How to rebalance the supply-demand scales in healthcare

Good business is based on simple economics: a successful balance of supply and demand. Consumers want or need a good or service, and businesses provide those goods or services in a way that satisfies consumers and keeps them coming back for more.

But when the balance between supply and demand is askew, businesses fail and consumers suffer.

The American healthcare system is dealing with a serious supply-demand crisis. The demand for care is increasing exponentially thanks to a growing consumer base, an aging population, and a changing marketplace. Meanwhile, the supply of adequate care is insufficient. Healthcare costs for consumers have steadily risen, and patients are becoming increasingly dissatisfied with the care they're receiving. The industry is on the verge of a breakdown.

While a quick fix isn't in the cards, there are a few things the medical field can do to help stabilize the scales. Restoring the balance between supply and demand in healthcare simply requires a deeper look at the causes of the problem and a few adjustments to correct them.

Getting to the root of the problem

The demands on the American healthcare system are borderline insurmountable.

For starters, there's a greater demand for care from the country's aging population. The U.S. has about 46 million residents over the age of 65 — a figure that's expected to nearly double by 2060 as the baby boomers mature. Within this massive population, a staggering 92 percent have one or more chronic health conditions that will require regular care.

Further complicating matters, the Affordable Care Act enabled about 20 million previously uninsured Americans to acquire health insurance. The ACA dropped the uninsured rate to a historic low, but it simultaneously flooded an already overwhelmed system with new patients — many of whom have pre-existing conditions.

There are simply not enough doctors to keep pace with the growing demand. Because of the way physician residencies are funded, most teaching hospitals set residency caps back in 1997 and have not adjusted them since. These caps have created a serious physician shortage throughout the U.S.

The Association of American Medical Colleges recently projected a physician shortage of up to 90,000 doctors by 2025. With about 4 million baby boomers reaching the age of 65 annually through 2030, the supply disparities will only worsen. Demand will continue to skyrocket.

Without adequate staff to meet care needs, patient health could suffer. Organizations might have to prioritize certain patients, attending to the most urgent cases first and sacrificing preventive care appointments that drive down healthcare costs. Wait times for appointments could grow unreasonably long, forcing more patients to rely on costly emergency care or forgo medical visits altogether.

Healthcare facilities, urgent care practices, private businesses, and companies with corporate clinics are all experiencing the pinch of the shortage. It's difficult to recruit employees — particularly in a rural setting — because of the high demand across the board and the limited supply of providers. Many clinics and hospitals have turned to third-party organizations for temporary staffing assistance to ensure they're able to keep up with patient demand and provide services.

It's easy to forget that healthcare facilities are businesses. These companies must have doctors and nurses on staff if they want to generate revenue. They're effectively losing billable resources, which is a frightening prospect for any company.

Resetting the scales

Something clearly must be done to correct the dangerous path of the American medical system. It must begin with healthcare organizations taking action to decrease staffing pressures and better serve their patient populations. Some potential solutions include:

Hiring more physician assistants and nurse practitioners. Adding physician assistants and nurse practitioners to a staff is a practical and economical way to fill gaps during a physician shortage — especially when the need is for primary care. PAs and NPs are able to significantly ease physicians' workloads by handling routine and preventive care appointments. Studies have found that PAs and NPs can reduce healthcare spending and increase patient satisfaction.

Incorporating telemedicine. Telemedicine provides a new way to connect physicians and patients, increasing the number of patients under a physician's care and reducing wait times. It is particularly helpful in underserved and rural areas, where physicians can teleconference with patients rather than meet with them in person. Telemedicine also offers a great option for second opinions or consultations with specialists throughout the world.

Embracing locum tenens. Healthcare organizations increasingly have turned to locum tenens to fill open positions, with temporary physicians becoming prevalent in areas hit hard by shortages. Locum tenens physicians offer immediate relief to organizations while management seeks a permanent hire. Physicians who have specialized training and unique skill sets often are more inclined to take temporary work in rural or underserved areas than to accept a permanent position. It's a solution that ensures patients have access to care while organizations continue to generate revenue.

Increasing residency positions. One of the more obvious solutions involves increasing the number of residency positions at teaching hospitals across the country, though this would require either a greater financial contribution from states and healthcare facilities or a change to federal funding allocations. Lawmakers introduced the Training Tomorrow's Doctors Today Act to the U.S. House of Representatives in early 2016, seeking federal support to train 3,000 more resident physicians each year. So far, there has been no additional action to move this legislation forward.

Supply and demand in healthcare are incredibly askew, and predictions point to the situation getting much worse in the coming years. But an influx of patients and a shortage of physicians doesn't have to cripple the industry. By embracing auxiliary care professionals and locum tenens staffing, using telemedicine, and pushing for more residency positions, the healthcare industry can restore some balance. This move will allow hospitals and clinics to better serve their patients and generate the revenue necessary to endure.

Rob Indresano is president and COO of Barton Associates, a national recruiting and staffing firm based in the Boston area that specializes in temporary healthcare assignments. Rob is responsible for managing operations and the company's strategic vision. Before joining the Barton team, Rob was vice president and general counsel for Oxford Global Resources Inc. and corporate counsel for Oracle Corp.

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