health care and the economy - Speaking Out: Imperiled, Independent Privately Practicing Physicians Are Good for the Economy

Sometimes, in the course of human events, it’s important to tell the other side of the story.

The independent practice of medicine is in trouble. By 2020, there’s likely to be a shortage of 50,000 doctors in the U.S, fewer doctors are entering private practice, more are leaving, and more are seeking employment with limited hours. Privately practicing doctors are demoralized and are seeking to bring to the public at large and policymakers an understanding of their plight and the decreasing appeal of medicine to the best and the brightest..

Forces for reform are advocating changes that lessen doctor autonomy – IT dictated practice protocols, salaried positions with fixed practice patterns in big groups or hospital systems – or that marginalize payments – cuts in physician reimbursement, Medicare payment rates for all payers, limited payment for high-cost care, competitive bidding for hospital episodes-of-care. These “reforms” are all part of a pattern to bring doctors to heel, but not necessarily to heal.

Lastly, there is a behind the Medicare and private practice scene effort, to minimize fee-for-service payments, said to inappropriately incentivize doctors to do either the wrong, the high-priced, or ineffective thing.

In other words, you can trust government officials or health plan executives but not doctors to do the right thing. All that is required is the establishment of a Center for Medical Effectiveness and Health Care Decision Making and rules for what one can and cannot do, or what one will be paid for..

And yet every Chamber of Commerce official knows health care is usually the major employer in most communities. Chamber members know physicians in private practice directly or indirectly generate 13 jobs. These physicians still comprise of 80% of the caregiving doctor workforce. The Chamber also knows hospitals, whose patients usually come from a medical staff engaged in private practice, are more often than not the biggest single employer in town.

I’ve said some of these things in a previous April 13, 2008 blog, which I shall reprint now.

Best Kept Secret: Health Care is Good for the Economy

For many residents of Bangor, the hospital is replacing the mill as the passport to the middle class. This trend extends nationally, and it could help blunt the faltering U.S. economy. Demand for health care tends to stay strong during recession. Cash-strapped consumes are more likely to cut back on new appliances or cars than visits to the emergency room.

Conor Doughtery, “Factories Fading, Hospitals Step In,” Wall Street Journal, April 15, 2008

To hear politicians tell it, health care in the U.S is in a doleful state – unfair, unaffordable, inaccessible, uncoordinated, and uncommonly and unnecessarily complicated.

Yet if you speak to the local chambers of commerce, business groups, employer recruiters, or economists-in-the-know, they’ll tell you health care is the biggest employer in town – bigger than oil in Houston, bigger than the Street in New York City, bigger than education in Boston, bigger than insurance in Hartford, bigger than the furniture industry in North Carolina, bigger in Nashville than state government, bigger in Arkansas than chicken , bigger than Hollywood in L.A., bigger than manufacturing almost everywhere you care to look.

In the U.S. from 1998 to 2007, manufacturing fell from 14% to 10% of those employed, while health care rose from 9.5% to 11.5%. Last year, manufacturing lost 310,000 jobs. Health care gained 363.000. In places like Duluth, health care now employs 20% of all workers, up from 14% five years ago. In Minnesota as a whole – thanks to United Healthcare, Medtronic, the Mayo Clinic, and countless other health related firms in Medical Alley – health care is by far the dominant employer. In Bangor, Maine, from 1990 to 2007, manufacturing jobs fell from 16% to 6%, while health care positions rose from 12% to 20%. And so it goes in almost every city and region in the US.

Health care differs in some ways from manufacturing. Entry level jobs pay less, and wage differentials from workers and top doctors and hospital administrators tend to be greater. Health care requires more education. You can’t just step off the street into a job.

And if politicians have their way, health care may grow even faster, as more federal monies are pumped into the system. It’s going to happen with Republicans, too, as market-based health care grows. There’s no getting around it. As Americans age, they require and demand more health care. So relax, you doctors out there. You’re in a growth industry