Recruitment of Physicians To Rural America: A View Through the Lens of Transaction Cost Theory

CONTEXT: Many rural hospitals in the United States continue to have difficulties recruiting physicians. While several studies have examined some of the factors affecting the nature of this problem, we know far less about the role of economic incentives between rural providers and physicians. PURPOSE: This conceptual article describes an economic theory of organization called Transaction Cost Theory (TCT) and applies it to rural hospital-physician relationships to highlight how transaction costs affect the type of contractual arrangement used by rural hospitals when recruiting physicians. METHODS: The literature is reviewed to introduce TCT, describe current trends in hospital contracting with physicians, and develop a TCT contracting model for analysis of rural hospital-physician recruitment. FINDINGS: The TCT model predicts that hospitals tend to favor contractual arrangements in which physicians are full-time employees if investments in physical or other assets made by hospitals cannot be easily redeployed for other services in the health care system. Transaction costs related to motivation and coordination of physician services are the key factors in understanding the unique contractual difficulties faced by rural providers. CONCLUSIONS: The TCT model can be used by rural hospital administrators to assess economic incentives for physician recruitment.     

Physician migration: a challenge for America, a challenge for the world

For five decades, medical education policy in the United States has been built around the expectation that, if too few physicians were produced, additional physicians would be available from other countries. That policy is examined in the context of the desire for an ever-increasing number of physicians who will provide an ever-expanding array of services in the future. This reality is juxtaposed against the realities that the medical education infrastructure in the United States has yet to respond to the projected needs of the future. Also, other countries have growing needs for English-speaking physicians, particularly the developing countries from which most such physicians migrate. I explore the history of physician migration to the United States, catalogue the countries of origin, examine the attitudes of current students and physicians about migration, and consider the consequences that are likely for donor countries if even higher levels of migration are stimulated. I conclude that the deepening shortages of physicians now being experienced in this country cannot be rectified without substantial increases in the flow of physicians from developing to developed countries. The challenges that this will create call for mutual understanding and a high degree of discipline and creativity among all countries if global health care needs are to be respected.     

Health Care in Canada: Lessons for the United States

This paper considers various aspects of the Canadian health care system and the implications for the improved delivery of rural health care in the United States. The major aspects examined are access to care, rural hospitals, and rural physicians. A search of the pertinent literature revealed a large amount of information concerning rural physicians in Canada, but less that dealt directly with rural hospitals and access to health care in rural areas. Universal access is the cornerstone of the Canadian health care system, which is operated by each province under certain mandates of the federal government, with both providing funding for the system. The diffusion of medical technology has been slower in Canada than in the United States, which is perceived by some as a major success of the system. Little distinction is made between rural and urban hospitals in Canada, with all hospitals funded by annual global budgets from the province, rather than by direct payment for each service provided. Funding for capital items must be requested separately. This method of reimbursement allows better planning in meeting the needs of each community. Physicians in Canada are mostly private practitioners who are reimbursed by fee for service. As in the United States, there has been difficulty in attracting physicians to rural areas. However, all but one province have incentive programs to encourage physicians to practice in underserved rural areas, with some having disincentives for those locating in overserved areas. Overall, the Canadian health care system has chosen to control costs by focusing on the provider rather than the consumer and appears to be more successful in providing access to health care in rural areas of the country.     

Health Status of the Rural Elderly

An enormous proportion of the worlds elderly live in rural areas and show wide variations in health status. Many, particularly those in the developing countries, are vulnerable to greater socioeconomic and health marginalization mainly due to inadequate provision of services and economic deprivation. As with the urban elderly, locomotor, visual and hearing disabilities, as well as life-threatening conditions of coronary heart disease, diabetes and hypertension are common among rural elders also. Infections continue to take a heavy toll in many parts of the world. Higher prevalence of health and functioning impairments and of risk factors like sedentarism and current smoking have been reported for the rural elderly in developed countries like the United States, where less frequent use of certain preventive services also has been observed among the rural elderly. The positive association of well-being and health with variables such as living with family, having children, and community involvement, which has been reported from developing countries like Ghana and India, supports the usefulness of the time-honored value of joint family systems and lifelong social and physical activity--all known to foster healthy aging. Such traditional virtues therefore need to be preserved and strengthened. Effective geriatric health care services need to stress a community approach to primary health care, with provision of support and training for both family caregivers and professionals. In addition, emphasis on health promotion, cost-effective indigenous systems of medicine and gender-sensitive programs is needed.     

