BACKGROUND (Chapters I & II, Appendix I) P.L. 94-123, the Veterans' Administration Physician and Dentist Pay Comparability Act of 1975, directed the Office of Management and Budget (OMB) to . examine the nature and extent of problems Federal agencies face in recruiting and retaining physicians and dentists, analyze agency practices and programs used to recruit and retain these professionals, compare remuneration of Federal and private physicians and dentists, and . develop proposals to deal with problems found. This report is submitted in compliance with that require ment. The Federal Government employs approximately 33 thousand physicians and 7 thousand dentists, the vast majority of whom are engaged in patient care. Some 97 percent of federally employed physicians and dentists work in three agencies: the Veterans Administration (VA), the Department of Defense (DOD), and the Department of Health, Education, and Welfare (HEW). OMR therefore focused its analysis on these three agencies, using quantitative analytical techniques to the extent possible. Both the analyses and proposals in the report assume no radical changes in the U.S. health care system or in current Federal health programs. FINDINGS Recruitment and Retention The study determined that in general the three major Federal employers of physicians and dentists do not have serious staffing problems. - - The physician staffing problems that do exist are Dentists are available in excess of needs. While in the next year or two DOD faces a potential small shortfall of physicians, in the 1980s the numbers of physicians available to both HEW and DOD are expected to exceed substantially the numbers now employed. DOD, HEW and the VA all have programs designed to improve their physician staffing situation. However, in all three agencies there is room for improvement in these programs. Specific findings with respect to recruitment and retention of physicians in each of the three major employing agencies and for federally employed dentists are outlined in the sections below. A. VA Physicians (Chapter III) Because the pay bonus provided VA physicians in the autumn of 1975 is so new that its effects cannot be well identified, analysis of VA recruitment and retention experience was focused on a period of approximately five years immediately preceding this bonus. The VA, it was found, had been able to increase substantially the size of its physician workforce in the years before the bonus. This increase from 5,800 to 6,800 full-time equivalent physicians between 1969 and 1974 was achieved without an intensive, systematic recruiting effort. Moreover, it was achieved despite a salary freeze and salary limitations which affected a sizeable portion of the physician workforce from the autumn of 1973 onward. During the pre-bonus period, loss rates did not increase even for the senior groups affected by the salary limits -- and hiring appears to have increased somewhat. Vacancy rates in the senior positions affected by the salary limits did not appear to be higher than those for the physician staff in general. - Not only did the VA physician workforce grow in size in the pre-bonus years, but its quality as measured by a number of indicators also improved. The percentage of physicians with advanced formal qualifications increased. The fraction with faculty appointments to medical schools increased from 1/3 to over 1/2. The number and strength of affiliations between VA hospitals and medical schools also grew. Paralleling a similar change in the U.S. physician workforce as a whole, the percentage of physicians who received their medical school training in foreign countries increased, a change which the VA feels may engender problems in the quality of patient care provided. Evidence that this change, in fact, engenders quality problems in the VA was not found; however, a more comprehensive assessment of this change should be made. The number of part-time physicians in the workforce increased by over 100 during the five years preceding the bonus while the number of full-time physicians increased by less than 10%. The VA has expressed concern about the implications of this trend. This study found strong evidence that the large growth in part-time physicians is a consequence of the VA's policy of expanding and enhancing medical school affiliations. This growth is likely to continue while that policy is pursued in its present form. Physician vacancy rates differ substantially among VA hospitals. A number of factors including hospital size and location, character of the patient caseload, medical school affiliation, relative size of the hospital's research effort, and staff growth rate were analyzed by means of multiple regression analysis to determine whether or not they affected hospital vacancy rates. factors were found to account for little of the variance among hospitals, indicating that changes in these factors are unlikely to affect vacancy rates. These The VA has effectively employed some policies for improving its physician staffing situation. These include economizing on the use of physicians in administrative positions, using contracts to secure scarce specialists, and using auxiliary personnel (such as physician assistants) to economize on physicians in patient care positions. The agency has not undertaken intensive recruiting efforts. Its current limited recruiting activity lacks facility-to-facility links which could probably greatly improve its effectiveness. B. DOD Physicians (Chapter IV) An examination of the Defense Department's current physician staffing situation found that the number of physicians employed was generally at or close to the number authorized. Prospects for the future were examined by the use of detailed projection models. The models indicate that with the compensation increases provided by recent bonus legislation (P.L. 93-274 enacted in 1974), the physician workforce is likely to decrease by a few percent in the next year or two as the supply of draft-obligated physicians is exhausted. The workforce then will |