Primary Care Physicians: Managing Supply in Canada, Germany, Sweden, and
the United Kingdom (Letter Report, 05/18/94, GAO/HEHS-94-111).

In the debate over health care reform, managed care proposals call for
increased dependence on primary care physicians. In the United States
today, however, specialists outnumber primary care doctors, while many
areas of the country suffer from a scarcity of both. Some health policy
analysts believe that this mix and supply of physicians could slow the
implementation of health care reforms. GAO examined the methods used by
four nations--Canada, Germany, Sweden, and the United Kingdom--to manage
their physician supply and specialty distribution. All these
industrialized countries have instituted universal care coverage yet
spend a lower percentage of their gross domestic product on health care
than the United States does. This report also identifies strategies used
by these countries to encourage doctors to practice in medically
underserved areas.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-94-111
     TITLE:  Primary Care Physicians: Managing Supply in Canada, 
             Germany, Sweden, and the United Kingdom
      DATE:  05/18/94
   SUBJECT:  Foreign governments
             Health care services
             Medical education
             Medical services rates
             Health care cost control
             Physicians
             Medical economic analysis
             Income statistics
             Rural economic development
             Education or training costs
IDENTIFIER:  Sweden
             Germany
             Great Britain
             Canada
             Clinton Health Care Plan
             National Health Care Reform Initiative
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Government Operations, House of
Representatives

May 1994

PRIMARY CARE PHYSICIANS - MANAGING
SUPPLY IN CANADA, GERMANY, SWEDEN,
AND THE UNITED KINGDOM

GAO/HEHS-94-111

Primary Care Physicians


Abbreviations
=============================================================== ABBREV

  NHS - National Health Service

Letter
=============================================================== LETTER


B-251295

May 18, 1994

The Honorable John Conyers, Jr.
Chairman, Committee on Government Operations
House of Representatives

Dear Mr.  Chairman: 

As policymakers discuss how to reform the U.S.  health care system,
several leading proposals call for increased emphasis on managed
care.  Under these proposed plans, the health delivery system would
require a greater dependence on primary care physicians than
currently exists.  Today in the United States specialist physicians
outnumber primary care physicians, while many areas of the country
have a scarcity of both.  Some health policy analysts believe this
mix and supply of physicians could inhibit implementation of proposed
health care reforms. 

In response to your concern about the proportions of primary care and
specialist physicians in the United States, we examined the methods
used by other countries to manage their physician supply and
specialty distribution.  We also identified strategies used by these
countries to encourage physicians to practice medicine in medically
underserved areas.  Appendixes I through IV present our findings in
depth.  Appendix V discusses medical training in the countries
reviewed. 

Our review covered Canada, Germany, Sweden, and the United Kingdom. 
These countries are similarly industrialized nations, and all have
instituted universal care coverage yet spend a lower percentage of
their gross domestic product on health care than the United States
does.  Two of the countries have health delivery systems that
expressly manage health services through primary care physicians. 
(Our review's scope and methodology are discussed in depth in app. 
VI.)


   BACKGROUND
------------------------------------------------------------ Letter :1

The health care systems of Canada, Germany, Sweden, and the United
Kingdom differ from the United States with respect to the roles of
government, the organization and delivery of health care services,
and financing.  Canada and the United Kingdom established primary
care as the cornerstone of their health care delivery systems; more
recently Germany and Sweden have implemented reforms to place greater
emphasis on primary care. 

The proportions of physicians per capita and the definitions of
primary care physicians differ among the four countries reviewed and
from the United States.\1 As of 1990, the number of practicing
physicians per 100,000 inhabitants ranged from 140 in the United
Kingdom to 310 in Germany compared with 230 in the United States.  In
Germany,\2 as in the United States, family physicians, general
practitioners, general internists, and general pediatricians are
considered primary care physicians.\3 In Canada, the United Kingdom,
and Sweden, only general and family practitioners are considered
primary care physicians.  All other physicians are considered
specialists.  As few as 18 percent of Sweden's doctors are primary
care physicians, and as many as 58 percent are primary care
physicians in the United Kingdom.  These figures compare with about
34 percent primary care physicians in the United States but should be
considered in light of the differences across nations in definitions
of primary care and specialist physicians. 


--------------------
\1 Throughout the report we use the term "primary care physicians"
for physicians who "specialize" in primary care and who deliver
primary care services; we use the term "specialists" for physicians
specializing in other types of medicine. 

\2 Until 1993, Germany included only general practitioners as primary
care physicians. 

\3 In some cases in the United States, obstetricians/gynecologists
are also considered primary care physicians.  In addition, in the
United States, Germany, and Sweden, other specialists may provide
some primary care services to their patients although they are not
considered primary care physicians. 


   COUNTRIES USE HEALTH POLICIES
   AND OTHER STRATEGIES TO MANAGE
   PHYSICIAN RESOURCES
------------------------------------------------------------ Letter :2

The four countries reviewed attempt to manage their physician
resources as one of many methods to contain health care costs.  Since
physicians determine the majority of resources spent in the health
care system, country officials believe that an oversupply of
physicians is a factor contributing to increased health care costs
and so try to limit the total physician supply.  They also believe
that basic health services can be provided at a lower cost by primary
care physicians than by specialists and therefore strive to maintain
a sufficient number of physicians practicing in primary care. 

The public financing of medical education has afforded the
governments some influence in managing physician resources,
specifically in Canada, Sweden, and the United Kingdom.  Government
intervention in the health care system has also resulted in the
development of a stronger role for primary care physicians.  In
Canada and the United Kingdom, the national health care systems have
long mandated a central role for primary care physicians in the
delivery and use of health care services.  In Germany and Sweden,
mandates aimed at enhancing the primary care physician's role are
very recent.  In general, the countries reviewed use both regulatory
and incentive-based strategies to influence physician supply, mix,
and geographic distribution. 


   STRATEGIES INCLUDE CONTROLS ON
   PHYSICIAN SUPPLY AND MIX
------------------------------------------------------------ Letter :3


      REGULATORY STRATEGIES
---------------------------------------------------------- Letter :3.1

Unlike the United States, the countries reviewed have national
targets or goals for supply and mix of physicians.  Typically,
however, desired ratios of primary care to specialist physicians are
based on existing or historical proportions rather than on scientific
formulas, and in some countries these ratios are implicit rather than
explicitly specified.  To achieve supply and mix goals, the
countries' regulatory strategies include managing

  medical school enrollment,

  specialist training slots, and

  physician employment opportunities. 

Several countries manage physician supply through restrictions on
medical education.  For example, government officials in Canada,
Sweden, and the United Kingdom determine the number of students that
can enroll in medical school.  In these countries, where medical
education is publicly financed, government involvement in these
decisions is not considered unusual.  In Germany, however, where
medical education is also publicly financed, the German Supreme Court
declared enrollment limits unconstitutional. 


