California Needs Better Medicine:
Physician Supply and Medical Education in California

Too Many Specialists, Too Little Diversity, Poor Distribution

Sound planning for the future of medical education in California must consider current trends in physician supply and medical education in light of future physician-supply requirements (i.e., demand). This report reviews these trends and requirements and recommends steps that California's medical schools and residency programs should take to address the imbalance between physician supply and requirements.

FINDINGS

This report presents numerous findings regarding trends in the supply of physicians and mid-level practitioners in California and the implications of these trends for medical education and training. The findings include the following:

California has a more than an adequate supply of physicians.

In 1994, California's supply of active non-federal patient care physicians was 185 per 100,000 people, which represents the upper boundary of the Council on Graduate Medical Education's (COGME) estimate of physician supply requirements (145 to 185 per 100,000 population).

If California's rate of population growth slows as projected, by the Year 2020 California will have at least 18 percent more physicians than necessary.

Experts predict that California's population growth will slow, thereby generating a substantial excess supply of physicians. If California's population grows at the rate projected by the California Department of Finance, by the Year 2020 the State will have at least 18 percent more physicians than its population requires. This oversupply of physicians would be even greater, if the population grows more slowly than projected.

Patient care physicians are poorly distributed across the state; excess supply in some regions accompanies shortages in others.

Four regions within California have excess supplies of physicians (Bay Area, Central Coast, Los Angeles, Orange County). Three regions have adequate supplies (North Counties, North Valley/Sierra, San Diego/Imperial, ) and three have shortages (Central Valley/Sierra, Inland Empire, South Valley/Sierra). The region with the highest ratio of physicians to population (Bay Area), had a ratio twice that of the region with the lowest ratio (South Valley/Sierra). In general, large metropolitan areas had higher ratios than rural agricultural and mountain areas. With only one exception, the relative distribution of physicians across regions remained stable between 1981 and 1994. (See Appendix A for a list of counties in each region.)

California has 20 to 48 percent more specialists than it requires.

Six regions in California have excess supplies of specialists (Bay Area, Central Coast, Los Angeles, North Valley/Sierra, Orange County, San Diego/Imperial). The North Counties region has an adequate supply of specialists. Three regions have inadequate supplies of specialists (Central Valley/Sierra, Inland Empire, South Valley/Sierra). The Bay Area has the highest concentration of specialists, with an excess supply of 50 to 85 percent. Large metropolitan areas are more likely to have an oversupply than are rural agricultural and mountain areas.

In contrast, most regions in California have inadequate to barely adequate supplies of generalist physicians.¹

Six regions in California have shortages of generalist physicians (Central Valley/Sierra, Inland Empire, North Counties, North Valley/Sierra, San Diego/Imperial, and South Valley/Sierra). The four remaining regions have adequate supplies of generalists (Bay Area, Central Coast, Los Angeles, Orange County). No region has an oversupply of generalists. This shortage of generalists is especially acute in inner-city and rural areas, including inner-city and rural areas within regions that have adequate supplies of generalists at the regional level. As a result, the federal government has designated that 124 inner-city and rural areas across the state have shortages of generalists.

African-Americans and Latinos are underrepresented among California's physicians.

African-Americans account for 7 percent of California's population but only 3 percent of physicians. This disparity is even more pronounced for Latinos, who comprise 26 percent of the state's population but only 4 percent of physicians. Given current demographic trends, these disparities will grow unless the number of African-American and Latino physicians increases dramatically.

On balance, California's medical schools and residency programs are producing too many specialists and too few Latino and African-American physicians.

REASONS FOR PUBLIC CONCERN ABOUT PHYSICIAN OVERSUPPLY

There are two fundamental reasons why physician oversupply concerns experts and the general public alike. First, federal and state governments expend significant public resources on the education and training of physicians. An oversupply of physicians means that our government is spending public dollars to produce physicians who are not necessary. This is an inefficient use of scarce taxpayer resources. Second, many experts believe that physician oversupply increases health care costs, burdening the economy and public budgets, and making health care less accessible.² Some people argue that this problem has subsided with the emergence of managed care and its various methods of containing health care costs.³ Although some evidence suggests that managed care systems reduce unnecessary service provision by physicians, there is no conclusive evidence that managed care completely eliminates the problem of oversupply, particularly given that much of the growth in managed care enrollment has occurred in preferred-provider plans and other forms of managed care that do not tightly manage use of physician services.

RECOMMENDATIONS

As major sources of physicians practicing in California, the state's medical schools and residency programs play a critical role in meeting California's physician supply requirements. For more than 15 years, experts have sounded the alarm about the impending oversupply of physicians, particularly specialists. Despite these warnings, the Legislature and Governor's numerous efforts to use state funding as a vehicle for reform, and the restructuring of health care financing and delivery, California's medical schools and residency programs have been slow to respond to this urgent situation. As a result, the long-predicted oversupply of physicians is now a reality in many parts of the state. The state's medical schools and residency programs must accelerate their response, if California is to minimize the substantial costs associated with massive physician oversupply.

