The May 21, 2025 Point will address an intriguing and vexing problem in the world of workers' compensation. Join us for:
The Point – Doctor, Doctor, Give Me a Clue, How Can Workers’ Comp Ever Attract You?
Even with dramatically decreasing injury rates, see The Numbers - Spring 2025 (April 2025), the volume of physicians is never sufficient, see Bid Day 2025 (April 2025). We will discuss this with Ramona Tanabe, the CEO of WCRI, and Dr. Michael Choo, CMO of Paradigm Corporation.
The challenge is economic, regulatory, and more.
There are too few in the legal world who have the benefit of studying economics. I was blessed to attend a business school that insisted I take economics classes and which provided ancillary experiences with guest lecturers and programs. Economics is among the least understood topics among lawyers. Too many limited studies to history, English, political science, and other law-school approach curricula while ignoring this imperative fundamental.
In the purest form, economics professors introduce the idea that our time devoted to one task is necessarily not devoted to other tasks. The simple dichotomy they propose for introduction is an economy that may produce either "guns or butter." This is an admitted diversity, as the ingredients for each are unique. But the time to produce a bullet is time not devoted to an ounce of butter.
In the realm of manufacturing, then, the "guns or butter" illustrates the challenges of allocating a resource (time) to production. The models get more complex, but to some extent, build on this dichotomous illustration of potential binary choices. There are many alternatives to producing one bullet, and that is where the binary is abandoned and the complexity expands.
Nonetheless, the same binary choice could be used as regards other resources. For every automobile you produce, that is steel you cannot use to produce a tank, ship, or bridge. The base resource is available for devotion to any one purpose, and there are a variety of variables that will play - e.g., one bridge requires more steel than one car. As our economic systems pull from one alternative to another, choices are being made, demand is engaged, and price will be impacted.
Price is driven by the interaction between demand and supply. There is a reason that sand sells for perhaps $40 per ton and a one-carat diamond sells for well over $1,000. Both are useful resources that could be put to various uses. But one is more scarce (or perceived to be), and thus the price is higher. Supply goes down, price goes up. Price goes up, demand goes down. As the relationships shift, markets find an "equilibrium price" at which there is an efficient relationship between supply, demand, price, and the market clears.
This is a simple (relatively) set of postulates and proofs. Unfortunately, there are additional challenges from market regulation and management. Laws are part of protecting consumers, managing markets, and even regulating production (supply) and price.
Simple facts include:
- In America, you cannot declare yourself a doctor; you must go through many years of school, residency, and more.
- In the 21st century, medicine is evolving rapidly, and there is demand for doctors in the research and development industries of drugs, testing, and more.
- In the practice of medicine, there are procedures and treatments that are highly specialized, require specific skills and tools, and can demand increased prices due to demand and supply.
- In a world in which mistakes and errors are subject to tort liability, there is a drive to avoid misdiagnosis and untoward treatment; doctors practice some degree of "defensive medicine" to diminish their risk.
To further complicate, the vast majority of medical care in America is paid for by someone other than the consuming patient (87.4% = 31.3% private insurance, 23.6% Medicare, 19.2% Medicaid, 13.3% other third party). There is a disconnect between the service recipient (patient) and the payer.
In an economic sense, we make rational choices when expending our resources (do I spend the next minute making an ounce of butter or a bullet?). We make the same choices in our expenditures (do I buy more bullets or more butter? More sand or diamonds?). But when we can consume without cost (as the third party is the payer), does that encourage economically sound consumption, or does it encourage overconsumption?
At the outset of the story, we have too few doctors in gross terms. The Association of American Medical Colleges (AAMC) says that the deficit, despite all these contributors, is primarily the result of aging. The patient population is aging (lots of Boomers now seeking care in their "golden years"), and lots of doctors are reaching retirement age. It is, some say, a perfect storm.
The AAMC says, "The United States will face a physician shortage of up to 86,000 physicians by 2036." That is a significant population. The main impacts of this are expected to be in rural America. Nonetheless, there will be impacts both urban and rural, primary and specialist, and it will impact workers' compensation.
So, from the frank beginning of too rew, we add competition for obstacles to market entry, talent diversion to specialties and research, and resource allocation complications from defensive medicine. Perhaps these simply make the "perfect storm" more perfect (can you be more than perfect?), perhaps a flawless storm?
Whenever there is discussion of impact, the question of oxen arises. There is trepidation about impact, but then "whose ox is being gored?" If my neighbor's house burns, that is a shame, but if mine burns, that is a tragedy. If my ox is not the victim, do I care? More to the point, do I care enough? Do any of us?
In the end, the insufficient physician population will make it difficult for patients. More will wait for appointments. More will wait longer for appointments. More will see ancillary providers (Physician Assistants, Nurse Practitioners, etc.). More will give up and go without. More will lament their geographic, economic, and other disadvantages.
The payers will also face an impact. As supply is insufficient (like diamonds), the price of medical care will rise. That higher cost will factor secondarily into premiums (health and workers' compensation), which will contribute to product and service prices, taxation demands, and other economic perspectives.
The path to becoming a physician may be from 11 to 16 years, according to AAMC and Kaplan. That means action today might (2025 +11) focus us on the 2036 shortage, but to some extent, we are likely already too late to avoid all the implications. We may ameliorate, diminish, and manage, but some future shortage appears inevitable from our 2025 perspective.
What does all this mean for the quality and quantity of care? How will this impact the workers' compensation systems, the lofty goals of timely remediation, and return to work? This is The Point, and we will gather to discuss it all with two imminent speakers on Doctor, Doctor, Give Me A Clue (Kudos to Robert Palmer, Bad Case of Loving You, Island Records, 1979)(and Kudos to Robert Wilson for his adaptation of the tune).
Join us May 21, 2025, at 1:00 EST. Sign up here!
