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A Rational Approach to Projecting Primary Care Growth
April 1, 2022 | 3DHealthGiven that 52% of office-based physicians are primary care (and represent 43% of the physician shortage) in the U.S., we are often asked about the best way to project growth across our partners’ primary care base. We are not fans of a placeholder growth percentage (like x% per year) absent an underlying rationale. Rather, we believe that there are five key considerations that must be fully explored when projecting primary care growth:
- Filling Existing Excess Capacity
- Planning for Succession
- Opening Access to Primary Care
- Supporting Key Specialists
- Capturing Market Opportunities
Filling Existing Excess Capacity
The first step in projecting growth across a primary care base is to ensure that the existing primary care assets (physicians & APPs) are being maximized. The differences in patient panel size are dramatic between providers practicing at the 25th percentile, median and 75th percentile. Across all of the primary care specialties, a provider practicing at the 25th percentile manages 31% less patients than a provider practicing at median and 53% less than at the 75th percentile. Put differently, moving a provider from the 25th percentile to median grows their patient base by 31%, and by 53% if they are able to meet the 75th percentile.
As an industry we have been trying to figure out the best way to increase the productivity of employed primary care physicians since the early 1990s. In our experience, it takes a combination of clear patient panel targets, consistent and accurate reporting of actual vs. targeted productivity, assistance for those struggling to get ramped up, accountability for not hitting targets, and a willingness to separate from physicians that are not willing or able to meet targets.
Planning for Succession
Before you can grow, you first need to maintain your existing primary care patient base. Based on our national study, 90k: The Shortage of Physicians Across the U.S., around 46% of office-based physicians in the U.S. are 55 or older, with 17% aged 65+. This reality presents a unique challenge and opportunity for our partners. The challenge is to adequately plan for the potential retirement of aging employed physicians. The opportunity is to help replace independent physicians, whether they are currently aligned or not.
We work closely with our partners to identify both aligned and market physicians that will hit a retirement age assumption in the coming three years, and then have a conversation on a provider-by-provider basis as to the likelihood that someone might retire.
Opening Access to Primary Care
The demand for primary care physicians in the United States is projected to grow from about 266k today to over 320k by 2040. At the same time, our work across the country has concluded that 24% of primary care physicians are closed to new, commercial patients. An additional 4% of physicians are selectively open, meaning the front desk takes a potential patient’s information and talks to the provider about whether or not to allow them into the practice. Practically speaking, the demand for primary care will increase by 20% over the next 18 years while 28% of existing primary care physicians across the U.S. do not accept new, commercial patients.
We believe that figuring out the best way to always say yes to new patients around access can increase primary care market share in a meaningful way. As a starting point, this requires consistent scripting for the front desk and/or call center along with provider buy in. We recommend never saying that a provider is closed – instead offer an alternative provider, location or setting. It is critical to perfect this language, because it is at the heart of the message that you are sending to the market each time a potential new patient calls.
Supporting Key Specialists
Historically, specialists have relied on an assortment of referral avenues in order to fill their practices – from employed primary care physicians, independent aligned physicians, competitor primary care physicians, non-aligned market physicians, the ED, and through patient self-referral. As payer networks tighten (and potentially close) and competitors reduce leakage, the possibility exists that specialists will need to rely on employed or captive primary care physicians to fill their practices.
Through our 3Dhealth Physician Demand Model, we are able to help our partners identify the strategic and economically critical service lines that require a larger captive referral base. Once our partners know that they need X number of additional primary care providers to support their key specialists, and this calculus gets baked into the growth plan.
Capturing Market Opportunities
The final consideration in crafting a primary care growth plan is to identify market opportunities across the primary care specialties. This is typically in the form of a market need for net new primary care physicians and/or by identifying independent physicians that are a good fit for employment or increased alignment.
We have found over the last 20+ years that the reason this last step is so difficult to implement is due to an industry lack of off-the-shelf data. For this reason, we created not only the most credible demand data in the industry, but also coupled it with our primary research-driven approach to gathering and testing the market supply data. The result is the ability to show the geography and magnitude of market shortages in primary care, as well as the list of independent primary care which represent an alignment target.
Final Thoughts
As you can see, our partners have moved well beyond estimating a generic growth rate for primary care and believe the approach outlined above produces the most accurate and impactful results.
For questions or more information, please contact Ron Flower at RFlower@3Dhealthinc.com or Shane Foreman at SForeman@3Dhealthinc.com.