The highest priority must be placed on reducing the number of specialists trained in California. Increasing the number of generalists without simultaneously decreasing the number of specialists will not meet the state's future requirements. Medical schools and residency programs should also take additional steps to address the poor geographic distribution and lack of racial/ethnic diversity of California's physicians.

Specifically, the report recommends the following actions:

Medical Schools:

• Freeze medical school enrollment at the current level.
• Maintain efforts to encourage medical students to pursue generalist careers.

Residency Programs:

• Immediately reduce the number of specialist residency positions by at least 25 percent.
• Maintain the number of generalist positions at the current level, and provide adequate resources to support these positions.

Medical Schools and Residency Programs:

• Expand opportunities for medical education in underserved areas.
• Increase enrollment of underrepresented minorities in medical school and residency programs.
• Establish a mechanism for implementing these recommendations on a statewide basis.

Each of these recommendations is discussed in detail:

Medical Schools

Freeze medical school enrollment at the current level.

Enrollment in California's allopathic and osteopathic medical schools should not be increased. California already has a more than adequate supply of physicians. California's rate of population growth is expected to slow over the next several decades, reducing demand for physician services. There is no evidence that increasing the number of medical students would improve the distribution of physicians within the state. At the national level, medical school enrollment is now nearly double what it was in the 1960s, but the geographic distribution of physicians is less equitable today than it was 3 decades ago. Moreover, there is no reason for California to contribute to the national oversupply of physicians.

Maintain current efforts to encourage medical students to pursue generalist careers.

Providing opportunities for generalist training at the graduate level will not ensure an adequate supply of generalist physicians for California over the long-term. California's medical schools must continue to encourage students to choose generalist careers.

A student's experiences in medical school influence his or her choice of medical specialty. California's medical schools have developed a variety of strategies for promoting generalist careers. These efforts need to be evaluated, successful strategies reinforced, and new approaches tested. California's residency programs could absorb a large increase in the number of California medical school graduates entering generalist positions. Approximately 400 California medical school graduates enter generalist training programs each year. This figure is much lower than the 1,117 first-year generalist positions available in California.

Residency Programs

Immediately reduce the number of specialist residency positions by at least 25 percent.

Most regions of California have an oversupply of specialist physicians. Significant cuts in the number of specialist residency positions are necessary to bring the state's future supply of specialist physicians in line with future requirements, particularly as the projected rate of overall population growth in California slows relative to that experienced during the past decade. An immediate 25 percent reduction in the number of specialist residency positions is required to bring the state's supply of specialists per population to the middle of the COGME requirements band by the Year 2020.⁴ Even deeper cuts are needed to bring specialist supply in line with requirements before 2020.

The University of California (U.C.) has developed a plan for reducing the number of specialist residents trained in programs affiliated with U.C..⁵ However, the reductions proposed in the U.C. plan are inadequate to meet future requirements. The U.C. plan calls for only a 15 percent reduction in U.C. specialist residents by the Year 2002, whereas an immediate 25 percent reduction is necessary to bring supply in line with requirements by the Year 2020. In addition, the U.C. plan applies only to U.C.-affiliated specialist residency programs and does not address programs that are operated independently or affiliated with private medical schools.

The few regions that have an undersupply of specialist physicians are rural agricultural and mountain areas where high rates of poverty and geographic isolation hinder the recruitment of specialists from oversupplied metropolitan areas. To improve access to subspecialty services in rural communities, California's academic health centers should expand referral networks and telemedicine services.

Maintain the number of generalist⁶ positions at the current level, and provide adequate resources to support these positions.

California should not reduce its total number of generalist residency positions. Most regions of the state have inadequate to barely adequate supplies of generalist physicians. Undersupply of generalists plagues some metropolitan areas as well as many rural areas across the state. California's generalist residency programs are the major source of generalist physicians for the state and these programs must be preserved.

Although the conversion of a small number of specialist residency positions to generalist positions would be consistent with future requirements, a substantial increase in the number of generalist residency positions in California does not seem prudent. In most regions, the gap between the current supply and requirements for generalists is relatively small. In addition, much uncertainty exists regarding future requirements for generalist physicians. Some experts predict that in the future advanced practice nurses, physician assistants, and other non-physician providers will be used more extensively to provide medical services. If this prediction is correct, demand for generalist physicians will drop appreciably. Moreover, increasing the number of generalist physicians trained in the state will not address the isolation and poor reimbursement that impede the recruitment and retention of generalist physicians in low-income rural and inner-city areas.

Medical Schools and Residency Programs

Expand opportunities for medical education in underserved areas.

