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From the March 1997 ACP Observer, copyright © 1997 by the American College of Physicians.

Too many doctors?

Predictions that the United States faces a vast oversupply of physicians if the nation moves to an all managed-care health system may be exaggerated.

In a study done under the aegis of the federal Bureau of Health Professions, researchers examined physician staffing ratios in two large, established, staff-model HMOs and found that they provided 180 physicians per 100,000 enrollees, "which is near the national average and far above figures that typically are reported in the literature." The researchers concluded that the nation probably does not need some of the "severe corrective remedies" to the physician oversupply problem that have been proposed.

The HMOs studied were made up of 43% generalist physicians (defined as general internists, family practitioners and general pediatricians), compared to 36% in the nation as a whole. The majority of the two HMO's generalist physicians were family practitioners; 26% were general internists and 20% were general pediatricians. HMOs also employed a higher ratio of nurse practitioners and physician assistants in primary care but used fewer psychiatrists and surgeons.

The results appeared in the January/February issue of the policy journal Health Affairs.

In a separate study supported by the Agency for Health Care Policy and Research and published in the Sept. 4, 1996, issue of The Journal of the American Medical Association, researchers found that the marketplace is doing significantly less recruiting of doctors, compared to five years ago. This is not only true for specialist physicians but also to a lesser degree for generalists. The most dramatic changes occurred in the number of internal medicine specialist positions advertised from 1990 to 1995, which fell by 75%.

States limiting marketing of Medicaid HMOs

In an attempt to protect Medicaid recipients from heavy HMO marketing, many states are requiring HMOs to submit their marketing plans for approval and prohibiting direct solicitation of potential enrollees.

More than 90% of the 33 states contracting with Medicaid HMOs regulate their marketing, according to a survey of state Medicaid programs by Atlantic Information Services and Integrated Healthcare Service. While states have encouraged and sometimes required Medicaid beneficiaries to join HMOs, officials nonetheless fear HMOs will take advantage of the vulnerable population.

New or Medicaid-only HMOs complain that the marketing restrictions give larger and older HMOs, which already enjoy high name recognition, an unfair advantage.

Managed care scores low on credibility survey

Only 10% of Americans think that the managed care industry can be trusted.

According to a survey of 1,100 Americans, only 10% ranked information that comes from the managed care industry as believable, and almost half said it was unbelievable. That puts managed care below industries like computer software, pharmaceutical manufacturers and even airlines on the credibility scale. HMOs and PPOs did fare better than tobacco manufacturers, which were identified as "not very believable" by 77% of respondents. In answering the survey, respondents ranked industry believability on a scale of one to five, with scores of four and five charted as "believable" and of one and two as "not believable."

Health care costs on the rise—but modestly

Two different consulting firms are predicting that health care costs for employers will rise slightly more than inflation this year.

A Foster Higgins survey released in late January showed that the average cost of health benefits per employee rose 2.5% last year to $3,915. The company predicts that next year, costs could rise 4%. According to a report in The Wall Street Journal, prices remain on the upswing as managed care companies show sagging profits, providers consolidate their operations and as consumers continue to resist some of the more drastic cost-cutting measures of the last few years.

Towers Perrin, meanwhile, predicts the average overall increase for active employees will be about 3% in 1997, up from 4% last year. But it found wide variation in how much more employers were paying for health benefits. For instance, while 12% of the respondents reported 1997 cost increases for active employees in excess of 10%, 15% reported declining costs.

The survey also found that employees will continue to pay a significant and growing share of the costs of health coverage. On average, employees will contribute 6% more this year than last, paying for about 20% of the cost of their individual coverage.

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