         SCHOOL ENROLLMENT AND
         TRAINING LIMITS
-------------------------------------------------------- Letter :3.1.1

Countries also use restrictions on education to manage physician mix. 
Since the early 1970s, Canada and Sweden have limited the types of
residency training slots.  In Canada, primary care and specialist
physician residency training slots are apportioned according to goals
that have been negotiated between government officials and educators. 
In Sweden, regional governments in consultation with health officials
determine the distribution of residency slots.  Both countries have
adjusted the mix of residency positions over time.  Recently,
concerned about the declining supply of specialists, two Canadian
provinces are considering raising the number of residency positions
for specialists.  In contrast, Sweden is concerned about the supply
of primary care physicians and is considering increasing the
proportion of slots allocated to primary care. 


         EMPLOYMENT LIMITS
-------------------------------------------------------- Letter :3.1.2

Some countries' limits on employment opportunities affect physician
supply and distribution.  Under recent health care reform in Germany,
physician associations have helped develop physician-to-population
ratios and have closed employment to physicians in regions that
exceed these ratios.  German officials expect physicians to challenge
the constitutionality of this employment restriction strategy.  In
the United Kingdom, the government manages employment opportunities
for specialists indirectly.  The National Health Service funds all
specialist positions in hospitals.  Since there are many more trained
specialists than there are funded positions, these trained
specialists are considered trainees until a position becomes
available. 


      INCENTIVE-BASED STRATEGIES
---------------------------------------------------------- Letter :3.2

The countries also use incentive-based strategies to manage physician
resources to promote primary care physicians.  These strategies
include

  modifying physician fee schedules to narrow income disparities
     between specialist and primary care physicians,

  reducing fees paid to specialists for services to patients not
     referred by a primary care physician,

  raising the out-of-pocket costs of patients who seek care from
     specialists before consulting a primary care physician, and

  increasing the professional autonomy of primary care physicians. 


         FEE MODIFICATIONS
-------------------------------------------------------- Letter :3.2.1

Specialists in Germany earn on average 42 percent more than primary
care physicians, and health officials believe this potential for
greater income influences medical students to choose specialty
positions over primary care.  To increase the proportion of primary
care physicians, Germany is in the process of modifying physician fee
schedules to reduce the income disparity.  In the other countries
reviewed, officials told us that they believe income differentials
are not large enough to encourage physicians to train longer to
become specialists. 

In Canada, the government reinforces the importance of the primary
care physician in part by discouraging specialists from providing
care without a referral.  Specialists providing services without a
referral from a primary care physician receive a lower reimbursement
for services than they would otherwise.  Typically, patients visit
primary care physicians to obtain a referral for specialist care.  A
somewhat similar strategy fostering the use of primary care employed
by Sweden and the United Kingdom creates financial disincentives for
patients who seek care from specialists without a primary care
physician's referral.  Under Sweden's new health reform legislation,
for example, patients seeking care directly from a specialist will
pay more out of pocket than if they were referred by a primary care
physician. 


         PHYSICIAN AUTONOMY
-------------------------------------------------------- Letter :3.2.2

Sweden is also attempting to provide its primary care physicians, who
are largely salaried government employees, greater autonomy from
government bureaucracy.  Regional governments are expected to
implement reforms\4 that will entail hiring primary care physicians
as contractors and provide for the physician's greater independence
in making certain business decisions. 


--------------------
\4 Rising health care costs, lack of patient choice of physicians,
and low productivity among physicians, prompted significant health
care reforms.  In May 1993, the Swedish Parliament introduced a
Family Doctor System designed to increase the number of primary care
physicians. 


   COUNTRIES TRY TO MANAGE
   PHYSICIAN RESOURCES IN
   UNDERSERVED AREAS
------------------------------------------------------------ Letter :4

Three of the countries reviewed have confronted the problem of
ensuring an adequate supply of physicians in rural areas.  As in the
United States, major barriers to attracting physicians to rural areas
include the dearth of social conveniences and medical technology as
well as isolation from a medical community.  Canada, Sweden, and the
United Kingdom have tried several approaches to encourage primary
care physicians to practice in rural areas: 

  limiting the number of physicians practicing in overserved areas,

  financial incentives, and

  assigning medical student trainees to work in rural areas. 

Canada and Sweden are applying similar measures to attract certain
specialists to underserved areas. 


---------------------------------------------------------- Letter :4.1

We submitted sections of a draft of this report to health care
officials in each of the study countries to review for accuracy.  We
have incorporated their comments where appropriate. 

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date.  At that time we will send copies to interested
congressional committees and will make copies available to others
upon request. 

Please contact me on (202) 512-7119 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
VII. 

Sincerely yours,

Sarah F.  Jaggar
Director, Health Financing and
 Policy Issues


MANAGING PHYSICIAN RESOURCES IN
CANADA
=========================================================== Appendix I

Within Canada's national health insurance program, the 10 provinces,
serving as single public payers, use various strategies to manage the
supply, specialty mix, and geographic distribution of physicians.  To
contain aggregate physician supply, the Canadian provinces reduce
medical school enrollment and limit the number of foreign medical
school graduates who can practice in the province.  To control
physician mix--specifically, to maintain equal proportions of primary
care and specialist physicians--provinces distribute residency
positions by specialty.  To address physician supply needs in rural
areas, some Canadian provinces use training and financial incentives. 


   STRATEGIES TO ADDRESS CANADA'S
   TOTAL PHYSICIAN SUPPLY
--------------------------------------------------------- Appendix I:1

Many Canadian health care experts believe that the country has an
oversupply of physicians and that this oversupply has contributed to
Canada's rising health care costs.  A 1991 government-commissioned
study of medical resources reported that the growth rate in physician
numbers, which has outpaced the nation's population growth, has
resulted in a greater number of services provided per patient and
greater costs but not a commensurate improvement in the health of
Canada's population.\1

Efforts to contain the growth of physician supply have been in effect
since the 1980s when Canadian provinces began reducing medical school
enrollment.  For the 1993 academic year, provinces cut first-year
medical school enrollment by an average of 8 percent, with further
reductions planned for 1994.  In addition, the provinces intend to
trim the number of first-year residency positions by lowering the
number of foreign medical school graduates allowed in Canadian
residency programs.  Also, since the 1980s, Quebec has limited the
number of foreign medical school graduates allowed to practice in the
province. 


--------------------
\1 Barer, Morris L.  and Greg L.  Stoddart, "Toward Integrated
Medical Resource Policies for Canada," prepared for the
Federal/Provincial/Territorial Conference of Deputy Ministers of
Health, June 1991.  The study recommended that the provinces
eliminate any growth in physician supply in excess of the population
growth rate. 


