Increasing the Physician Workforce While Improving Care Delivery: Physician Shortage Demonstration

Health Care Issue
Because of a chronic and growing shortage of physicians practicing in most specialties, Texans in the border region confront inadequate access to care.  A major factor contributing to the shortage is the limit on Medicare funding for the training of physicians.  HPG, working with a South Texas medical center serving the border region, developed an approach to increasing the number of physicians trained in its hospital system while improving care in a troubled border region.

HPG Approach
HPG originated and developed the concept of a multi-year Medicare demonstration project aimed at alleviating the physician shortage in the border region through increasing the number of physician residents whose training would be paid by Medicare.  Challenged by the Federal requirement that all demonstrations must be “budget neutral,” HPG developed the policy rationale and analytic tool to prove the demonstration would not cost Medicare additional money.  The solution had the additional benefit of addressing a major public health problem in the border region, the high prevalence of diabetes.  By incorporating instruction in diabetes disease management into the physician resident training experiences conducted under the demonstration, HPG reasoned that the disease management services subsequently provided by these physician residents would improve care for diabetes patients and reduce their need for costly hospitalizations.  This in turn would generate Medicare savings sufficient to offset any additional Medicare spending for training the higher number of physician residents.  Budget neutrality in fact could be addressed and overcome.

HPG helped write the proposal documents conceptualizing the demonstration.  We secured both White House support and approval from the Centers for Medicare and Medicaid Services for the demonstration.  Since the demonstration was unsolicited—it was neither a response to a RFP, nor conceived as a congressionally mandated study—overcoming a rigorous analytic approval process was the first and most important test of the idea’s merit.