Geographic Barriers to Child Health Services in Rural Northern New England: 1980 to 1989

Despite substantial recent increases in the number of rural physicians, it is unknown whether rural children still face significant barriers to medical care. To address this question, we determined travel times in 1980 and in 1989 to child health services for the rural pediatric population of northern New England--the area with the highest per-capita primary care physician supply of any non-metropolitan region in the United States. The study population in 1989 included 363,443 children living in 936 nonmetropolitan towns. The study revealed important spatial relationships in health service supply and demand not identified using other methods of assessing physician availability. Although travel times to physicians decreased slightly during the decade, we found that 15.5 percent of the children in our population were more than 30 minutes from pediatricians in 1989, and travel time to emergency rooms was more than 30 minutes for 9.9 percent of the children. In contrast, only 1.8 percent of children faced excessive travel times to family/general practitioners. While towns with pediatricians were likely to also have a family physician or an emergency room, the majority of towns with family physicians had neither a pediatrician nor an emergency room. Towns with poor geographic access to pediatricians and emergency rooms had low population densities and were distant from metropolitan areas. The analysis indicates that even in rural areas of high physician supply, access to pediatricians and emergency rooms for many children remains limited, and family physicians are the dominant medical providers for children.(ABSTRACT TRUNCATED AT 250 WORDS)     

Experiences of Organization for Economic Cooperation and Development countries with recruiting and retaining physicians in rural areas

OBJECTIVE: This present study discusses the potential pitfalls in measuring physician shortages in rural areas and presents existing evidence of the effectiveness of policy interventions designed to influence the geographical distribution of physicians. DESIGN: Information on the geographical distribution of physicians was derived from a survey of Organization for Economic Cooperation and Development (OECD) countries and a desk review of the academic literature and policy documents of OECD governments. MAIN OUTCOME MEASURE: Whether policies have been effective in recruiting and retaining physicians in rural areas. RESULTS: Existing measures of physician shortages in rural areas may be misleading as they do not account for a number of supply side factors (e.g. physician productivity, mobility of physicians across areas) and demand-side factors (e.g. patient needs for physician services). Increases in the national number of physicians have narrowed, but not eliminated, shortages in rural areas. Some success in increasing physician supply to rural areas has been reported with educational, regulatory and financial policies; whereas countries' experiences with education-related funding policies are mixed. There is some evidence suggesting that the effectiveness of these policies can be enhanced by supporting occupational opportunities for the spouse/partner, education of children and accommodation. CONCLUSIONS: Although there has been little evaluation of policy interventions, physician shortages in rural areas may be reduced by supply side policies that focus on the physician in combination with measures to sustain the economic and social viability of rural communities.     

Improvement in infant and perinatal mortality in the United States, 1965--1973: I. Priorities for intervention

Changes in United States infant and perinatal mortality in the period 1965--1973 were examined by race, age at death or length of gestation, and degree of urbanization. The decline of postneonatal mortality rates was greater than the declines of fetal and neonatal mortality rates. Other-than white infant and fetal mortality rates improved more than the white rates, except in the first day of life. Postneonatal mortality rates improved more in rural than in urban areas, while neonatal and perinatal mortality rates improved more in urban areas than in rural. These improvements in mortality rates have occurred at the same time as changes in medical techniques and the organization and availability of health services, improvements in economic conditions and standards of living, and changes in the demographic characteristics of the child-bearing population of the United States. Each of these changes was in a direction expected to have a favorable effect on infant and perinatal mortality. Nevertheless, the improvement of infant mortality rates has not changed the relative position of the United States in comparison with other countries. Programs to improve infant and perinatal mortality can use the data in this study to define high priority target groups using a method based on the size of the problem in the target group, the severity of the problem, and the amount and direction of change.     

Preventing errors in healthcare: a call for action

Medical errors cause up to 98,000 people to die annually in the United States. They are the fifth leading cause of death and cost the United States dollar 29 billion annually (Kohn 1999). Medical errors fall into 4 main categories: diagnostic, treatment, preventative, and other. A review of literature reveals several proposed solutions to the medical error problem. One solution is to change the system for reporting medical errors. This would allow for the tracking of errors and provide information on potential problematic areas. A National Center for Patient Safety is proposed, which would set national goals towards medical errors. Another solution is the setting of performance standards among individual entities of healthcare delivery, such as hospitals and clinics. Another solution involves implementing a culture of safety among healthcare organizations. This would put the responsibility of safety on everyone in the organization. A change in education is yet another proposed solution. Informing medical students about errors and how to deal with them will help future physicians prevent such errors. The final solution involves improvements in information technology. These improvements will help track errors, but also will prevent errors. A combination of these solutions will change the focus of the healthcare industry toward safety and will eventually lead to billions in savings, but more importantly, the saving of lives.     