   STRATEGIES TO MANAGE PHYSICIAN
   MIX
--------------------------------------------------------- Appendix I:2

In Canada, family and general practitioners are considered primary
care physicians.  Patients typically obtain the referral of their
primary care physician to seek specialist care.  The primary care
physician's central role, serving as the patient's first point of
contact, sustains the demand for primary care services and enhances
the professional status of family and general practitioners.  More
Canadian medical students apply for postgraduate training in primary
care than there are training slots available. 

The government has established financial disincentives that
discourage specialists from providing care without a referral and
reinforce the centrality of the primary care physicians' role. 
Specifically, the government uses a fee schedule that reimburses
specialists at a higher rate when the patients they see were referred
to them by a primary care physician.\2 Otherwise, specialists receive
a fee equal to that paid to primary care physicians. 

Overall, Canada has equal proportions of primary care and specialist
physicians and strives to maintain this balance.  The primary care to
specialist physician ratio was not derived from an assessment of
health care needs but has existed since the implementation of
Canada's current health care system in 1971.  At that time, the
number of primary care physicians roughly equaled the number of
specialists, and this ratio appeared suited to support a new health
care delivery system in which family physicians would continue to
serve as the first point of contact.  In addition, medical schools
have controlled residency slots as a way to maintain a balanced
physician mix, and provincial governments' funding of medical schools
has indirectly demonstrated government endorsement of this policy. 
Medical schools offer roughly half of all training opportunities in
family medicine.  Table I.1 shows that, of the total number of
certified physicians, 53 percent are primary care physicians and the
rest are specialists. 



                          Table I.1
           
            Number of Primary Care and Specialist
               Physicians in Canada as of 1990

Physician type                              Number   Percent
------------------------------  ------------------  --------
Primary care physicians                     27,334        53
General internists                           2,429         4
General pediatricians                        1,487         3
All other specialists                       20,591        40
============================================================
Total physicians                            51,841       100
------------------------------------------------------------
Note:  These figures do not include physicians in training. 

Source:  Department of Health and Welfare, Canada. 

Despite efforts to control residency slots, the percentage of primary
care physicians has gradually risen, largely a result of a higher
number of retirements among specialists.  Some provinces--government
officials and medical school deans--have recently begun meeting to
determine what mix of residency slots will maintain a roughly
one-to-one ratio of primary care physicians to specialists.  In
Quebec, government and medical school officials have recently decided
to reduce the percentage of primary care slots because they believe
there is a shortage of specialists. 


--------------------
\2 Specialists can also receive referrals from other specialists. 
This is common for procedures such as diagnostic tests and surgery. 


   STRATEGIES TO BUILD PHYSICIAN
   SUPPLY IN RURAL AREAS
--------------------------------------------------------- Appendix I:3

According to Canadian health care officials, primary care physicians
are well distributed throughout Canada's rural areas as a result of
programs designed to attract primary care physicians to these areas. 
A 1992 Canadian Medical Association study reported that the
percentage of the nation's family physicians practicing in rural
areas (20 percent) compared favorably with the percentage of
Canadians living in those areas (25 percent).  In contrast, the study
found that only about 5 percent of specialists practiced in these
areas. 

Our review examined in particular Ontario's and Quebec's efforts to
increase their rural areas' supply of physicians.  The efforts of
these provinces have been in place for as long as 15 to 25 years and
consist of training students in rural areas as well as financial
incentives. 

To foster the practice of primary care medicine in rural areas,
Ontario and Quebec medical schools have offered both students and
primary care residents training opportunities in these areas.  In
addition, the provinces have offered a variety of financial
incentives directed at students and practicing physicians.  Medical
students are eligible for educational grants in exchange for service
in a rural area after they become physicians.  Ontario provides an
annual tax-free grant of about $8,100 for up to 4 years to primary
care physicians who establish practices in rural areas.  To
physicians who locate in rural areas, Quebec pays 120 percent of the
fee schedule; all other physicians receive 70 percent of the fee
schedule for the first 3 years of practice. 

More recently Ontario and Quebec have taken action to contend with
the shortage of specialists in rural areas.  As of August 1993,
Ontario tentatively agreed to provide a guaranteed income and other
benefits to certain specialists--internists, general surgeons,
obstetricians, gynecologists, psychiatrists, and anesthesiologists
(commonly called general specialists)--who agree to practice in rural
areas.  In July 1994, Quebec medical schools will require all general
specialty residents to complete a minimum 3-month rotation in a rural
area. 


MANAGING PHYSICIAN RESOURCES IN
GERMANY
========================================================== Appendix II

Germany's key strategies for managing physician resources were
established in 1993 health reform legislation and remain somewhat
controversial.\1 The government determined that Germany has an
oversupply of physicians, and in particular, a disproportionate
number of specialists.  To address these resource problems, the new
legislation calls for (1) ceilings on physician posts to control
overall numbers of physicians and (2) reforming the physician
reimbursement system to reduce the income disparity between primary
care and specialist physicians. 


--------------------
\1 The German Health Care Structure Reform Act of 1993, adopted in
December 1992, mandated structural reforms affecting various sectors
of the health care system.  Details of Germany's 1993 health care
reforms are presented in 1993 German Health Reforms:  New Cost
Control Initiatives (GAO/HRD-93-103, July 1993). 


   STRATEGY TO CONTROL GERMANY'S
   OVERALL PHYSICIAN SUPPLY
-------------------------------------------------------- Appendix II:1

The German Medical Association and the Federal Association of
Sickness Fund\2 Physicians as well as the Federal Ministry of Health
contend that Germany currently has an oversupply of physicians. 
Within the last 30 years, the physician supply in former West Germany
grew approximately 170 percent while the population grew about 16
percent.  By 1991, former West Germany had about 202,000 physicians,
or roughly 315 physicians per 100,000 inhabitants.  The government
asserts that the increased number of physicians contributes to the
growth in services rendered and ultimately to health care costs.  In
response, the government established a goal to limit office-based
physician employment levels.\3

Germany's 1993 health care reform law requires the federal
associations of sickness funds and sickness fund physicians to
restrict physician employment by limiting the number of physicians
that can practice within a designated geographic area.  In 1993 the
sickness funds and the Federal Association of Sickness Fund
Physicians negotiated physician-to-population ratios for 12
specialties on the basis of the present distribution of specialties
across Germany's planning zones.\4 Because the ratios derive from a
standard that is static--existing supply--rather than dynamic--the
zone population's health care needs--the physicians acknowledge that
the ratios could be too rigid for adequate health care planning.  The
associations have until 1999 to finalize these ratios. 

The regional sickness fund physician associations monitor their
respective region's physician supply and are responsible for closing
the region to new physicians once a planning zone exceeds its ceiling
by 10 percent.  The strict enforcement of physician- to-population
ratios could mean that, in regions with an excess physician supply,
new openings for physicians could occur only as a result of
population growth or as physicians leave practice.\5 As of August
1993, most large cities such as Hamburg and Munich were closed to all
new physicians.  Depending on the specialty, between 49 and 72
percent of all the planning regions were closed to new physicians. 