Thirty years' experience suggests that overproducing physicians does not alleviate physician shortages in low-income rural and inner-city areas. One strategy that has mitigated these shortages across California as well as the nation has been the development of training opportunities in underserved communities for medical students and residents.⁷ Although there is a national market for physicians, many physicians choose to practice medicine in the communities where they have trained, particularly communities in which they complete residency training. Each of California's medical schools has developed medical student and resident training opportunities in underserved communities. Opportunities like these should be expanded. First priority should be given to areas that have the most severe shortage of physicians and which currently lack medical student or resident training programs, such as rural communities in the Central Valley and the Inland Empire. In order to maintain a pipeline of applicants for residency programs in underserved communities, all training opportunities in underserved communities should encompass undergraduate clerkships as well as residency programs and rotations.

Increase enrollment of underrepresented minorities in medical school and residency programs.

Underrepresented minority physicians play a major role in meeting the health care needs of underrepresented minorities in California, especially those living in low-income communities.⁸ Yet, there are far too few underrepresented minority physicians. Moreover, the number of underrepresented minorities in the state, especially Latinos, is increasing more rapidly than the number of non-Latino whites. As a result, the gap between the racial/ethnic composition of the physician workforce and the state's population will grow unless the number of underrepresented minority medical students and residents increases significantly. California's medical schools and residency programs have made progress toward increasing the number of underrepresented minority physicians, but parity with the population is a long way off. Recent trends are particularly inauspicious. From 1995 to 1996, enrollment of underrepresented minorities among entering students decreased by 20 percent in U.C. medical schools and by 16 percent in private medical schools.⁹ Proposition 209 and the recent decision of the U.C. Regents to end affirmative action, if upheld by the judiciary, threaten recent progress in this area, especially for U.C. medical schools.

Establish a mechanism for implementing these recommendations on a statewide basis.

At present, the only medical schools and residency programs in California subject to direct public oversight at the state level are U.C. schools and programs. Although the U.C. system educates more medical students and residents than any other institution in California, it is not the only one. Roughly 44 percent of California's residents and 47 percent of its medical students are enrolled in programs that are not affiliated with the U.C. system. Thus, state policies directed expressly toward the U.C. system are not sufficient to ensure that all of California's medical schools and residency programs collectively will produce an appropriate number and mix of graduates to meet the state's future requirements.

State officials should develop a mechanism for coordinating action among all medical schools and residency programs in the state. The experience of other states may be instructive in this endeavor. For example, New York is developing an all-payer system for funding graduate medical education. This system creates incentives for public and private residency programs alike to reduce the total number of residents trained, to increase the percentage of positions in generalist disciplines, and to increase training in ambulatory care sites and underserved areas.¹⁰ State officials should consider adapting such mechanisms for use in California.

References

1 This report uses the Council on Graduate Medical Education's (COGME) definition of generalists (family practitioners, general internists, general pediatricians, and general practitioners) to facilitate comparison with COGME's physician supply requirements bands.

2 Institute of Medicine. The Nation's Physician Workforce: Options for Balancing Supply and Requirements. (Washington, DC: National Academy Press, 1996). F. Mullan, R. Politzer, D. Davis. International Medical Graduates and American Medicine. JAMA. 273(1995):1521-1527.

3 UE Reinhardt. Planning the Nation's Health Workforce: Let the Market In. Inquiry. 31(1994): 250-263.

4 The COGME requirements band for specialists in 1995 equals 85 to 105 per 100,000 population. The band rises slightly to 90 to 110 per 100,000 population in Year 2020 to accommodate the aging of the U.S. population. Reducing specialist positions by 25 percent while maintaining generalist positions at the current level would increase the percentage of generalist positions to 49 percent from 41 percent of total positions.

5 University of California Office of the President. Changing Directions in Medical Education. (Oakland, CA: University of California Office of the President, 1996 edition).

6 See footnote #1 for the definition of "generalist" used in this report.

7 L Crandall, and others. Recruitment and Retention of Rural Physicians: Issues for the 1990s. Journal of Rural Health. 6(1990):19-38. HK Rabinowitz. Recruitment, Retention, and Follow-up of Graduates of a Program to Increase the Number of Family Physicians in Rural and Underserved Areas. New England Journal of Medicine. 328(1993):934-939. AH Streinick, and others. Assessing the Impact of a Title VII Residency Program on Specialty Choice and Practice Location. (Washington, DC: Office of Health Policy, Analysis, and Research, Health Resources and Services Administration, 1994). JE Verby, and others. Changing the Medical School Curriculum to Improve Patient Access to Primary Care. JAMA. 266(1991):110-113.

8 M. Komaromy, and others. The Role of Black and Hispanic Physicians in Providing Health Care for Underserved Populations. New England Journal of Medicine. 334(1996):1305-1310.

9 Association of American Medical Colleges. Applicant Pool Sees Fourth Record Year, But Minority Enrollment Declines. AAMC Stat. November 11, 1996. (weekly electronic newsletter)

10 New York Adopts New GME Funding System. Front & Center: Leading the Health Professions into the Next Century. 1(2): Fall 1996. Published by the Center for the Health Professions, University of California, San Francisco.