California and the nation are experiencing a physician shortage that is reaching crisis proportions and negatively impacting patient access to health care. On February 16, 2023, the U.S. Senate Health, Education, Labor Pensions (HELP) Committee held its first hearing of the year, which focused on this looming crisis. The committee has since put out a Request for Information (RFI) from stakeholders on the root causes of and potential legislative solutions to the health care workforce shortages.

The California Medical Association (CMA) is extremely concerned with the health care workforce challenges facing California and the nation and the impact it is having on patient access to high quality and affordable care. In response to the HELP Committee RFI, CMA provided a perspective on government policies and market forces that have reduced the physician workforce and presented four top priority solutions to increase the nation’s physician workforce to meet the growing, aging patient population, and reduce patient obstacles to care.

CMA told the committee that the following four actions will significantly improve the current and forecast physician workforce shortages by reducing burnout and administrative burdens, and helping physician practices remain solvent to prevent early retirement, and increasing the physician workforce pipeline to replace aging physicians

1. Implement prior authorization reforms in Medicare advantage and ERISA plans regulated by the federal government. Physicians need meaningful improvements to prior authorization programs that have unnecessarily burdened physician practices and dangerously delayed care for patients. Health plan prior authorization red tape undermines health care outcomes by creating unnecessary obstacles for physicians to help patients to get the care they need, when they need it.
2. Update the Medicare physician fee schedule to keep pace with practice costs and allow more physicians to participate in a greater variety of alternative payment models. Medicare physician payments have failed to keep pace with the rising costs of running a medical practice. When adjusted for inflation in practice costs, Medicare physician pay has effectively declined 26% from 2001 to 2023. The low Medicare payments are creating instability in physician practices, and more physicians are starting to retire early, not accept new Medicare patients, or leave the program over the low payments.
3. Increase Medicaid payment rates by increasing federal matching funds in regions with high Medicaid enrollment to maintain safety net physician practices and protect patient access to care. Physicians practicing in high Medi-Cal enrollment areas are leaving or retiring early because those regions do not have the private payer mix to help physicians sustain high Medicaid patient caseloads. To maintain this important safety net physician workforce and improve access to care for our neediest patients, CMA recommends that Congress increase the federal matching rate in regions with high numbers of Medicaid patients.
4. Lift the cap on the number of Medicare graduate medical education (GME) residency training positions to open the physician pipeline to replace the aging physician workforce. The cap on residency training positions was set in 1997—and represents a significant bottleneck in the pipeline. Despite a growing and aging population, that cap has not changed in more than 25 years. Although medical school enrollment has grown by more than 30% in California, there are not enough residency positions for aspiring physicians to complete their training. The U.S. is 14,000 residency positions short.

Medical practices across the country are experiencing unprecedented financial pressures stemming from higher staffing needs, rent, and other practice costs due to record-setting rates of inflation, the ongoing COVID-19 recovery, and significant administrative burden. At the same time, physician practices are seeing their payments eroded year-after- year due to budget neutrality adjustments. It is no surprise that one in five physicians are considering leaving their practice within two years due to the stress of running a medical practice, including increased financial pressures and administrative burdens.

Our nation needs highly trained and experienced physicians, and CMA believe these recommendations will increase the supply of physicians to provide safe, high quality, and lower cost care to meet our nation’s growing health care needs without expanding scope of practice for allied practitioners.

For more information, see CMA’s complete recommendations to the HELP committee.