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The Keckley Report

The AMA Resolution that Physicians need to be more Economically Savvy: An Observation

By November 25, 2019March 1st, 2023No Comments

At the Interim Meeting of the American Medical Association last Tuesday in San Diego, its House of Delegates approved a resolution calling for physicians to be better educated in health care economics. “The new policy encourages medical schools and residency programs to include basic content related to the structure and financing of the current health care system in their curricula” per the AMA.

Specifically, the resolution calls on medical schools and residency programs to incorporate content on the organization of health care delivery, modes of practice, practice settings, cost effective use of diagnostic and treatment services, practice management, risk management, quality assurance and payment mechanisms– fee-for-service, managed care, alternative payment models et al.

AMA has been around since 1847. Its 240,000 members look to the association to advocate on their behalf addressing much of their lobbying toward legislation that protects economics of the profession. So, the association’s desire to increase healthcare economic competence among its members is understandable. But medical students, residents and practicing physicians might be ahead of the AMA already.

The fact is that most medical students (75%) face enormous debt ($194,000). Most medical residents can’t live on the stipend paid by the teaching hospital and struggle to make ends meet, and most physicians feel uncertain about the future of the profession and its economic security.

Being a physician is a calling, but it’s also a business. So, the AMA resolution might be welcome news to a few, but for most, it’s not particularly timely or newsworthy.



Physician population: There were over 1,005,295 practicing physicians in the United States (277.8 active physicians/100,000 ranging from a high of 449.5 in Massachusetts to a low of 191.3 in Mississippi): 93% have an MD degree, 76% were educated in the United States, 79% were licensed in a specialty, 22% held active licenses in two or more states and 33% practice full-time in primary care. (Internal Medicine, Family Medicine/General Practice, Pediatrics, Obstetrics & Gynecology, Geriatrics), 443, 609 are employed in hospitals (46% of total) “The Complexities of Physician Supply and Demand” Association of American Medical Colleges April 2019,

Physician demographics: median age is 46.8, 65% are male, 74% are Caucasian, 6% Asian, 12% African American, physicians over age 65 account for 15% of the active workforce and those between ages 55 and 64 make up 27% of the active workforce, leading undergraduate degrees for new medical students: Business (28%, engineering 11%, education 11%, health 8%, computer science 8%, social sciences 6%, “The Complexities of Physician Supply and Demand” Association of American Medical Colleges April 2019,

Physician supply-demand: By 2032, we project a primary care physician shortage of 21,100 to 55,200 physicians, a shortfall across the non primary care specialties of 24,800 to 65,800 physicians and a shortage of physicians in surgical specialties of 14,300 to 23,400. “The Complexities of Physician Supply and Demand” Association of American Medical Colleges April 2019

Physician income vs. other countries: The United States has the highest paid general practitioners and the second-highest paid specialists in the world behind the Netherlands.[8] Public and private payers pay higher fees to US primary care physicians for office visits (27% more for public and 70% more for private) than in Australia, Canada, France, Germany and the United Kingdom.( Rie Fujisawa; Gaetan Lafortune (2008). “OECD health working papers #41: The remuneration of general practitioners and specialists in 14 OECD countries: What are the factors influencing variations across countries?” Directorate for Employment, Labour, and Social Affairs. OECD. p. 63, Laugesen, M. J.; Glied, S. A. (2011). “Higher Fees Paid to US Physicians Drive Higher Spending for Physician Services Compared to Other Countries”. Health Affairs. 30 (9): 1647–1656. doi:10.1377/hlthaff.2010.0204. PMID 21900654).

Medical School Attractiveness: Applications to America’s 141 Schools of Medicine and 35 Schools of Osteopathy have increased steadily to 53,371 last year and enrollment is up 31% since 2002. Their grad point average (3.58) and MCAT scores (511.5) is high and increasing. These kids are not delusional about the profession. They know the training process is a pressure-cooker: most will spend 4 years in med school, then another 3-5 years in a residency before they start their practice. More than 75% will graduate with debt averaging $194,000: most face payments of $2100/month for 10 years to pay off their obligation. “The Complexities of Physician Supply and Demand” Association of American Medical Colleges April 2019

Physician Burnout: Almost half (43.9%) say they’re burned out, down from 54.4% in 2014. Shanafelt et al “Changes in Burnout and Satisfaction With Work-Life Integration in Physicians and the General US Working Population Between 2011 and 2017” Mayo Clinic Proceedings September 2019


Medical necessity of stents challenged
For coronary artery blockage, a stenting procedure is the safest and best intervention. But a new study, released last week, found that for certain classes of patients (those with frequent chest pain or certain cardiac events) with blocked coronary arteries, routine surgeries involving stents failed to reduce the risk of heart attacks any more than medical therapy, including drugs, exercise and dietary changes. The findings were reported at the annual scientific meeting of the American Heart Association last Saturday. Per Frost and Sullivan, stents accounted for 16.8% of the $39.5 billion global market for cardiovascular devices in 2018 and is growing at 7% per year. Caffrey “In Stable Heart Disease, Study Finds Stents Might Be No Better Than Drugs” AJMC November 19, 2019

Revisiting readmission penalties for Total Joint Surgery
The Hospital Readmissions Reduction Program (HRRP), which began in 2012, is a Centers for Medicare and Medicaid Services policy that levies hospital reimbursement penalties based on excess 30- day readmissions of patients with 4 medical conditions and 3 surgical procedures. As part of the Patient Protection and Affordable Care Act, the HRRP has evolved as a core element of national health policy, increasing its maximum penalty from 1% to 3% of total Medicare inpatient payments. “In this case-control study of 143 Florida hospitals, with 2991 readmitted Medicare patients, hospitals with a high volume of elective total hip and total knee arthroplasty procedures had lower, but not significantly different, readmission penalties than those with low volumes of these procedures. No other systematic differences were detected across hospitals or readmitted patients…It seems that penalties for surgical readmissions under the Hospital Readmissions Reduction Program may be inversely associated with surgical volume, but this requires validation in a larger, nationwide cohort.”
.Li et al “Inaugural Readmission Penalties for Total Hip and Total Knee Arthroplasty Procedures Under the Hospital Readmissions Reduction Program”JAMA Netw Open. 2019;2(11):e1916008. doi:10.1001/jamanetworkopen.2019.16008; Centers for Medicare and Medicaid Services. Hospital Readmissions Reduction Program (HRRP).