The limits on employment choices of newly licensed physicians are
expected to be challenged in court.  The Marburger Bund, a labor
union that represents hospital staff and postgraduate residents,
contends that the law is unconstitutional since it restricts the
freedom of physicians to practice medicine where they choose.  In
addition, health care officials interviewed said that limiting
employment is not as effective a supply control as limiting numbers
of medical students\6 because the current approach could result in
the government's educating students in medicine and then denying them
the opportunity to practice medicine in Germany. 


--------------------
\2 Sickness funds are Germany's quasi-public health insurers. 

\3 The physician distribution plan applies only to office-based
physicians who treat sickness fund patients, or about 40 percent of
Germany's total physicians.  It does not apply to physicians treating
private patients (those not insured by sickness funds),
hospital-based physicians, or to physicians in other areas such as
public health. 

\4 Germany is divided into 565 planning zones.  Each zone is
designated according to 1 of 10 population density categories.  Each
specialty has its own physician-to-population ratio for each
population density category.  The Federal Association of Sickness
Fund Physicians has proposed basing the ratios on physician supply as
of December 31, 1990. 

\5 Attrition could be accelerated by the new requirement of mandatory
retirement of physicians by age 68. 

\6 Government regulation of medical school enrollment has been
declared unconstitutional. 


   STRATEGIES TO MANAGE GERMANY'S
   PHYSICIAN MIX
-------------------------------------------------------- Appendix II:2

Until recently, only Germany's general practitioners were considered
primary care physicians.  All other physicians, including
pediatricians and internists, were considered specialists.  Of the
total number of Germany's physicians, about 40 percent are primary
care and specialist physicians that practice in office settings.  The
rest are specialists that largely practice in hospitals.  Unlike
physician practices in the United States, office-based physicians
generally do not treat patients in the hospital, and few
hospital-based physicians see patients outside the hospital.\7

Among office-based physicians, the ratio of primary care physicians
to specialists has declined over the past 30 years.  Some health care
experts believe that the growing number of specialist physicians has
contributed to an increase in costs, because specialists rely more on
costly diagnostic and treatment procedures than primary care
physicians do.  In addition, the oversupply of specialists has
resulted in specialists providing primary care. 

Germany's 1993 health reform legislation calls for attaining, for
office-based physicians, what physician association officials
interpret as a goal of 60 percent primary care physicians.  This
goal--with the implicit goal of 40 percent specialists--was based on
historical guidelines widely accepted among health care experts
rather than on a scientific formula.\8 Since this goal applies to
only office-based physicians, this strategy could result in primary
care physicians comprising 24 percent of all physicians. 

To help achieve physician mix goals, the 1993 health reform
legislation requires the sickness funds and member physicians to
develop a new reimbursement schedule for office-based physicians. 
The proposed fee schedule would decrease fees for technical services
provided by specialist physicians.  It would also recognize the time
that primary care physicians spend consulting with patients. 
Currently, physicians have a set office visit fee that does not
account for the time actually spent. 

According to German officials, the income differential between
office-based primary care and specialist physicians, which averages
42 percent, has contributed to the higher number of specialists in
Germany.  The income differential is attributed to higher
reimbursements for technical services compared with office visit
services.  Specialist physicians tend to use more diagnostic tests
than primary care physicians do and thus benefit more financially
from the current reimbursement system.  German government officials
told us that this potential for greater income discourages physicians
from practicing as primary care physicians.  The proposed fee
revisions are intended to stabilize the incomes of primary care
physicians while reducing the incomes of specialists.  Another
proposed fee schedule change would also stipulate that only
physicians designated as primary care physicians would receive
reimbursements for certain primary care procedures. 

As an additional emphasis on primary care, the reform legislation
calls for expanding the definition of primary care physician to
include general internists and general pediatricians.  By the end of
1995, these physicians must choose whether they want to be classed as
primary care physicians or remain specialists.  Health care officials
estimate that most general internists and general pediatricians will
want to be reclassified as primary care physicians.  Assuming that
most general internists and pediatricians choose to be included as
primary care physicians, about 52 percent of Germany's office-based
physicians could be classed as primary care physicians under the new
definition.  (See table II.1.)



                          Table II.1
           
              Estimated Physician Mix Using New
                   Primary Care Designation

                     (Numbers in percent)

                                 Hospital-and   Office-based
                                 office-based     physicians
Physician type                     physicians           only
------------------------------  -------------  -------------
Primary care physicians
------------------------------------------------------------
General practitioners                      15             37
General internists                          4             11
General pediatricians                       2              4
All other specialists                      79             48
============================================================
Total                                     100            100
------------------------------------------------------------
Note:  Estimates were calculated based on 1991 data. 

Source:  Kassenï¿½rztliche Vereinigung Hessen. 

Some health care observers consider the emphasis on encouraging the
growth of primary care physician numbers a step toward preparing the
German delivery system for managed care; that is, sickness funds may
eventually require member patients to obtain referrals from primary
care physicians for specialized care.  Currently patients have
unrestricted access to primary care physicians and specialists that
practice in office settings.  Referrals are required to see
hospital-based specialists.  The sickness funds that can reduce
expenditures by using a referral system may be able to attract or
retain members through lower contribution rates.\9 Instituting
managed care, however, is likely to meet with strong resistance from
people accustomed to choosing their own physicians and having ready
access to most specialists. 


--------------------
\7 The exceptions include primarily heads of departments, who are
allowed to have private practices in the hospital. 

\8 Although Germany's health care reform law does not specifically
require an increase in the number of primary care physicians, the
physician associations told us the intent of the law is to increase
the ratio of primary care physicians to specialists. 

\9 Instead of insurance premiums, Germans typically pay the sickness
funds a percentage of their wages for health insurance. 


MANAGING PHYSICIAN RESOURCES IN
SWEDEN
========================================================= Appendix III

Sweden's key strategies for managing physician resources involve
long-standing policies aimed at controlling physician supply and
recent efforts to emphasize primary care.  To control the total
number of physicians, the government restricts medical school
enrollment.  To enhance the role and ultimately the supply of primary
care physicians, 1993 health reform legislation in general provides
for (1) centralizing the primary care physician's role in the
delivery of health services and (2) providing greater autonomy to
currently salaried primary care practitioners.  Sweden also has
efforts under way to attract primary care physicians to remote rural
areas. 


   STRATEGY TO CONTROL SWEDEN'S
   OVERALL PHYSICIAN SUPPLY
------------------------------------------------------- Appendix III:1

Historically, the government has managed Sweden's aggregate physician
supply by controlling medical school enrollment.  Each year the
Parliament determines the number of entry slots on the basis of
medical school capacity and estimated future physician supply needs. 
The Ministry of Education in consultation with medical educators
allocates the slots among the medical schools.  Health care officials
use approximately 13-year time frames--the time needed to train a
physician--for projecting future physician supply needs.  Officials
told us that predictions of needs for the long term are difficult to
make accurately, but they believe their process is an effective
mechanism for managing physician supply. 


