Private practice physicians bolster Florida's sagging economy, even during downturns, from job creation to disposable income, according to "The Economic Impact of Private Practice Physicians' Offices in Florida," a report released in the spring by the Florida Medical Association (FMA) Health Policy Center and the Florida State University (FSU) Center for Economic Forecasting & Analysis.

 

Among the highlights, private practice physicians' offices in Florida annually support 451,500 jobs, accounting for five percent of the state's total employment. They generate $22 billion in disposable income and contribute $56 billion in total economic activity, plus $3 billion in government revenues. Individually, private practice physicians in Florida support an average of 19 additional jobs representing $913,000 in income, and $2.3 million in total economic activity.
"While many studies have addressed how the economy impacts the healthcare industry, few have taken a closer look at how physicians impact Florida's economy," said Steven R. West, MD, president of FMA. "In the current economic climate, these critical dynamics are important to understand."

 

The FMA/FSU study, which does not represent hospital-based physicians or healthcare venues such as correctional facilities or nursing homes, used the Regional Economic Models, Inc. (REMI) input-output model, which takes into account interrelationships among industry sectors and measures the impact of shifts in economic variables on overall economic activity. 

 

"Private practice physicians contribute to Florida's economy in many ways: they create jobs and income through employment, purchase goods and services from local businesses, and generate considerable tax revenue for government at all levels," said Timothy J. Stapleton, executive vice president of FMA. "These factors lead to increased household spending and greater economic activity in every community."

 

Based on the findings, economic projections by 2020 reflect the state's private practice physicians will employ nearly 650,000 for a payroll of more than $41 billion, $93 billion in total economic activity, and some $6 billion in government revenues.

 

Despite the impressive numbers, Florida faces the nation's third-largest physician shortage and will need 63 percent more primary care physicians within a decade to avoid a shortage in that field, according to Kaiser Family Foundation and the American Academy of Family Physicians.

 

"Florida ranks 27th in the number of physicians per 100,000 population, with 243 physicians per 100,000 population, compared to 263 nationally," the report said. "This means that Florida would have to increase its physician population by 10 percent, or 24 doctors per 100,000 population, to meet the national average. Considering that Florida has the nation's highest proportion of residents age 65 and over, Florida's demand for healthcare services is significantly higher than other states. Florida's below-average physician ratio signals a dramatic current and future physician shortage."

 

The study cited several factors contributing to Florida's physician shortage, many of which relate to the policy and regulatory environments in which physicians practice medicine. Caps on medical school enrollment, a shortage of residency positions in Florida, and a lack of incentive to pursue a medical degree were listed as primary structural factors. The challenges of liability issues, Medicaid reimbursement, and the administrative burden associated with managed care organizations were among key regulatory factors.

 

Expanding the state's ratio of physicians per 100,000 population by 10 percent to meet the national average of physicians per state population would require an additional 50,000 jobs in 2012 representing $3.6 billion, to 65,000 jobs in 2020 representing $6.1 billion. As a result, the total economic activity would jump from $6.5 billion in 2012 to $9.3 billion in 2020. 

 

Creating another 2,700 GME residency positions to meet the average national ratio of Graduate Medical Education (GME) residents to the state population would maintain another 34,000 jobs in 2012 representing $2.4 billion, to 44,000 jobs in 2020 reflecting $4.1 billion. The result: $4.3 billion in total economic activity in 2012; $6.3 billion in 2020.