Addressing Healthcare’s Workforce Crisis

Practicing medicine has always been difficult. Grueling training and extremely long hours have long been offset with a deeply fulfilling career. But the calculus has been changing meaningfully in recent years as both doctors and nurses leave the professional altogether. Understaffing increases the burden on the remaining workforce, exacerbating the problem.

People will point their fingers to many of the easy boogiemen, including private equity, regulation, unnecessary administrators, structural challenges in the US, and even the concept of capitalism. While many of these may be contributing factors, in most cases sufficiently incentivized private market actors will look to address challenges like these in the absence of regulatory hurdles. So then the question become what challenges are there and what regulatory hurdles must be overcome.

Among the more famous graphs in the space is the relative growth of administrators to physicians, shown below. Clearly the administrator are growing significantly faster than physicians. But it’s also noteworthy that physicians are growing faster than the US population (150% growth in physicians from 1975 to 2010, while the US population grew ~50% in the same period).

The growth of administrators is generally not the result of deprioritizing physicians, but the result of the changing practice of medicine - which, in turn, often leads to dissatisfied doctors. For example, increasing regulatory and compliance standards require a larger administrative workforce to satisfy billing, coding and privacy requirements. Patient records, billing, insurance claims and processing, scheduling, EHR data entry, holistic focus on the patient experience, and expanding IT systems all add non-physician requirements to the modern health system.

Despite best interests or intentions, however, nearly every item that adds the need for administrative overhead will also add at least some burden in the physician’s day-to-day as well. Thus, while the number of physicians has grown faster than the population, when normalized with the increasing complexity of delivering care in modern America and the decreased available time due to their administrative overhead, this trend turns negative.

It simply is not sustainable for doctors and nurses to continue to leave the profession. Even the greediest of hypothetical private-equity run rollups would understand this. Further, it is widely understood that physicians make money by actually delivering care, not through administration. Technology solutions, particularly AI, that decreases the need for physician overhead would be particularly welcome. This is indeed an area of active development, ranging from prior authorization to drafting preliminary diagnoses for radiology, to automating doctor’s notes and records. The continued evolution of these technologies across a wide variety of touch points will produce better tools that will become increasingly normalized.

Inevitably, technology will advance to a level where non-physicians can provide increased guidance and care in the medical context. Regulators should focus on what should be necessary to increase the prevalence and reliability of these tools. Providing an understood, realistic and attainable pathway is fundamental.

The practice of medicine will shift to one where AI can provide more and more reliable guidance to practitioners, and be more and more in the decision-making loop. Eventually, the quality of AI models will progress to a point where physicians move to more specialty areas and only non-physician practitioners need to be in the loop for certain forms of care. From a supply-demand perspective, this evolution should be welcome. As a society, we have constrained the number physicians in the workforce through exhausting and difficult standards and a limited number of slots. This increases the cost of care and increases burnout. We should strive to leverage technology as best as we can to leverage the best of what trained physicians offer while improving the underlying dynamics of the ecosystem through technology.