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Physician Office Quarterly Update - Q3 2016


Trend: Physician Training Programs Look to Address State Shortages

States experiencing alarming shortages of doctors are beefing up medical training and residency programs, hoping that physicians will be more likely to stay in the states where they train. Severe shortages are concentrated in southern states with many rural, low-income, and minority communities. Arkansas opened its second medical school in summer 2016 through a partnership with the New York Institute of Technology College of Osteopathic Medicine, according to the Pew Charitable Trusts. Another partnership school seeking to address regional shortages opens this fall in southern New Mexico. States including Georgia and Texas are looking to attract future practitioners by increasing residency spots. A number of states offer financial incentives to students willing to make clinical rotations in high-need areas. Other programs addressing shortages include locating new medical school branches in underserved areas; passing laws expanding allowable duties of residents, nurse practitioners, and physician assistants; and adopting telemedicine tools (audiovisual technology) to treat patients in remote areas.

Industry Impact

The health care sector will likely continue to look at new ways to address current shortages and produce sufficient physicians to meet future health needs. The latest projections from the Association of American Medical Colleges (AAMC) predict a shortfall of about 62,000 to 95,000 physicians by 2025.


US consumer prices for medical care commodities, which may impact physician offices' operational costs for equipment and supplies, increased 3.6% in July 2016 compared to the same period in 2015.

US consumer prices for medical care services, an indicator of profitability for physician offices, rose 4.1% in July 2016 compared to the same month in 2015.

Total US revenue for physician offices rose 7.4% in the first quarter of 2016 compared to the previous year.