The number of primary care providers continues to drop
By George W. Chapman
Lacking an organized approach to healthcare delivery in the U.S., we experience the highest cost per capita in the world and rank 40th in overall mortality. Now, our once formidable “front line” of primary care providers is battle weary and in retreat.
Thanks to the lack of any planning at the national level, coupled with decades of chronic underinvestment, providers are leaving the front line of primary care, favoring better resources (pay) and lifestyle (time) available in non primary specialties.
Fewer primary care providers (be they MD, PA, NP) results in longer wait times for appointments across all specialties; decreased access, especially in rural areas, and higher costs due to increased use of specialists and overwhelmed emergency rooms. Consequently, premiums will rise across the board.
In 2022, primary care spending was only 5% of all healthcare costs. The number of primary care providers dropped from 106 per 100,000 people in 2022 to 104 per 100,000 in 2023. The trend is well established. Medical students are gravitating away from primary care (FP, Peds, OB-GYN) and toward specialties. Efforts by Medicare to “level the playing field” between primary care docs and specialists has been slow and inadequate. The best bet for a fledgling primary care resident is to avoid the economic and mental hassles of private practice and seek employment with a large hospital-centric healthcare system. And it’s totally understandable. However, the trend toward the security of employment unintentionally exacerbates the shortage of providers because (ask any doc in private practice) employed docs work fewer hours than their private practice counterparts.
PCPs are the quarterbacks of healthcare. Without their involvement and direction, we will end up meandering our convoluted, confusing and disjointed “non-system” alone. Virtual visits and even AI may provide some relief and most patients who have experienced virtual care are OK with it. (Probably had no choice?) Without an adequate supply of MDs, PAs and NPs in primary care, patient frustration and premiums will invariably increase. If we are to fix healthcare, it has to start with the foundation of primary care.
Price Transparency
Of all the things that need fixing in healthcare, price transparency is way down on the list. Way, way down. Trump recently signed an executive order reinforcing the already existing rules on price transparency that were promulgated in his first term. Briefly, the rule requires insurers to post what they agreed to pay hospitals for 300 or so procedures. Then, in turn, hospitals are to post their prices for those same procedures. For the 92% of us covered by insurance, price transparency is nice but is practically useless. Price transparency means everything if you’re without insurance or your plan doesn’t cover a certain procedure. For the vast majority of us, calling hospitals to check on their price for an MRI or outpatient procedure or finding out what your insurance pays the hospital for the procedure can be a waste of your time. In just about every case, you will be directed by your provider to an MRI site, hospital or outpatient center where the provider has privileges. Going elsewhere will be considered out-of-network and you could end up paying 100%. Medical billing and payment is very complicated. If we had a universal healthcare system, calling around for the best price would be totally unnecessary.
Ambulance Billing
This is virtually the wild west of billing. If you have had to use an ambulance (and God bless our first responders who often keep you alive on the way to the ER) you probably owe more out of pocket for the ambulance ride than out of pocket for the hospital and physician services combined. Insurance coverage is all over the map (and calling ahead of your emergency for a price check is clearly not an option!) Most likely, you will end up negotiating after the bill arrives. Surprise billing regulations do not cover ambulances. These regs typically apply to bills from physicians who, unbeknownst to you, do not participate in your insurance plan even though the hospital ER does. In most cases, the hospital now pays the difference between what your plan would have paid and what the non-par doc charges. You are held harmless. Both volunteer and for-profit ambulance companies operate outside the competitive market place. Let’s face it. They can because you are going to take whatever ambulance arrives first. That being said, 80% of ground ambulance rides are out of network. A case in California recently got a lot of notoriety. A jogger was struck by a car and taken via ambulance to a nearby ER just a few miles away. He was treated and released. The ambulance bill (again, God bless our first responders) was $13,000. After months of phone calls, the Blues [Blue Cross Blue Shield] acquiesced and paid $10,000 leaving the jogger with a $3,000 bill. After another few months of calls, this time with the commercial ambulance (and the press) the company waived the $3,000. The Center for Consumer Information and Insurance Oversight was involved. They were involved in more than 650,000 similar billing disputes in 2023. Unfortunately, 15% of their staff has been eliminated by DOGE, the Department of Government Efficiency. This is just another example of what could be fixed ahead of price transparency.
Enough Flu Vax Next Season?
To put it mildly, things have been rather chaotic at CDC/FDA/NIH/CMS since the election. As I’m writing this column, here it is where things stand in early March. The FDA abruptly cancelled a March 13 vaccine advisory committee meeting. The meeting is attended by experts — including drug designers, scientists, manufacturing, biologists and other healthcare stakeholders — to recommend the strains for next season’s flu vaccine. The unexpected delay has raised concerns that unless a decision is made sooner than later we won’t have enough flu vax in the fall. Drug manufacturers face tight deadlines every year and this is exacerbating the problem. As of this writing in early March, 910,000 people have been hospitalized with the flu. 19,000 adults and 90 children have died from flu complications.
National Healthcare Spending
We spend about $5 trillion annually on healthcare or just over $14,000 per capita. It’s by far more than any other country. It breaks down as the following: hospitals, 31%; other personal healthcare, 16%; physicians, 15%; drugs, 9%; clinical services. 5%; nursing homes. 4%; home care. 3%. The remaining 17% goes toward net cost of health insurance (basically overhead), investments and public health activities. For hospitals, revenue comes from three main payers: commercial insurance, 40%; Medicare, 30%; and Medicaid, 20%. The remaining 10% is self-pay, grants, investments, donations. Operating margins are razor thin for the majority of hospitals. The cuts to Medicaid will have a disproportionate impact on rural hospitals.
DOGE Hits Vets Hard
No one is spared from the recent purge of federal employees and our veterans are no exception. They comprise 30% of the VA workforce. The VA has been ordered to cut 80,000 jobs (nurses included) or 15% of the workforce. The goal is to return to the 2019 total of 400,000 employees. There are 170 VA hospitals and 1,380 outpatient healthcare facilities across the country making it our largest healthcare system. The VA cares for 15.8 million vets.
Medicaid Cuts
Congress has approved a federal budget that slashes $880 billion in Medicaid funding to indigent individuals, hospitals and nursing homes. Consequently, if the states are to continue the same level of services they must raise taxes. If the feds impose a suggested dollar per capita cap, the states will have to come up with between $700 billion and $1.1 trillion over the next 10 years. The states that would be most impacted are Arkansas, Kentucky, Louisiana, Mississippi, New Mexico and West Virginia. All these states are “red” except for New Mexico. In addition to a state tax increase, hospitals will most likely negotiate higher rates from commercial insurers to offset losses in Medicaid funding and the increase in uninsured patients seeking care in their clinics and emergency rooms.
George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse.