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By the Numbers: Physicians’ Economic Impact

By the Numbers: Physicians’ Economic Impact

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A recent “economic impact” report from the American Medical Association attributes $2.3 trillion in 2015 economic activity — about three-quarters of the total for healthcare — either directly or indirectly to physicians.

One could interpret this in two ways. First, that physicians are important contributors to the economy and the linchpins in U.S. healthcare. That was the AMA’s stated intent.

And second, that the huge and soaring costs of healthcare in the U.S. can be laid at the feet of physicians. Did the AMA really mean to send that message?

We put the question to an AMA representative, whose response focused exclusively on the first interpretation. He provided a quote from AMA President David Barbe, MD, MHA: “The AMA’s economic impact study is intended to underscore the need to foster a positive practice environment and build a strong and vibrant physician workforce that will help grow the economy, foster community development, and improve the health and well being of the nation.”

Hmm. It’s hard not to think that, if physicians were directly or indirectly responsible for $2.3 trillion in “sales revenue” (the report’s words) in 2015, and it goes up to $2.5 trillion or more in 2018, as it surely will — physicians are directly or indirectly responsible for that increase.

But fine, let’s take the AMA’s preferred view.

“Physicians also play a vital role in the state and local economies by creating jobs, purchasing goods and services, and supporting state and community public programs through generated tax revenues,” the report states. “At the national level, physicians created a total of $2.3T in direct and indirect economic output (i.e., sales revenues) in 2015.”

Now, the $2.3 trillion figure includes both direct and indirect benefits, so the comparison to overall health spending is less apples-to-apples, more apples-to-the-trees-grown-from-their-seeds-and-the-apples-they-make-and-on-and-on. Indirect benefits includes things such as equipment purchased by physicians, administrative services, cleaning services and the like — line items that aren’t included in the $3.2 trillion of healthcare spending nationally. “Induced” benefits are also included in the national figure, and represent costs even further removed from the practice of medicine, taking into account the spending of physicians and their employees on housing, food, cars, etc.

The report puts physicians’ “direct output” — their revenues, wages, benefits, and taxes paid — at $821.6 billion.

The report is tailored for use by policymakers, legislators and “thought leaders,” and is based on three primary data sources: the 2015 AMA Masterfile was used to find the number of physicians in each state. Then 2015 medical practices data from a leading data aggregator and 2015 IMpact analysis for PLANning (IMPLAN) were consulted for per-physician revenue and cost data and state-level multipliers.

Finally, the report included comparisons to other “National-Level Comparator” industries. Patient-care physicians were compared to higher education, community care facilities, legal services and home health based on total economic output, jobs and wages and benefits supported.

By every reported measure, physicians’ impact dwarfed that of other industries.

2018-01-10T14:30:00-0500

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