American Journal of Law & Medicine

The National Residency Exchange: A Proposal to Restore Primary Care in an Age of Microspecialization

CONTENTS   I. INTRODUCTION  II. WHY PRIMARY CARE?      A. Improvement in Health Outcomes      B. Disease Prevention      C. Cost-Effectiveness      D. Continuity and Coordination of Care III. WHY MEDICAL STUDENTS DO NOT SELECT CAREERS IN      PRIMARY CARE      A. Lower Compensation      B. Lack of Reimbursement for Preventive Services      C. Perceived Lower Prestige      D. Too Many Responsibilities  IV. PRIMARY CARE IN LIGHT OF THE PATIENT PROTECTION AND      AFFORDABLE CARE ACT      A. Bonus Payments to Primary Care Physicians      B. Making Care Coordination Easier      C. Increased Coverage of Preventive Care Services Under         the PPACA      D. Easing Financial Indebtedness of Medical Graduates         1. Revitalizing the National Health Service Corps         2. Increased Funding for Primary Care Residency Programs         3. Expansion of the Primary Care Loan Program   V. THE NATIONAL RESIDENCY EXCHANGE AND PRIMARY CARE      LOAN REPAYMENT PROGRAM      A. Toward an Improved Residency Matching Program         1. The Current Residency Matching Process         2. The National Residency Exchange         3. Federal Community Health Centers      B. Universal Federal Funding for Primary Care Loan Repayment         1. The Primary Care Loan Repayment Program         2. Projected Costs of the Primary Care Loan            Repayment Program         3. Achieving Cost Neutrality for the Primary Care Loan            Repayment Program      C. Emphasizing Primary Care in Medical School  VI. CONCLUSION 

Healthcare deficiencies in the United States have long been perpetuated by a shortage of primary care providers. A core purpose of the Patient Protection and Affordable Care Act (PPACA) is to provide health insurance for America's approximately fifty million uninsured. Implementation of universal health insurance, however, does not mean sufficient healthcare access for all, since the supply of physicians does not and will not meet demand. For reasons reviewed in this Article, the current physician shortage mainly impacts primary care providers. This shortage is particularly troubling because increased provision of primary care relative to specialty care has been associated with improvement in health outcomes, disease prevention, cost effectiveness, and coordination of care. This Article highlights provisions in the PPACA that impact primary care physicians. Finally, this' Article proposes the creation of a universal primary care loan repayment program and a national residency exchange designed to alleviate the U.S. primary care crisis by facilitating optimal distribution of resident physicians in each medical specialty based on community need.


The failures of the U.S. healthcare system have been lamented for decades. (1) In a revealing 2000 World Health Organization (WHO) report, the United States's national health system ranked thirty-seventh worldwide in overall health system performance, just ahead of Slovenia and Cuba. (2) The U.S. healthcare system managed to place so poorly notwithstanding the fact that the United States spends more dollars and the highest percentage of gross domestic product (GDP) of any nation on healthcare. (3) The Centers for Medicare and Medicaid Services (CMS) reports that "[o]ur nation's total health care bill (already $2.1 trillion in 2006) is expected to more than double by 2017 to an estimated $4.3 trillion. By 2017, our nation would be spending almost one of every five dollars on health care." (4)

The financial pressures on the U.S. healthcare system have led to several cycles of attempted solutions, followed by costly system abuses engendering further attempted solutions. The problems inherent in a fee-for-service reimbursement system, including the lack of quality control and the unbridled ability of providers to determine their own salary, (5) were a significant factor in the rise of managed care organizations and the era of regulated healthcare expenditures. (6) The passage of the Health Maintenance Organization Act of 1973 (7) coincided with the beginning of the era of increasing specialization. While managed care allowed for cost containment in healthcare, S it also resulted in greater infringement on doctors' autonomy and livelihood. Doctors have responded in part by specializing to preserve medical demand and maintain financial independence. (9) Since the 1970s, significant financial incentives have prompted a movement toward greater utilization of unprecedentedly expensive diagnostic tools, medicines, and surgical procedures, particularly by specialist physicians. (10) Public health studies, however, have repeatedly shown that the lack of primary care physicians has significant negative effects on morbidity and mortality. (11)