   STRATEGIES TO INCREASE THE
   NUMBER OF PRIMARY CARE
   PHYSICIANS
------------------------------------------------------- Appendix III:2

In Sweden, primary care and specialist physicians are salaried
government employees.  Only general or family practitioners are
considered to be primary care physicians.  All others--including
pediatricians and internists--are considered specialists. 

Of the total number of Sweden's physicians, about 18 percent are
primary care physicians who work in clinic-like primary care centers. 
The rest are specialists, who work primarily in hospitals.  Unlike
typical physician practices in the United States, physicians
practicing in primary care centers do not treat patients in the
hospital, and specialists generally do not see patients outside the
hospital. 

Over the past 40 years, the government encouraged the delivery of
care in hospital settings in several ways.  It invested heavily in
building and improving hospital facilities and kept the hospitals
fully staffed.  Until January 1992, it also allocated physician
training slots throughout the country to control physician specialty
mix.  The combination of these efforts created more job opportunities
for specialists than for primary care physicians. 

Primary care physicians have had limited autonomy practicing in
health centers.  In many cases, for example, nurses schedule the
physicians' time and physicians have little say about the length of
patient visits.  Health care officials estimate that about half of
the physicians who initially train in primary care retrain to become
specialists because of their dissatisfaction with the level of
control they exert over their practice environment. 

Past government efforts to boost the practice of specialty medicine
as well as dissatisfaction among primary care physicians has led to a
relatively low ratio of primary care to specialist physicians, as
shown in table III.1. 



                         Table III.1
           
            Number of Primary Care and Specialist
                    Physicians as of 1991

Physician type                    Number           Percent\a
--------------------  ------------------  ------------------
Primary care                       3,909                  18
 physicians (family
 and general
 practitioners)
General internists                 2,629                  12
General                            1,234                   6
 pediatricians
All other                         14,234                  65
 specialists
Total physicians                  22,006                 100
------------------------------------------------------------
Note:  These figures do not include physicians in training. 

\a Numbers do not add to 100 percent because of rounding. 

Source:  National Board of Health and Welfare. 

Rising health care costs, patients' lack of choice of physician, and
low productivity among health care staff were some of the factors
that prompted Sweden's significant health care reforms.\1 In May
1993, the Swedish Parliament introduced a Family Doctor System
designed to contain costs by expanding the role of primary care
physicians.  The reform legislation calls for attaining 1 primary
care physician per 2,000 inhabitants, compared with the current 1 per
3,400 inhabitants. 

Swedish health care officials developed this goal by examining the
appropriateness of their current primary care physician-to-inhabitant
ratio and also by examining other countries' ratios.  Sweden plans to
increase the number of primary care physicians through a combination
of strategies aimed at (1) inducing the demand for primary care
through financial incentives to patients and (2) providing primary
care physicians greater professional autonomy. 

To induce the demand for primary care, the new legislation requires
all citizens to register with a primary care physician of their
choice.  It also creates a financial incentive for patients to
consult with primary care physicians before seeking specialist care;
without a referral, patients' out-of-pocket costs will be greater
than when referred by a primary care physician.\2 Sweden expects that
these incentives will create more job opportunities for primary care
physicians. 

To enhance the primary care physician's professional autonomy, the
legislation directs regional governments to implement market-oriented
reforms designed to give primary care physicians greater independence
in determining how to deliver services.  Specifically, these reforms
call for primary care physicians, who are currently salaried county
council employees, to become individual contractors.  The legislation
proposes using capitation to pay about 70 percent of the
physician-contractor's income, fee-for-service to pay 20 percent, and
patients' out-of-pocket charges to pay the rest.\3 Physicians would
be allowed to organize their practices to reduce the bureaucracy
found in some primary care centers. 

Despite the financial risk that physicians will incur under the new
reimbursement arrangement, the government anticipates that the
changes will enhance the primary care career and result in a
concomitant increase in the number of primary care physicians.  One
regional government has already begun a program to retrain
specialists who want to become primary care physicians.  The
retraining is expected to take 3 to 4 years, after which physicians
will be certified by the National Board of Health and Welfare as
qualified to practice primary care. 

Recent concerns about funding constraints are motivating regional
government officials to consider a more regulatory measure--limiting
the number of specialist training positions--to increase the number
of primary care physician trainees.  Some health care officials
believe that regional governments will move forward with this action
if the recent incentive-based strategies are not successful in
expanding the primary care physicians ranks. 


--------------------
\1 While health care spending in Sweden--as a percentage of gross
domestic product--declined during the 1980s, health care spending in
absolute terms has increased. 

\2 Until the enactment of this legislation, patients were free to
seek specialist care without a referral. 

\3 Capitation is a fixed annual fee paid to the physician for each
person who has signed on with the physician.  The capitation payment
is intended to cover all general diagnosis and treatment associated
with primary care.  Fee-for-service reimbursement covers procedures
which are so time consuming and costly that the capitation payment
does not cover their cost. 


   STRATEGIES TO ADDRESS PHYSICIAN
   SUPPLY PROBLEMS IN UNDERSERVED
   AREAS
------------------------------------------------------- Appendix III:3

As in other industrialized countries, physicians do not want to work
in remote locations because of limited teaching and research
opportunities, fewer opportunities for continuing education and
consulting with colleagues, and a lack of employment opportunities
for spouses.  For many, such posts mean isolation from family and
friends.  Strategies to increase physician supply in Sweden's remote
rural areas of the north have included medical school training in
rural areas, financial incentives, and central government control of
physician distribution.  Of these, health officials believe that
medical school training was the most significant in helping to lower
the percentage of rural primary care vacancies from 16 percent in
1985 to 12 percent in 1991.  Officials also reported the need to
continually monitor rural area residents' access to primary care. 

In the 1960s, Sweden built a medical school in the north so that
students, especially those from the rural northern areas, could be
exposed to the practice of medicine in rural settings.  Although no
data were available for our review, medical school officials believe
the targeted enrollment and rural training efforts have succeeded in
increasing the number of primary care physicians in rural areas. 

The northern county councils have used economic incentives such as
higher salaries and repayment of educational loans to attract
physicians to rural areas.  According to Swedish health care
officials, these incentives have had only a limited effect in
attracting primary care physicians to rural areas.  Very high
marginal tax rates diminish the financial benefit of higher physician
salaries. 

