations, or specialty contracting groups. Staff Care’s recent report estimated this group to be around 52,000 physicians. These physicians provide locum tenens services. In other words, temp staffing. Hospitals use locums physicians for positions they cannot fill, vacation coverage, and emergency coverage if a physician leaves unexpectantly. 

The Staffing Industry Analysts report 49 large firms who offer locums staffing. Out of our $3.6 trillion in healthcare spending, locums accounts for $3.78 billion. The flexibility and higher hourly salaries attract physicians, who may want to see the world, or work for a few months, then take time off. Obviously, locums are very pricey for the hospitals, because they pay a premium physician rate, as well as living expenses, and then the fees to the contracting or staffing company.  

Unfortunately, many of these high-dollar temporary physicians find themselves the first to go. Interestingly, many of the largest locums firms are owned by venture capitalists, Japanese conglomerates, or large multi-national, publicly traded companies Unfortunately for these physicians, their wellbeing may fall far below decisions that impact the bottom-line.   

In the midst of a pandemic that spotlights the physician at the epicenter of a shortage of medical care, this may only be the case for very few. The remainder of the physician population is experiencing the same very personal and painful consequences of a global healthcare crisis.

I wonder, when the dust settles, will we see a readjustment in the employment models in place pre-February 2020. Will we see healthcare reassess the fee-for-service model and move toward value-based care? Will we see organizations plan for emergencies? First, we get through the fire – yes, but then what?