Forecasting the Supply and Demand for Physicians in California Through 2015:

1. Forecasting the Supply and Demand for Physicians in California Through 2015: Results of the Study by the Center for Health Workforce Studies, University at Albany Presentation to: University of California Office of the Vice President – Health Affairs July 14, 2004 Oakland, California Edward Salsberg Center for Workforce Studies Association of American Medical Colleges And Gaetano Forte Center for Health Workforce Studies University at Albany

2. Overview of Presentation 1. The Demographic Forecast2. The Physician Workforce3. The Forecasting Methodology and Assumptions4. The Findings

3. Project Goals • To create a demographic profile of California’s population in 2002 and 2015 • To compile a current profile of physicians practicing in California • To identify and discuss factors affecting the California’s physician supply in the coming decade

4. Project Goals(cont.) • To identify and discuss the factors affecting demand for physicians services in California through 2015 • To forecast and compare future physician workforce supply and needs (under 2 scenarios) in California through 2015 • To advise UC on the steps necessary to better ensure an adequate supply of physicians in California through 2015

5. Demographic Profile of California

6. California Population • 34.7 million (as of 2000) • About 12% of Americans • California population increased by 15.7% between 1990 and 2000 (compared to 13% for U.S.) • The population of California is projected to increase by 7.5 million (22%) between 2000 and 2015

7. Projected Population Growth in California, 2000-2015 Source: California Department of Finance

8. Projected Growth in Population 65 Years of Age and Greater in CA, 2002-2015 65+: 37% increase from 2002 to 2015 85+: 38% increase from 2002 to 2015 Source: CA Department of Finance, 1998

9. Projected Population Growth by Region, 2000-2015 Source: California Department of Finance

10. Projected Population Change by Age Group, 2000-2015 Source: California Department of Finance

11. Racial/Ethnic Composition of California: 1990, 2000, and 2015 Source: California Department of Finance

12. The Current Physician Workforce

13. Number of Physicians in California by Activity, 2002 Source: AMA Physician Masterfile, 12/2002

14. Gender of Active Patient Care Physicians in California by Age, 2002 21,668 26% 16,919 15,738 15% 36% 74% 10,610 85% 8% 4,317 64% 92% 46% 54% Source: AMA Physician Masterfile, 12/2002

15. Race/Ethnicity of Active Patient Care Physicians in California Compared to California Population, 2002 Sources: AMA Physician Masterfile, 12/2002; California Department of Finance

16. Location of Medical Education of Active Patient Care Physicians in California, 2002 Source: AMA Physician Masterfile, 12/2002

17. California Physician Supply and Demand Forecasting: Methodology

18. California Physician Supply and Demand Forecasting: General Approach • Develop simple forecasting model for physician supply • Use existing forecasting model for physician demand • Use historical data to inform forecasting models • Develop alternative scenarios to supplement baseline forecasts • Assumes supply equals demand in base year

19. California Physician Supply Forecasting Model Details Physician Supply Model Components • Current active physicians • New entrants • Graduate year 1 residents • In-flow from other states • Separations • Retirements • Deaths

20. California Physician Supply Forecasting Model Details (cont.) Physician Supply Model Equation: Current year’s active physician supply = Prior year’s active physician supply + New Entrants and In Migration - Retirements and Deaths

21. California Physician Supply Forecasting Model Details (cont.) Assumptions • Entrants: 1900 graduate year 1 physicians annually (based on actual average annual graduate year 1 physicians in CA between 1996 and 2002) • In-Flow: 900 other physicians initiating practice in CA annually (based upon historical estimates of non graduate year 1 physicians initiating practice in CA between 1996 and 2002)

22. California Physician Supply Forecasting Model Details (cont.) Assumptions (cont.) • Retirements: CA physicians will retire at the same rate as physicians retired nationally in the past (estimated retirement rate grows from 0.87% to 1.22% between 2002 and 2015 due to aging of physician workforce) • Deaths: Physician death rates in CA will mirror national physician death rates (estimated death rate grows from 0.37% to 0.45% between 2002 and 2015)