The government's attempt to control distribution centrally was not
effective in supplying underserved areas, largely because the policy
could not be enforced in practice.  From the early 1970s until 1992,
the government allocated physician training positions throughout the
country.  Regional officials, however, controlled hiring authority
and the payment of trainee salaries.  Thus, when urban health
authorities were dissatisfied with the number of trainees allocated
to their areas, they ignored the quotas and hired more trainees than
specified in the central government allotment.  Because there was a
fixed number of physician trainees available, and rural areas could
not successfully compete with the urban areas, the rural areas could
not fill their trainee allotment.  By 1992, the government
discontinued its central distribution policy and shifted resource
planning to the regional level. 


MANAGING PHYSICIAN RESOURCES IN
THE UNITED KINGDOM
========================================================== Appendix IV

The United Kingdom manages its physician resources through the
medical education system and policies of the government's National
Health Service (NHS).  NHS provides health care to virtually all of
the population.  It owns and operates hospitals and contracts with
physicians for ambulatory services.\1 Limits on medical school
enrollment control the total supply of physicians.  NHS policies
encourage the use of primary care services and limit specialist
employment, thereby affecting specialty mix.  NHS also controls
employment opportunities and uses financial incentives to influence
primary care physicians' distribution. 


--------------------
\1 Primary care physicians are paid a combination of capitation and
fee-for-service payments.  As of 1991, about 54 percent of a primary
care physician's income came from capitation payments and 46 percent
from fee-for-service and bonus payments. 


   MANAGEMENT OF U.K.  PHYSICIAN
   SUPPLY
-------------------------------------------------------- Appendix IV:1

A government-sponsored physician manpower committee recently
projected a shortage of physicians in the United Kingdom over the
next 10 to 20 years and recommended increasing medical school
enrollment by about 6 percent to counteract the shortage.  In 1990,
the United Kingdom had roughly 140 physicians per 100,000
inhabitants, compared with 230 per 100,000 inhabitants in the United
States. 

Historically, the United Kingdom has managed its aggregate physician
supply by controlling medical school enrollment.  The Departments of
Health and Education establish an annual ceiling for total medical
school enrollment on the basis of medical school capacity and
projections of physician supply needs.  The Departments of Education
and Science allocate slots among the medical schools.  On the whole,
government officials believe this process is a somewhat effective
mechanism for managing physician supply, despite the difficulty of
making long-term estimates (based on a minimum 9-year physician
training period) of future physician supply needs. 


   MANAGEMENT OF PRIMARY CARE
   DEMAND
-------------------------------------------------------- Appendix IV:2

In the United Kingdom, only general practitioners are considered
primary care physicians.  All others, including pediatricians and
internists, are considered specialists.  In 1990, the United Kingdom
had about 57,000 physicians,\2 of which about 58 percent were primary
care physicians.  Primary care physicians work in office settings and
are private contractors with NHS.  Specialists work in hospitals and
are salaried employees of NHS. 

Health experts we interviewed said that primary care physicians
historically have had a central role in the U.K.  health care system
because they are the first points of contact for patients.  Citizens
must register with a primary care physician and patients must obtain
this physician's referral to seek specialist care.  Health care
officials also told us that the referral function, which limits
direct access to specialists, is a key to controlling health care
costs because primary care physicians use fewer expensive diagnostic
tests than specialists do. 

In addition, recent legislation has strengthened primary care
physicians' influence over the provision of specialist care.  As of
April 1991, primary care physicians in a group practice with at least
7,000 patients can choose to become what is referred to as a
fundholding practice.  These practices receive annual budgets from
NHS to purchase outpatient hospital services\3 such as elective
surgery and diagnostic tests.  The purchasing power of the
fundholding practices has the effect of making hospital specialists
more responsive to primary care physicians and their patients' needs
because the hospitals are now dependent on the fundholding practices
for a portion of their income.  In addition, the fundholding
practices have an incentive to purchase services with the best value
because they can reinvest any funds remaining at the end of the year
back into the practice.  The fundholding practice can use the excess
funds to hire additional staff but may not keep the funds as net
income. 


--------------------
\2 This figure does not include physicians in training. 

\3 Funds are also used to purchase community health care services and
pharmaceuticals and to hire nonphysician staff.  Primary care
practices that are not fundholding practices continue to refer
patients to hospital specialists, but the hospital does not receive
funding from the primary care practice.  As of March 1993, about 25
percent of all patients were cared for by a fundholding practice. 


   MANAGEMENT OF PHYSICIAN MIX
-------------------------------------------------------- Appendix IV:3

The government does not attempt to achieve a specific ratio between
specialist and primary care physicians.  (Table IV.1 shows the
proportion of physician types.) Instead it emphasizes the sufficiency
of physician supply on the basis of population needs.  The government
is satisfied with the current supply of primary care physicians,
whereas physician organizations, such as the Conference of Medical
Royal Colleges, contend that the number of specialist positions
should be increased by up to 60 percent. 



                          Table IV.1
           
            Number of Primary Care and Specialist
            Physicians in the United Kingdom as of
                             1990

Physician type                              Number   Percent
------------------------------  ------------------  --------
Primary care physicians                     32,970        58
 (general practitioners)
General internists                           6,900        12
General pediatricians                          848         2
All other specialists                       16,205        28
============================================================
Total physicians                            56,923       100
------------------------------------------------------------
Note:  These figures do not include physicians in training. 

Source:  Medical Manpower Standing Advisory Committee. 

The government has not intentionally kept the proportion of U.K. 
specialists low.  Rather, the ratio of primary care to specialist
physicians is in large measure the result of government funding
constraints, which limit the ability of hospitals to hire certified
specialists.  Hospitals determine the number of specialist positions
they can sustain on the basis of NHS funding of their total budgets. 
According to various physician organizations, this funding is
insufficient to hire all the specialists needed to meet the
population's health care needs. 

The question of specialist supply is less straightforward than the
absolute numbers or ratios suggest.  As noted in the table, the
specialist physician numbers do not include specialist trainees.  The
omission is significant because specialist trainees, like resident
physicians in the United States, work in hospitals.  Unlike the U.S. 
system, however, postgraduate specialist trainees can work only in
hospitals, and residents do not lose their trainee status until
appointed to a certified specialist post.  With limited certified
specialist positions available, a trainee can spend roughly 7 years
in postgraduate training and continue to wait an average of 5 years
for an appointment to a certified specialist post.  During this time,
trainees work in hospitals performing duties similar to those of
specialists but are classified and paid as trainees.  Table IV.2
shows that the proportion of specialists would increase to 47 percent
of all physicians if senior residents (called "senior registrars")
were counted in the specialist ranks. 



                          Table IV.2
           
            Estimated Proportions of Primary Care
           and Specialist Physicians in the United
           Kingdom When Including Senior Residents
                          as of 1990

Physician type                              Number   Percent
------------------------------  ------------------  --------
Primary care physicians                     32,970        53
Senior residents in specialty                5,058         8
 training
Specialist physicians                       23,953        39
============================================================
Total physicians                            61,981       100
------------------------------------------------------------
Source:  Medical Manpower Standing Advisory Committee. 


