Federal health policy-makers, who have been struggling for years with an over-supply of hospital beds that is costing Americans more than $1 billion a year, are now becoming concerned that they may soon have another costly problem on their hands: too many doctors.
Although estimates vary, the United States faces an increase of anywhere from 28 to 40 per cent or more in the supply of physicians per capita in the next 13 years. Since economists calculate that each physician generates $250,000 or more in salary, fees and other charges, such a large growth in the number of doctors is alarming to policy-makers trying to find ways of bringing the rising cost of medical care under control.
It seems incongruous that while some policy-makers are still trying to find ways of getting physicians into the estimated 4,000 communities that are still considered to have too few doctors or too few of the right kind, other policy-makers are worried that the country will soon be over-doctored.
Between 1963 and 1973 the federal government, trying to relieve a perceived shortage of doctors and nurses, spent about $3.5 billion to develop medical personnel. In 1971, acting to meet an estimated shortage of 50,000 physicians, Congress increased medical school vacancies from 9,000 to an estimated 16,000 by 1979.
By 1976, the pendulum had begun swinging the other way. The Carnegie Council on Higher Education warned that "we are in serious danger of developing too many medical schools."
In that same year, Congress enacted legislation aimed at easing georgraphic and specialty shortages somewhat by providing incentives to medical students to enter those specialties and to practice in areas where shortages exist.
The law also moved to restrict the entry of foreign medical graduates who, since the early 1950s, have been filling an increasingly larger number of positions in the United States.
No consensus exists on the ideal ratio of population per physician. The range of estimates varies considerably. What can be said, however, is that increasing the supply of physicians does not necessarily result in better health.
"It should be noted," say the authors of the book, Primary Care in a Specialized World, "that many countries with less favorable physicians to population ratios have equally good or better health status statistics than the United States."
The United States now has about 175 physicians per 100,000 population, placing it behind Israel, the Soviet Union, Italy and Western Germany in the per capita supply of doctors. By 1990, according to current estimates, the United States will have anywhere from 225 to 240 or more physicians per 100,000.
One of those concerned about an impending surplus is Howard Hiatt, dean of the Harvard School of Public Health. "We're going to very shortly . . . (be) graduating twice as many doctors as we did 10 years ago," Hiatt said in an interview. "I don't think the country begins to realize that that's going to be twice as many people putting pressure on the system, ordering tests, prescribing surgery, seeking compensation."
The United States spent $139.3 billion, about 8.6 per cent of the gross national product, on health care in 1976. At the current rate of increase in spending, the country will be spending $243 billion annually by 1980, in excess of 10 per cent of the gross national product.
"Suppose I said to you there are too many tennis professionals," an administration official said in an interview. "In a sense, it's a meaningless expression. Too many against what standard? But if you say to keep health costs within 9 or 10 per cent of gross national product, then certainly we'll have a surplus."
In other industries, if a surplus existed one could expect market forces to take hold and to provide financial incentives to bring about a natural redistribution of physicians to direct them from areas where they are plentiful - for example, the New York metropolitan area which has about 800 doctors per 100,000 population - to Mississippi, which has about 80 per 100,000.
The economics of medicine, however, are peculiar, or at least different, yielding results that a casual observer would hardly expect.
Large metropolitan areas have more doctors per capita than smaller areas, and the larger the area, according to research, the heavier the concentration of physicians.
A recent study conducted by the Department of Health, Education and Welfare - confirming earlier research - found that doctors in large metropolitan areas charge higher fees, work fewer hours and see fewer patients than their rural and small-town counterparts.
According to Jon Gabel, an HEW economist who has analyzed the data in the survey, two conclusions can be drawn.
First, the more physicians per capita in an area, the higher the fees charged for services. Even after allowances are made for higher costs of living in metropolitan areas, fees charged are higher, according to Gabel.
Second, even though more doctors are present in the area, their incomes - apparently because of the higher fees - are not significantly different from their rural counterparts. In other words, there seems to be no correlation between how many doctors are located in an area and how much they make.
Urban areas, according to a 1976 report of the Senate Labor and Public Welfare Committee, had 73 per cent of the population in 1974 and 86 per cent of the physicians. The ratio of physicians per 100,000 population was almost 2 1/2 times greater in metropolitan than in nonmetropolitan areas.
The concentration of doctors into metropolitan areas and into the more affluent sections of cities appears to do more than simply raise fees.
Prof. John Bunker, an anesthesiologist on the faculty of the Stanford Medican School, compared the number of surgeons in the United States and in England and found that there were twice as many per capita here and that twice as much surgery was being performed here.
Buner's study did not prove that unnecessary surgery is being performed in the United States, although he suggested that it was "likely that some unnecessary surgery is being performed."
In his book "Who Shall Live?" Victor Fuchs, one of the country's most prominent health economists, discusses a study of surgeons in a New York suburb.
"The surgical workload of the typical surgeon was only about one-third of what experts deemed a reasonably full schedule," Fuchs said. A few surgeons were very busy, with 25 per cent of the surgeons doing half the work. Many surgeons, Fuchs said, were doing simple procedures often assigned to first-year surgical residents.
Despite the imbalance in the work load, Fuchs wrote, surgeons did not find it difficult to make a living." . . . fee levels were high enough to insure that even those with small practices made a comfortable living, and the surgeons with the heaviest work loads had very high incomes because the level of fees was generally about the same for all surgeons in the community," Fuchs said.
Economists looking for an explanation of the ability of physicians to increase prices as the supply of doctors increases offer the theory, widely held but unproven, that physicians have a unique ability to generate the demand for their services.
With health insurance - either private or government - paying roughly two-thirds of the bill for doctors' fees, the argument goes, physicians are able to order tests and procedures and generate income that they could not if the patients were paying the cost directly.
Skeptics argue that medical care may be a commodity that people consume more of as their income increases and that physicians are simply meeting a demand rather than stimulating it.
Howard Stambler, chief of HEW's Manpower Analysis Branch, sid in an interview that an increase in the physician supply to 225 per 100,000 would not necessarily mean that the country had a doctor surplus.
"If we get national health insurance, we may very well need that many doctors," Stamble said. "On the other side, if we get national health insurance and we don't have them, we may have a disaster. We can't bring them out do the woodwork."
Stambler concedes that his view is contrary to the conventional wisdom, just as seven years ago he was warning those concerned about a doctor shortage that they ought to be worried about a surplus. "I think the question is how much are we willing to spend," Stambler said. "It's like the energy question with the rising price of gasoline. We're willing to forego a lot of other things to buy gasoline."
Defeaders of the present system, as Princeton economist Uwe Reinhardt has pointed out, may argue "that any physician-induced increase in the 'demand' for phsician services is apt also to increase the quality of th treatment being dispensed, even if the extra services are not absolutely necessary. If one excepts from this assertion elective surgery, this may be valid point and one an economist is not equipped to dispute. An economist can point, out, however, that the added quality comes at a price, and that it is pertinent always to ask whether the quality so added is worth the price."