23. California Physician Supply Forecasting Scenarios

24. California Physician Demand Forecasting Details • Application of the HRSA Physician Demand Model (PDM) • Demand forecasts consider: • Population distribution (CA Dept of Finance) • Trends in population demographics (CA Dept of Finance) • Insurance coverage (US Census; Baumgarten 2002; California Health Interview Survey 2001) • Utilization rates (by Race/Gender/Age/Specialty) (PDM) • Contribution of non-physician clinicians (PDM)

25. California Physician Demand Forecasting Details Assumptions • Use rates remain constant over time (baseline data derived from national data - 2003 update of the PDM) by age, gender, insurance status, & setting. • Physician productivity (time spent with a patient) remains constant over time (baseline data from national 2003 update of physician requirements – PARM) • Physician demand equals supply in 2002

26. California Physician Demand Forecasting Insurance Environments Physician demand was forecast in two distinct insurance environments: • Constant Insurance Environment: current levels of health insurance remain over forecast period • Expanded Insurance Environment: universal health insurance/other barriers to care removed; historically uninsured use physician services similarly as historically insured

27. California Physician Demand Forecasting Scenarios

28. California Physician Demand Forecasting Scenarios (cont.)

29. California Physician Supply and Demand Forecasting: Findings

30. California Physician Supply: 2002-2015Total Physicians per 100,000 Population

31. California Physician Demand: 2002-2015 (Constant Insurance Environment) Total Physicians per 100,000 Population

32. California Physician Demand: 2002-2015 (Expanded Insurance Environment) Total Physicians per 100,000 Population

33. Percent Difference between Physician Demand and Supply Growth, 2002-2015 Red values in parentheses indicate physician surpluses.

34. Percent Difference between Physician Demand and Supply Growth 2002-2015, cont.

35. Absolute Difference between Physician Demand and Supply Growth, 2002-2015 Red values in parentheses indicate physician surpluses.

36. Physician Supply and Demand in California, 2015: Supply Scenario 1Baseline Constant Insurance Environment

37. Physician Supply and Demand in California, 2015: Supply Scenario 2Lifestyle Changes Constant Insurance Environment

38. Physician Supply and Demand in California, 2015: Supply Scenario 3Productivity Increases Constant Insurance Environment

39. Physician Supply and Demand in California, 2015: Supply Scenario 4Lifestyle Changes/Productivity Increases Hybrid Constant Insurance Environment

40. Absolute Difference between Physician Demand and Supply Growth, 2002-2015 cont.

41. Physician Supply and Demand in California, 2015: Supply Scenario 1Baseline Expanded Insurance Environment

42. Physician Supply and Demand in California, 2015: Supply Scenario 2Lifestyle Changes Expanded Insurance Environment

43. Physician Supply and Demand in California, 2015: Supply Scenario 3Productivity Increases Expanded Insurance Environment

44. Physician Supply and Demand in California, 2015: Supply Scenario 4Lifestyle Changes/Productivity Increases Hybrid Expanded Insurance Environment

45. Mean Difference between Physician Demand and Supply Growth, 2002-2015

46. Options for Addressing Physician Shortages • Increase the Supply of Physicians in State • Increase medical school capacity • Increase GME capacity • Incentives for in-migration • Incentives to keep physicians in practice • Other Approaches • Expand Use and supply of NPs, PAs and others • Invest in IT and other technologies • Increase utilization review and monitoring

47. Other Policy Options for California to Address Physician Workforce Needs • Programs and policies to increase diversity • Programs and policies to address major geographic mal-distribution of physicians • Develop systems to assess and monitor physician workforce supply, demand and need

48. Conclusions • California is likely to face moderate to significant shortages of physicians in the next decade • Even if these shortages are moderate statewide, they are likely to be severe in some communities and in some specialties • There are a number of steps the state can take to increase the supply of physicians and to address the geographic mal-distribution of physicians • Tracking the supply, demand and need for physicians combined with tools to address likely gaps are critical if California is to assure access to care for its citizens in the coming decades