   MANAGEMENT OF PHYSICIAN SUPPLY
   IN MEDICALLY UNDERSERVED AREAS
-------------------------------------------------------- Appendix IV:4

Since 1948, the government has strived to minimize the extent of
underserved areas by requiring primary care physicians to obtain
approval before setting up practice in a particular area.  In
addition, primary care physicians receive financial incentives to
practice in areas designated as medically underserved.  According to
health care experts, primary care physicians are generally well
distributed across the United Kingdom. 

Primary care physicians serving NHS patients must apply to the
government's Medical Practices Committee before establishing a
practice or joining an existing group practice.\4 The Committee bases
its decisions on a variety of factors such as existing
physician-to-patient ratios,\5 population demographics, and primary
care physician practice demographics.  In most cases, the Committee
readily approves a primary care physician's request to practice in
areas designated as underserved,\6 but in other areas physicians must
clearly demonstrate the area's need. 

In 1948 when the Committee was established, more than 50 percent of
the population of England and Wales lived in underserved areas, with
one primary care physician for every 3,500 patients.  Since then, the
number of underserved areas has declined significantly as a result of
the Committee's distribution policy.  As of September 1992, less than
4 percent of the areas in England and Wales were designated as
underserved. 

According to NHS officials, NHS does not have difficulty attracting
physicians to rural areas, in part because some physicians consider
the rural areas as attractive locations to live and work and also
because NHS offers them financial incentives.  For example, NHS
guarantees primary care physicians who locate in rural areas an
income of at least 80 percent of the average net income for primary
care physicians.  This salary is paid to physicians practicing in
areas where, under the normal remuneration arrangements, the net
income of the practice would be insufficient to attract or retain a
primary care physician.  Also, NHS compensates primary care
physicians for the increased time spent traveling when caring for
patients in sparsely populated areas.  NHS also compensates primary
care physicians who practice in urban areas designated as socially
deprived for the extra workload generated by patients living in these
areas.\7


--------------------
\4 The Medical Practices Committee has jurisdiction over England and
Wales.  There is a separate Medical Practices Committee for Scotland. 

\5 Physician-to-patient ratio is defined as the average number of
registered patients per primary care physician.  Because NHS serves
virtually the entire population, physician-to-patient ratios are
similar to physician-to-population ratios. 

\6 The Medical Practices Committee classifies practice areas into
four categories:  designated, with average list sizes exceeding 2,500
patients per physician; open, with average list sizes between 2,101
and 2,500 patients; intermediate, with average list sizes between
1,701 and 2,100 patients; and restricted, with average list sizes
less than 1,700 patients per physician.  The Committee considers
designated and open areas as medically underserved. 

\7 NHS characterizes deprivation by seven factors:  unemployment,
number of elderly living alone, overcrowding, children under age 5,
single-parent households, ethnic minorities, and extent of transient
populations. 


MEDICAL EDUCATION SYSTEMS OF
CANADA, GERMANY, SWEDEN, THE
UNITED KINGDOM, AND THE UNITED
STATES
=========================================================== Appendix V


   UNDERGRADUATE MEDICAL EDUCATION
   VARIES BUT ALL COUNTRIES EXPOSE
   STUDENTS TO PRIMARY CARE
--------------------------------------------------------- Appendix V:1

Undergraduate medical education in Canada is similar to that of the
United States, while the systems in Germany, Sweden, and the United
Kingdom have some commonalities.  Most Canadian and U.S.  schools
require students to complete undergraduate university studies before
entering; thus, the average medical student is 21 years old when
studies are begun.  In both countries, medical schools offer 4 years
of academic study leading to the M.D.  degree.  Germany, Sweden, and
the United Kingdom combine some university studies with medical
education.  Thus, students typically start at 18 or 20 years of age
and remain in medical school 1 to 2 years longer. 

In all four study countries, undergraduate medical education consists
of training in both preclinical (basic sciences) and clinical
sciences.  Except for Sweden, preclinical training takes 2 years. 
Swedish students receive an additional 6 months of preclinical
studies. 

Departments of family medicine are found in all medical schools in
Canada and Sweden.  Departments of general practice are found in the
United Kingdom.  These departments serve as the focal point of
general primary care training.  In Germany, general medicine
departments are found in only 3 of 26 medical schools.  In some U.S. 
medical schools, family medicine departments provide primary care
training.  In addition, primary care training is also offered in the
departments of internal medicine and pediatrics in U.S.  medical
schools. 

Undergraduate medical school tuition is paid with public funds in all
four countries visited.  Consequently, students in these countries do
not accrue levels of education-related debt as high as those of U.S. 
students.  The average medical school debt at graduation is close to
$56,000 for U.S.  students.  Levels of debt in the other countries
range from a low of about $3,100 in the United Kingdom to about
$16,100 in Canada.  Table V.1 provides selected characteristics of
undergraduate medical education in each country. 



                                    Table V.1
                     
                           Selected Characteristics of
                      Undergraduate Medical Education in the
                     United States, Canada, Germany, Sweden,
                              and the United Kingdom

Characteri  United                                                  United
stic        States        Canada        Germany       Sweden        Kingdom
----------  ------------  ------------  ------------  ------------  ------------
Number of   126\a         16            26            6             28
medical
schools

Total       17,000        7,000         12,000        850           4,000
number of
students
enrolled
yearly

Required    Yes           Yes           No            No            No
undergradu
ate
university
degree

Average     4             4             6             5-1/2         5
years of
medical
school
education

Primary     Family        Family        General       Family        General
care        Medicine      Medicine      Medicine      Medicine      Practice
department

Payment     Private/      Public        Public        Public        Public
source of   public
medical
school
tuition
--------------------------------------------------------------------------------
\a Data do not include osteopathic schools of medicine. 


   THREE COUNTRIES REQUIRE
   PRACTICAL TRAINING BEFORE
   BEGINNING POSTGRADUATE STUDIES
--------------------------------------------------------- Appendix V:2

Prior to beginning postgraduate studies,\1 Germany, Sweden, and the
United Kingdom require medical school graduates to complete 12 to 21
months of "practical" training or practice as a physician.  Canadian
and U.S.  students do not have such a requirement. 

Practical training experiences can take place in a hospital or
nonhospital setting.  In Germany, most students train in the hospital
since opportunities in nonhospital settings are limited.  Students in
Sweden are required to spend at least one-third of their practical
training in a primary care center while the hospital is the sole
training site in the United Kingdom.  After completing practical
training and taking an exam, physicians receive a medical license
except in the United Kingdom, where students are not required to pass
a licensing exam. 


--------------------
\1 In the United States, postgraduate training is referred to as
residency training. 