Major health system reforms should be adopted to revitalize primary care and achieve an optimal distribution of generalist and specialist physicians in the United States. A major goal of the Patient Protection and Affordable Care Act (PPACA) (12) is to provide health insurance for America's approximately fifty million uninsured. (13) Importantly, however, provision of universal health insurance does not mean sufficient healthcare access for all, since the supply of physicians does not and will not meet demand. (14) There is "wide agreement that the current U.S. primary care system is failing," and "near-unanimity" that healthcare reform will require primary care revitalization. (15)

The Accreditation Council on Graduate Medical Education (ACGME) reports that primary care "currently comprises 35% of all practicing physicians and is rapidly declining," since less than twenty percent of U.S. medical students now enter into primary care fields. (16) Many medical organizations recognize the need for preferential recruitment of primary care physicians. (17) Beginning in 1999, the Council on Graduate Medical Education (COGME) has repeatedly recommended a significant increase in the number of generalist physicians and the number of physicians trained in ambulatory settings. (18)

To ensure an optimal distribution of primary care physicians in the United States, this Article proposes that federal funding for residency training positions should be allocated based on community need. Part II describes the importance of primary care to the U.S. healthcare system. Part III reviews the reasons why an increasingly vanishing fraction of U.S. medical students enter into primary care specialties. Part IV highlights provisions in the PPACA that affect primary care providers. One of the most promising provisions to correct the current physician maldistribution is the PPACA's grant of exponentially increased funding to the National Health Service Corps (NHSC), the principal federal program that incentivizes primary care physician service in areas of medical need in the United States. Part V proposes that the PPACA's ambitious funding of the NHSC program should be used to extend medical loan repayment to all U.S. medical graduates entering primary care. This restructuring of U.S. medical education costs would allow for the implementation of a national residency exchange that will facilitate optimal distribution of new medical graduates to residency training programs in each medical specialty based on community need. Because the current need is greatest for primary care physicians, the national residency exchange would initially be tasked with preferential appointment of medical graduates to primary care residency programs.


The Institute of Medicine defines primary care as "the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community." (19) Primary care practitioners are generally understood to be those who practice in the fields of "family medicine, general internal medicine, general pediatrics, and obstetrics and gynecology." (20) Increased provision of primary care relative to specialty care has been associated with improvement in health outcomes, disease prevention, cost effectiveness, and coordination of care.


An increasing body of literature shows that areas with higher generalist-to-specialist ratios experience better health outcomes. Primary care is associated with prevention of illness and death, as well as improvement in equitable distribution of healthcare services. (21) Higher ratios of primary care physicians have been associated with improvement in both patient self-reported health ratings, and morbidity and mortality. (22) Longevity is demonstrably increased in areas of greater primary care physician presence. Primary care physicians are "significantly associated with lower total mortality.... lower death rates because of stroke ... , postneonatal mortality ..., and longer life expectancy...." (23) There is an increasing demand for more primary care providers to meet the needs of the steadily rising number of patients with chronic conditions. (24)

A 2010 study from the Dartmouth Institute (the "2010 Dartmouth Study") (25) highlights the interdependence between primary care and specialist physicians in achieving optimal health outcomes. For example, the study demonstrates that despite visiting a primary care physician in the past year, diabetic patients were no less likely to undergo leg amputation, a significant morbidity resulting from poorly controlled diabetes. (26) Furthermore, having a primary care visit was not associated with fewer hospitalizations for "ambulatory care-sensitive conditions," conditions which should generally be more responsive to outpatient treatment by primary care physicians. (27) This data suggests that primary care providers, without more, cannot serve as a panacea for each of our health system's ailments. In particular, primary care providers who treat large numbers of low-income patients often have difficulty securing necessary specialty care for their patients. (28) When assisted by a healthcare infrastructure that facilitates coordination of care for complex diseases among specialist physicians, however, primary care providers have a vital role to play in improving population health and ensuring that evidence-based preventive recommendations are followed. (29)


Consistent with their focus on the whole health of patients, primary care physicians provide demonstrably better preventive care than specialists in several different clinical areas. For example, primary care physicians are more likely to counsel patients on safe health habits, such as smoking cessation, exercise, responsible alcohol use, and seat belt use. (30) They are more likely to adhere to best practices recommendations for breast cancer screening; (31) immunization rates are also higher for patients who have a primary care physician than for those with a specialist as their usual physician. (32)

The 2010 Dartmouth Study confirms that patients who have had at least one visit to a primary care physician receive more preventive screening in certain categories, such as mammograms for women in the recommended breast screening age and hemoglobin Alc tests for diabetic patients. (33) The study also highlights areas for improvement in following certain screening recommendations, particularly those requiring the involvement of specialist physicians. For example, the study fails to find an association between primary care access and diabetic patients' receiving recommended annual eye examinations, (34) which require the participation of ophthalmologists or optometrists. This finding highlights the need for a healthcare infrastructure that facilitates and incentivizes coordination of care.