Career Success and Life Satisfaction for Female and Male Healthcare Managers

Medical errors cause up to 98,000 people to die annually in the United States. They are the fifth leading cause of death and cost the United States $29 billion annually (Kohn 1999). Medical errors fall into 4 main categories: diagnostic, treatment, preventative, and other. A review of literature reveals several proposed solutions to the medical error problem. One solution is to change the system for reporting medical errors. This would allow for the tracking of errors and provide information on potential problematic areas. A National Center for Patient Safety is proposed, which would set national goals towards medical errors. Another solution is the setting of performance standards among individual entities of healthcare delivery, such as hospitals and clinics. Another solution involves implementing a culture of safety among healthcare organizations. This would put the responsibility of safety on everyone in the organization. A change in education is yet another proposed solution. Informing medical students about errors and how to deal with them will help future physicians prevent such errors. The final solution involves improvements in information technology. These improvements will help track errors, but also will prevent errors. A combination of these solutions will change the focus of the healthcare industry toward safety and will eventually lead to billions in savings, but more importantly, the saving of lives.     

Determining the full costs of medical education in Thai Binh, Vietnam: a generalizable model.

We summarize a model for determining the full cost of educating a medical student at Thai Binh Medical School in Vietnam. This is the first full-cost analysis of medical education in a low-income country in over 20 years. We emphasize policy implications and the importance of looking at the educational costs and service roles of the major health professions. In Vietnam fully subsidized medical education has given way to a system combining student-paid tuition and fees with decreased government subsidies. Full cost information facilitates resource management, setting tuition charges at a school and adjusting budget allocations between medical schools, teaching hospitals, and health centres. When linked to quality indicators, trends within and useful comparisons between schools are possible. Cost comparisons between different types of providers can assist policy-makers in judging the appropriateness of expenditures per graduate for nursing and allied health education versus physician education. If privatization of medical education is considered, cost analysis allows policy-makers to know the full costs of educating physicians including the subsidies required in clinical settings. Our approach is intuitively simple and provides useful, understandable new information to managers and policy-makers. The full cost per medical graduate in 1997 was 111 462 989 Vietnamese Dong (US$9527). The relative expenditure per Vietnamese physician educated was 2.8 times the expenditure in the United States when adjusted for GNP per capita. Preliminary findings suggest that, within Vietnam, the cost to educate a physician is 14 times the cost of educating a nurse. Given the direct costs of physician education, the lifetime earnings of physicians and the costs that physicians generate for the use of health services and supplies, it is remarkable that so little attention is paid to the costs of educating physicians. Studies of this type can provide the quantitative basis for vital human resource and health services policy considerations.     

Rural Radiology: Who is Producing Images and Who is Reading Them?

The purpose of this study is to identify the local availability and trends in local availability of imaging technology and interpretation services in rural hospitals in the northwestern United States during the period between 1991 to 1994. Another objective is to describe hospital and community factors associated with the diffusion of image production and interpretation services. The information for this study was gathered through telephone surveys of rural hospital administrators in eight northwestern states in 1991 and 1994. The availability of magnetic resonance imaging (MRI) equipment, computed tomography (CT) scanners, ultrasonography equipment, and dedicated mammography equipment increased between 1991 and 1994. The increases in MRI units were primarily in mobile equipment, while ultrasonography and mammography equipment increases were primarily fixed hospital-based units. In 1994, image interpretation in the rural hospitals was provided by both primary care and radiology physicians. Forty-six (11.5%) of the rural hospitals had no on-site radiology services and only 73 (18%) had daily radiology services. Between 1991 and 1994, 12 hospitals gained at least once-a-week radiology services, but 24 lost all radiology services. Teleradiology availability more than doubled during the three years. Radiology technology has diffused widely into rural communities in this region of the United States at differing rates for large and small hospitals. Radiologists are available to these hospitals only 46 percent of the days each year, with more days of availability in the larger hospitals and fewer days in the smaller hospitals. Teleradiology capability is increasing more rapidly in the larger hospitals that have radiologists more readily available.     

