The missing variable: The effect of physician replacements on healthcare spending

The United States spends more on healthcare than comparable nations, with a spending gap that has markedly increased over the last forty years. However, this additional spending has not translated into better health outcomes for Americans, with the U.S. lagging behind other similar nations.While health policy experts and economists have written volumes analyzing the deficit between U.S. spending and health quality measures, one variable is always missing: the replacement of physicians by nonphysician practitioners.

Fewer physicians, more nonphysician practitioners

The United States has fewer practicing physicians per capita than most developed nations, ranking 24th of 28 countries with just 2.56 physicians per 1,000 people. The only countries ranking worse than the U.S. are Canada (2.46 physicians per 1,000), Poland (2.24), Mexico (2.17), and Korea (2.16). For contrast, the top physician ratios occur in Austria (4.99 doctors per 1,000), Norway (4.31), Sweden (4.13), Germany (4.04), Switzerland (4.04), Italy (3.81), and Spain (3.69).

Not only do we not have as many physicians in the U.S. compared to other similar nations, but we are failing to keep up with the production of new doctors. The United States ranks 30th out of 35 industrialized countries in producing medical school graduates, graduating only 7.26 new doctors per 100,000 population in 2013, compared with countries like Ireland, (20.13/100,000), Denmark (18.38), Australia (15.44), and Austria (14.85). While the U.S. has increased the number of medical schools by 28% since 2003, residency slots, the final required stage of physician training, have remained flat due to a cap in payment support from the government, which has been frozen into place since 1997. Although experts have decried a physician shortage for years, legislative action has failed to increase the residency slots required for physician licensure.

Rather than training more physicians, U.S. health policy has instead incentivized the training and use of nonphysician practitioners. While the U.S. lags behind other countries with the number of physicians, it leads the world in nonphysician practitioners, with 40.5 nurse practitioners and 40 physician assistants per 100,000 population.

Expansion of nonphysician roles

Originally created in 1965 by physicians, the nurse practitioner and physician assistant professions were specifically designed to bring primary medical care to underserved areas. However, over the last 40 years, these practitioners have increasingly assumed roles traditionally filled by physicians.Beginning in the 1970s, healthcare policy has incentivized the growth of both professions, funding training programs and mandating the hiring of nonphysician practitioners in federally funded rural health clinics.By 1987, the federal government had spent $100 million on nurse practitioner training programs, and in 2010, the Affordable Care Act further expanded the role of nurse practitioners, creating nurse-led clinics. By 2020, nearly half the states in the Union had granted nurse practitioners the right to practice independently without physician supervision, with North Dakota recently becoming the first state to grant physician assistants the same privilege.

What impact has this physician replacement had on patient health and cost?

We simply don’t know. While studies have shown that nonphysician practitioners can provide safe and effective care when treating low-risk patients and working under physician supervision or following physician-created protocols, no quality studies have ever been done to evaluate care provided by non-physicians practicing independently. And while many states have granted nurse practitioners the legislative authority to practice medicine for years, studies on patient outcomes in these “full practice authority” states are glaringly absent.

The effect of nonphysician practitioners on healthcare costs

In addition, there is evidence that the rapid growth of non-physician practitioners over the last forty years may be a factor in the rise in healthcare spending. Studies have shown that nurse practitioners and physician assistants may increase healthcare costs due to more utilization of health care resources, longer consultations and more follow-ups, increased clinical staff time, increased ordering of laboratory and radiology tests, unnecessary skin biopsies, more prescription medications, including unnecessary antibiotics, psychotropic medications, and opioids, and poorer quality of referrals to specialists.

These additional tests, procedures, and referrals can add up. In 2013, the Institute of Medicine estimated that “unnecessary services” added $210 billion to healthcare spending in the U.S., making it the single biggest contributor to waste. Unfortunately, additional healthcare utilization can also result in large profits for corporations and private equity firms, who have been particularly quick to replace physicians with nonphysician practitioners—and patients often don’t have a choice in who provides their care when they visit these facilities.

Can increased expenses be offset by lower salaries for non-physician practitioners? Probably not. One analysis in the United Kingdom found that employing a nurse practitioner is likely to cost as much or more than a primary care physician. And while in the past, non-physician salaries were significantly lower than that of physicians, the pay difference has markedly narrowed, with non-physicians now advocating for ‘pay parity’—to be paid the same as their physician counterparts. The state of Oregon already requires that insurance companies pay nurse practitioners and physician assistants the same rates as physicians.

It’s time for health policy experts—and the public—to wake up and question whether replacing physicians with nonphysician practitioners is healthy for the state of our nation.

Rebekah Bernard MD is a family physician and the co-author of the new book Patients at Risk: The Rise of the Nurse Practitioner and Physician Assistant in Healthcare.