Areas with higher ratios of primary care physicians to specialist physicians experience greater cost savings. (35) These cost savings are due in part to primary care providers' greater focus on preventive medicine, continuity of care, and a holistic approach to care, which lowers total healthcare costs for patients. (36) Primary care physicians are uniquely positioned to ensure that patients receive the right screening services and treatments, the right diagnostic services (without unnecessary duplication of care), and the right referrals for specialized care. Primary care physicians have been shown to provide similarly effective care for many conditions at a significantly lower cost than specialists. (37) Specialists are adept at providing care within their areas of specialization for patients with complex or rare clinical conditions. (38)

Cost decisions in healthcare necessarily involve rationing of limited finances, human resources, and medical equipment. (39) While healthcare rationing is unavoidable, (40) rationing decisions should be made on the basis of medical effectiveness and cost-benefit analyses of medicines and surgical procedures, with participation from both healthcare experts and the public. (41) As one scholar notes:

   At this time, health care rationing in the United States is based    on the exclusion of the poorest people, through a health care    system that runs on perverse incentives for physicians and    increasingly transforms their profession into a business that is    driven by an unsustainable proportion of the nation's GDP. (42) 

Individuals in the United States lace significant lack of access in terms of both healthcare financing and physician wait times. According to a 2008 survey by the Commonwealth Fund, fifty-four percent of chronically ill adults in the United States reported "at least one cost-related access problem, including not filling a prescription or skipping doses, not visiting a doctor when sick, or not getting recommended care." (43) As for long wait times, the survey found that chronically ill adults in the United States were most likely to report lack of rapid (same- or next-day) access to healthcare providers, as compared to chronically iii adults in countries with national health insurance programs, such as the Netherlands, the United Kingdom, and France. (44)

The WHO found that among countries at a similar level of economic development, those in which healthcare was "organized around primary care" experienced better health outcomes for the same investment. (45) For example, the effectiveness of the British National Health Service has been attributed to its primary care providers, who improve health outcomes by "focusing on the health of the whole person, rather than on a single organ; emphasizing prevention and health screening; ... and providing continuity and coordination of care and being patients' constant companions in the domain of health care." (46) Furthermore, primary care physicians "act[] as gatekeepers, who control costs by referring only patients who truly require a specialist's opinion, since 86% of medical needs can be managed in the community...." (47)

Preventive care delivered by primary care physicians has also been demonstrated to prevent costly emergency room visits and hospital admissions. Areas with larger numbers of individuals who have regular access to primary care physicians have been shown to have fewer emergency room visits for the same symptoms, even after correction for socioeconomic and demographic factors. (48) Emergency room visits are considerably costlier than outpatient office visits, even when the same treatment is provided in both settings. (49)

Preventive care has an even greater impact on cost savings in the context of inpatient hospital admissions. According to a 2000 study by the Agency for Healthcare Research and Quality (AHRQ), five million admissions to U.S. hospitals could have been prevented, and over $26.5 billion saved, if individuals had received high-quality primary and preventive care. (50) Based on an average cost of $5300 per hospital admission in 2000, reducing preventable hospitalizations by just five percent can reduce inpatient costs by more than $1.3 billion. (51)

Health plans that include preventive services are more cost-effective than those that do not implement prevention. (52) A 2009 Urban Institute report estimates that if the United States invested $10 per person in prevention, the return would be a savings of $16.543 billion in five years and $18.451 billion over ten years. (53)


Patients tend to see physicians more regularly as the supply of family physicians in a community increases,s4 Over the past two decades, hospitals have increasingly relied on internal medicine inpatient-care specialists, or hospitalists, to provide care for inpatients. (55) While hospitalists provide important benefits, this trend has become detrimental to the patient-doctor relationship, leading to disruption of continuity of care and to increased fragmentation in care coordination. (56) Specialty care is more effective for patients who have ongoing relationships with their primary care physicians. (57) In this increasingly complex era of evidence-based medicine and specialization, there is an ever greater need for primary care physicians to act as point persons: to implement preventive services, to coordinate care, and to act as patient advocates.


