Today the Police, Tomorrow the Doctors
San Diego County has become an increasingly difficult place to locate unless you are wealthy. It seems that everyone says they could not afford to buy the homes they live in today. With average home prices getting close to $600,000, many two-career incomes are priced out of our market. Less than 10 percent of the people in San Diego are now able to buy a home. America’s finest city has over 100 open positions in the police department. The reason for this: the police do not earn enough money to afford buying a home in the community they service. The same has become true for firemen, teachers and most other civil servants.
The 2005 Physician Workforce and Compensation Survey, conducted by the San Diego County Medical Society, suggests that this problem of recruitment is happening with physicians. Despite many open opportunities for family physicians and internists, these positions are becoming increasingly hard to fill. Potential recruits compare the incomes with the cost of housing and realize they will not be able to live in a home they and their families expect. We are not talking mansions here, simply a nice house in a nice area with good public schools. Physicians in America are not ready to work hard for a career and live in a condominium.
The recruitment problem is not limited to primary care physicians. The Workforce Survey found significant recruiting difficulties for general surgery, hand surgery, neurology, ophthalmology, orthopedic surgery, otolaryngology/ head and neck surgery, psychiatry, radiology, and urology. In all of these specialties, there is a shortage in San Diego County.
What will happen to San Diego County is an open sociological question. With our perfect weather, beautiful landscapes and great amenities such as golf courses, we are an obvious destination for high rolling corporate executives, professional athletes, and others fortunate to earn very high salaries. But where do the service workers live, and will physicians become relegated to service workers?
We are also a great destination for conventions and vacation travel. Our hotel and tourist taxes are among the lowest of any major cities, something which I think is crazy given our city’s financial troubles. Increasingly, San Diego has become a place for tourists, conventions, and the rich. Is this a sustainable trend? Certainly not.
Given the attractiveness of San Diego County, cost of housing is not likely to decline. Amazingly, South Orange County and Santa Barbara are actually more expensive. People there move here to get more for their money! No, we are stuck with high housing prices into the indefinite future. How much more can they go up is the disturbing question.
As a homeowner, I am personally happy when the value of my home goes up. I have earned more money (on paper) in three years in my home than I have in thirty years in my retirement account. For us lucky ones, our homes are our nest eggs. But our children will have many less options locally and are likely to have to move if they want the standard of living we have.
Getting back to the dilemma for recruiting new physicians, we are between a rock and a hard place. On one hand, the cost of housing is very high. On the other hand, reimbursement for physicians in San Diego County is very low compared with many other areas. This combination makes our situation for filling physician shortages a critical problem.
Why is reimbursement low in San Diego County? Amazingly, our geographic adjustment for Medicare is the same as in Bakersfield and may other rural areas where the cost of living is much lower. This “GPCI problem” is being addressed vigorously by the San Diego County Medical Society working with the CMA. Unfortunately, changing this requires an act of Congress, which is never easy. The federal government is in no mood to increase any healthcare reimbursement.
The other major reason why reimbursement is so low in San Diego County is the penetration of managed care. For most of the United States, managed care was a passing phenomenon in the 1990s which came and went quickly. For San Diego County, managed care came early and never left. In some ways, San Diego County is a managed care success story. Most medical groups have been able to survive with deeply discounted reimbursement. The inefficiencies of inappropriate and unnecessary care were weeded out in the 1990s and have never returned. In the 1990s, one could argue that we had a physician surplus in many specialties, and physicians took managed care contracts just to compete and survive. The vast majority of people who get their health insurance through their employer have managed care and all major medical groups in San Diego accept it. We are now locked into a managed care medical market.
This situation would be okay if overhead costs and housing expenses were stable. Neither is true. There is no managed care homeostasis. Physician reimbursement and physician incomes have not risen much in the last 10 years. Physician expenses and cost of living in San Diego have risen dramatically. We are heading for a crisis.
We all know San Diego County continues to grow with people who can afford to live here. The growth in population is greater proportionately than the growth in physicians. We are reeling into a major physician shortage. Despite the attractiveness of our area, the proverbial “sun tax” is now so steep as to drive physician families away.
The City of San Diego will have to solve the police recruitment problem. Some combination of higher wages and housing allowances will be needed. Less in pensions and more for the people working in real time would help. So would a greater tax on those who hungrily visit here.
But who will solve the physician recruitment problem? No one is likely to take on this cause other then we physicians. We will not be able to directly change the cost of housing. Some stability is likely to occur there. We can change the reimbursement climate. San Diego must be considered a high-cost-of-practice environment by all payers who consider geographic factors in reimbursement, specifically Medicare. Together we must challenge the managed care plans to provide financial reward for our efficiencies so that physicians receive the benefits of managed care rather than just the shareholders and Woodland Hills insurance executives. Finally, as more healthcare costs are placed on our patients through high deductible health plans and health savings accounts, we should not beat each other up through deep discounting, and charge appropriate fees for our professional work.
Sociologically, San Diego County is in for some interesting times with big questions as to who can afford to live and work here. Physicians are an increasingly important part of this reality and being united as a profession as never been more important.