Attracting physicians to underserved communities: the role of health networks

As health networks battle for additional market share and encourage additional Medicaid HMO subscribers to use their physicians and hospitals, more health executives are analyzing proposals of how to attract qualified doctors to practice in poor rural or inner-city communities. Supplying more physicians to those areas by increasing the number of medical schools, expanding the National Health Service Corps (NHSC) program, and allowing more international medical graduates (IMGs) to pursue residency training in the United States have been relatively unsuccessful strategies to improve America's geographic maldistribution of medical manpower. This article focuses on several approaches that health networks might use to increase market penetration and at the same time deliver enhanced health services to the underserved. Health networks may provide eminent leadership in the overall design and governance of soundly conceived Medicaid HMOs; strengthen existing or develop additional community health/primary care centers; interface more effectively with local schools to foster Medicaid HMOs for children of low-income families; and reimburse at "premium rates" primary care physicians who practice in underserved communities. The reluctance of physicians to practice in these areas and of middle-income and upper-income taxpayers, and therefore elected officials, to support increased spending or redirection of funds continue to be major barriers for health alliances to demonstrate willingness to invest additional resources in poor inner-city and rural environments.     

Emergency Department Coverage by Primary Care Physicians in a Rural Practice-Based Research Network: Incentives, Confidence, and Training

ABSTRACT:  Context: In rural areas of the United States, emergency departments (EDs) are often staffed by primary care physicians, as contrasted to urban and suburban hospitals where ED coverage is usually provided by physicians who are residency-trained in emergency medicine. Purpose: This study examines the reasons and incentives for rural Oregon primary care physicians to cover the ED and their reported measures of confidence and priorities for additional training. Methods: We conducted a cross-sectional survey of primary care physicians in rural Oregon who are members of the Oregon Rural Practice-Based Research Network (ORPRN). The survey was sent to 70 primary care physicians in 27 rural Oregon practices. Findings: Fifty-two of 70 (74%) ORPRN physicians representing 24 practices returned the questionnaire. Nineteen of the 52 responding physicians reported covering the ED. The majority (75%) of physicians covering the ED did so as a requirement for practice employment and/or hospital privileges. Physicians covering the ED reported low confidence in pediatric emergencies and expressed the need for additional training in pediatric emergencies as their top priority. Conclusions: Almost two fifths of surveyed primary care physicians in a rural practice-based research network provide ED coverage. Based on these physicians' low levels of confidence and desire for additional training in pediatric emergencies, effective education models are needed for physicians covering the ED at their rural hospitals.     

Adjusting Measures of Physician Availability to Reflect Importation of Physician Services into Rural Areas

Recent changes in the organization and delivery of physician services in rural areas suggest the need to update how physician availability is viewed and measured. The objective of this study was to empirically examine the effect of rural hospitals contracting with outside physicians for part or all of their emergency room coverage, and the use of urban specialists to staff outpatient clinics, on measures used to assess physician availability. Based on data from one rural state, the findings demonstrate the importance of adjusting for the importation of physician services into rural areas.     

Oral Health Status of Children and Adolescents by Rural Residence, United States

CONTEXT: The limited information available on the oral health status of rural children in the United States makes it difficult to devise policy strategies to address perceived problems. PURPOSE: To document the oral health status and dental care utilization of US children by place of residence, METHODS: Data from National Health Interview Surveys for 1995, 1997, and 1998, and from the third National Health and Nutrition Examination Survey (1988-1994) were analyzed. FINDINGS: Children residing in rural areas were more likely to be uninsured for dental care than were children from urban areas (41.1% versus 34.7%). A greater percentage of rural than urban children reported unmet dental needs (7.5% versus 5.6%); there was no difference in self-reported poor dental status. Urban children were more likely than rural children to have visited the dentist in the past year (73.6% versus 69.9%) and were also more likely to be regular users of dental care (61.7% versus 51.4%). Differences in percentage of rural and urban children with caries lesions and caries experience were not significant. CONCLUSIONS: Children residing in rural areas have less access to and utilization of dental care compared to children residing in urban areas. Moreover, poor rural children display less utilization of dental services than poor urban children. Differences in the sum of decayed and filled primary teeth and the sum of decayed, missing, and filled permanent teeth were not significant.     

American and Soviet medical manpower: growth and evolution, 1910-1970.