The declining popularity of primary care began in the 1970s, when specialization became increasingly widespread. (58) Particularly over the past decade, there has been an alarming drop in the number of students matching into primary care. (59) A revealing 2008 study by Hauer and others reported that a mere two percent of 1177 graduating medical students from eleven different U.S. medical schools were planning careers in general internal medicine. (60)

The American College of Physicians (ACP), the national professional organization for internal medicine physicians, identified three major challenges facing primary care: "high levels of educational debt; lifestyle concerns due to administrative hassles and practice design; and payment issues, including the disparity in salaries between primary care providers and specialists, and payment policies that do not appropriately recognize the care that primary care providers provide." (61) Lack of coordinated, systemic support for preventive medicine is another major factor contributing to both financial and administrative difficulties for primary care providers. The various burdens placed on primary care providers and the decreasing number of medical graduates entering into primary care foster misconceptions regarding the level of prestige for primary care and specialty fields.


Medical school debt strongly influences people's decisions about which field to enter. In 2009, the Robert Graham Center reported "low average annual income" as one of the primary reasons medical students choose not to enter primary care. (62) The average debt at graduation from a U.S. medical school is more than $155,000, (63) with nearly one in four medical students graduating with a debt of more than $200,000. (64) One study estimates that "by 2031, loan payments for attending physicians will be nearly 40% of a physician's after-tax income for those who attended public schools, and 60% ... for those who attended private medical schools." (65) After graduation from medical school, physicians enter into residency training where they earn a small stipend for a number of years depending on which medical field they choose. For medical students contemplating primary care, the financial pressure of student debt can be insurmountable. (66)

This financial pressure increasingly causes students to elect to enter into fields such as diagnostic radiology, anesthesiology, and dermatology, which--compared to primary care--provide a significantly more lucrative income, in addition to more predictable workload and work hours. (67) Tests and procedures are disproportionately compensated by U.S. healthcare payors, leading to over-utilization. To use radiology as an example, in 2006, the United States spent $100 billion on diagnostic imaging. (68) As one article notes, "[t]here are now more [magnetic resonance imaging] units serving the 6.5 million residents of Massachusetts than there are for the 55 million residents of Australia and Canada combined." (69) Conversely, the tests and procedures involved in primary care do not generate a great deal of income. Studies have gone so far as to identify a precise linear association between specialty income and percentage of specialty spots filled by U.S. medical graduates. (70)

This system of disproportionate compensation, compounded by the high cost of medical education, has also had detrimental effects on the diversity of the physician pool. Minorities, students from disadvantaged backgrounds, and nontraditional students, such as students with previous careers, have historically been more likely to choose careers in primary care medicine. (71) The increasing cost of medical school, however, may be driving these potential applicants away from a medical career altogether, resulting in decreased diversity in the workforce and greater healthcare disparities. (72)

The rapidly rising cost of medical malpractice also factors heavily in medical career decision-making. Medical malpractice has increased the costs of medical practice across all specialties, but has especially impacted obstetrics and gynecology, and the significant portion of family physicians that deal with maternal care and obstetrics. (73) The costs of obstetrical professional liability insurance have caused large numbers of obstetrician/gynecologists and family physicians to abandon obstetrical practice. (74)


Prevention is central to primary care. As primary care physicians are the first line of contact for most patients, they typically bear primary responsibility for delivery of preventive care. Yet despite solid evidence for both the effectiveness and cost-effectiveness of preventive services, (75) a paucity of healthcare dollars is being spent on preventive medicine. The Association of Schools of Public Health (ASPH) notes that "[a]t present, the United States invests less than 2% of each health care dollar on prevention while spending 75% of that dollar on treating preventable diseases." (76)

Some studies have disputed the notion that preventive interventions, as compared to medical treatment, save on healthcare costs. (77) Though the effect of prevention in reducing raw health expenditures is debatable, (78) the relevant metric for measuring effectiveness of preventive recommendations is not mere dollars saved, but impact of a healthcare dollar in reducing health risks and improving health outcomes. (79) In these regards, prevention provides a significantly better return on investment than medical treatment. (80)

Despite these findings, the current fee-for-service reimbursement schemes utilized by Medicare, Medicaid, and most private insurers provide few financial incentives for physicians to adopt preventive services compared to treatment services. …

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