Between 1910 and 1970 the number of physicians in the United States increased 2.5 times, in Soviet Russia almost 25 times. The number of physicians per constant unit of population remained fairly stable in the United States, rising slightly in the last few years. In the U.S.S.R. that number increased 16 to 18 times, and now stands about 50 per cent higher than in the United States. About 10 per cent of American physicians are women; in the U.S.S.R. it is about 70 per cent. Neither society has resolved the problem of deploying physicians to the rural areas. American physicians are more specialized than their Soviet colleagues. The article concludes with general remarks about the two health systems, pointing out resemblances and divergences. The hypothesis of a possible "convergence" is entertained.     

Is There a Role for the Small Rural Hospital?*

Rural hospitals represent almost half of all short-stay nonfederal general hospitals in the United States, but have been more severely affected than their urban counterparts by changes in reimbursement, regulation, and technology. Two hundred and six rural community hospitals closed during the first nine years of the 1980s, and the rate of closure is accelerating. Using secondary data sources to examine the structure, role, and content of rural hospitals, small rural hospitals are described and compared to larger and nonrural hospitals. Rural hospitals differ systematically from other hospitals in the United States, with smaller daily censuses, lower occupation rates, shorter lengths of stay, and disproportionately high shares of Medicare patients. They are dominated by very small institutions, with more than 1,000 rural hospitals having fewer than 50 beds. Small rural hospitals offer a core of basic services to the populations they serve. Emergency, obstetric, and newborn services are virtually ubiquitous in rural hospitals of all sizes, and they are also more likely to offer long-term nursing and home care services than urban hospitals of similar size. The inpatient diagnostic and procedural mix of these institutions demonstrates that they provide care for common medical and surgical conditions of low complexity. Rural hospitals are also relatively inexpensive, representing only 6 percent of total expenditures for hospital care. Given their central role in supporting the provision of health services to rural areas, the apparent appropriateness of the conditions they treat, and their relatively modest cost, it would seem reasonable to use federal policy to stabilize our previous investment in these institutions.     

Judging doctor supply--market or health criteria?

Large rural areas of developing countries show severe shortages of physicians, graduate nurses, and other trained health personnel. Countries have tried to alleviate this problem in several ways, including requiring all new medical graduates to 1st undertake periods of service in rural areas, the use of mobile clinic teams from small towns to visit outlying villages on a regular basis, and the use of air ambulances to transport seriously ill persons from isolated places to hospitals in cities. Perhaps the most significant strategy has been the use of trained community workers to provide primary health care for rural and low-income urban populations. Unfortunately, weak supervision of the community workers has often led to unsatisfactory performances. Surprisingly, a recent international congress claimed that many developing countries are training too many doctors, that some developing countries have, or will soon have, 1000s of unemployed physicians. However, comparison with developed countries shows that the "diagnosis" of a country's doctor supply situation may not depend on a universal standard, but on that job market's capacity for absorption of personnel. If specific public health goals are to be reached however, commercial criteria cannot be applied to the evaluation of a nation's health manpower; instead social need must be analyzed and strategies designed to meet them. Policy is shaped by the priority public authorities give to services. Of the 7 developing countries which reported a surplus of doctors, only Colombia and Mexico reported spending more on public health than on the military. In addition, in the other 5 countries, 40% or less of the overall public and private expenditures on health came from the government. When military expenditures absorb a high share of government funds, public support for health services is adversely affected, and individuals and families must depend on their own expenditures to obtain health services. Health services should be recognized as a basic human right, and, therefore, as an obligation of society. To meet this obligation necessary strategies are 1) increase public support, not only by increasing the health share of the general budget, but by other sources such as social security and community financing, 2) require 5-10 years of social service for all medical school graduates, 3) ensure that renumeration for doctors in public service is adequate to support a decent standard of living, 4) continue to train community health workers, but ensure physicians are qualified to supervise them, and, 5) health services and health manpower should be guided by principles of social justice, not by those of commercial market dynamics.     

A comparison of injury death rates in China and the United States, 1986.

BACKGROUND: The importance of injury as a public health problem is not well recognized in many developing countries. Data have recently become available on injury mortality in China. METHOD: We compared Chinese injury data based on a 100 million population segment for 1986 with data for the United States. RESULTS: The age-adjusted death rate from all injuries for China exceeds the rate for the US (69.0 vs 61.3 per 100,000). The US has higher death rates from motor vehicle crashes, fires, and homicide; China has greater mortality from drowning, poisoning, falls, and suicide. Especially noteworthy in China are the high drowning rates among young children and the elderly and the high suicide rates in rural areas among young adults and the elderly. CONCLUSION: Injury is an important public health problem in China, exceeding in many respects the problem in the United States. It is urgent for China to place high priority on injury research and prevention.