   POSTGRADUATE MEDICAL EDUCATION
   DIFFERS AMONG THE FOUR
   COUNTRIES
--------------------------------------------------------- Appendix V:3

With the exception of Canada, postgraduate training programs in the
countries we visited differ from those in the United States in their
structure.  Table V.2 summarizes these differences. 

Training programs in Canada closely resemble those in the United
States.  In both countries, training requirements are set by program
accreditation bodies.  Programs are responsible for providing
residents with the necessary training experiences--known as
rotations--to fulfill these requirements.  These experiences are
usually associated with a specific hospital. 

In Germany, the German Medical Association sets out the training
requirements for each specialty discipline but does not provide
structured programs to meet the needed training experiences. 
Instead, residents are responsible for applying to hospital
departments that offer the rotations required in their discipline. 
Often, residents must seek rotations in more than one hospital, and
frequently they encounter difficulties in sequencing their training
experiences.  Postgraduate trainers issue residents a certificate
once a rotation is completed.  Certificates from required rotations
must be submitted as part of the specialty certification process. 



                                    Table V.2
                     
                     Selected Characteristics of Postgraduate
                     Medical Education in the United States,
                     Canada, Germany, Sweden, and the United
                                     Kingdom

Characteri  United                                                  United
stic        States        Canada        Germany       Sweden        Kingdom
----------  ------------  ------------  ------------  ------------  ------------
Required    None          None          18 months     21 months     12 months
practical
training

Formal      Yes           Yes           No            Yes           No
residency
program

Years of    3-4           2             3             5-1/2         3
primary
care
postgradua
te studies

Months of   4             9             6             30            12
postgradua
te
training
spent in a
nonhospita
l setting

Years of    4-7           4-7           4-6           5-1/2         7
specialty
postgradua
te studies

Financing   Public and    Provincial    Hospitals,    Regional      National
of          private       governments   physician     governments   Health
postgradua  insurance,                  organization                Service
te          and other                   s
training    public
            support
--------------------------------------------------------------------------------
Postgraduate training in Sweden resembles an apprenticeship.  In
January 1992, the National Board of Health and Welfare changed
training from a rigid predetermined schedule of rotations to a more
goal-oriented program.  Residents are now paired with a mentor in the
specialty of interest.  The mentor develops an individualized
training program and assists the resident in gaining the skills and
experiences necessary to practice in the specialty.  The mentor also
decides when the resident is ready to take the exam necessary for
certification. 

Postgraduate training in the United Kingdom is a two-step process. 
All residents begin with general professional training in a hospital,
lasting 3 years for specialist trainees and 2 years for general
practice trainees.  Following general professional training,
specialist trainees must pass an exam to proceed to hospital
specialty training, which lasts about 4 years.  Approximately 70
percent fail this exam.  General practice trainees complete their
training with 1 year in an office-based practice under the
supervision of a general practitioner.  Like the German postgraduate
training system, the United Kingdom does not have structured programs
that coordinate or provide residents with required rotations or
training experiences.  Rather, residents must apply for each required
hospital rotation.  Residents studying general practice have the
option of having an advisor arrange their postgraduate training. 
About 60 percent of the students have such an advisor. 


   LENGTH OF PRIMARY CARE PROGRAM
   AND TRAINING OUTSIDE THE
   HOSPITAL VARIES AMONG COUNTRIES
--------------------------------------------------------- Appendix V:4

The length of primary care training across the countries ranges from
2 to 5-1/2 years.  All four countries reviewed, as well as the United
States, require residents to spend a portion of this time training in
nonhospital-based settings; however, the duration of training varies
from country to country. 

Family medicine training in Canada, for example, takes 2 years.  Nine
months of this period must be completed in a nonhospital setting.  In
the United States, family medicine--which most resembles Canadian
family medicine--involves 3 to 4 years of training.  U.S.  programs
differ in the amount of time required to train in nonhospital
settings. 

General medicine training in Germany takes 3 years to complete.  Six
months of this period are spent in a nonhospital-based setting.  In
Sweden, general medicine residents are required to train for 5-1/2
years.  Thirty months of this time are spent in a nonhospital-based
setting.  Like Germany, general practice training in the United
Kingdom takes 3 years to complete.  Residents spend 2 of these years
in a hospital post.  The remaining year must be spent outside the
hospital in a general practice. 


   LENGTH OF SPECIALTY TRAINING
   SIMILAR IN COUNTRIES VISITED
--------------------------------------------------------- Appendix V:5

In all the countries visited, the duration of specialty training
varies according to the specialty area.  On average, however,
countries report that specialty training ranges from 4 to 7 years. 
In Sweden, specialty training is generally completed in 5-1/2 years. 

In the United Kingdom, students generally finish specialty training
within 7 years.  The first 3 years are spent training in hospital
posts.  During this time the trainees must pass an exam to become
members of the physician organization for their desired specialty. 
Successful completion of this exam entitles them to continue their
training, which consists of approximately 4 more years training in
hospital posts.  However, even after completing their required
training, residents must remain as trainees until a hospital
specialist post is obtained.  Since hospital specialist posts are
limited throughout the National Health Service, residents must often
continue as trainees an average 5 years beyond their 7 years of
specialty training. 


   PUBLIC FUNDS SUPPORT
   POSTGRADUATE TRAINING IN THREE
   COUNTRIES
--------------------------------------------------------- Appendix V:6

Postgraduate training in Canada, Sweden, and the United Kingdom is
supported by public funds.  Canadian provincial governments, Swedish
regional governments, and the National Health Service in the United
Kingdom provide the financing for all postgraduate training. 
Financing of postgraduate training in Germany differs by training
site.  Hospitals pay for practical training and specialty training
that take place in the hospital setting.  General medicine residents
trained outside the hospital are paid primarily by the physicians who
train them.  These physicians must cover their training costs with
patient service revenues received from the sickness funds.  About
half of the state-level sickness fund physicians associations provide
partial funding for residents' salaries.  For example, one program we
reviewed paid two-thirds of the resident's salary and the physician
paid the remaining one-third. 

In the United States, postgraduate medical education is funded
primarily through revenues generated by hospital patient care
services.  Private payers contribute to the financing of training
through the payment of higher hospital charges.  While not explicitly
stated, these charges are adjusted, in most cases, to include costs
related to training.  In addition, the federal government currently
compensates teaching hospitals for about 30 percent of postgraduate
training direct costs. 


OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================== Appendix VI

Concerned about the ratio of primary care to specialist physicians in
the United States, the Chairman of the House Committee on Government
Operations asked us to examine the methods other countries use to
manage their physician supply and specialty distribution.  Where
applicable, the Chairman also asked us to identify strategies these
countries use to encourage primary care physicians to practice in
medically underserved areas. 

Specifically, we sought to determine how countries

  manage total physician supply,

  manage the ratio of primary care to specialist physicians, and

  encourage physicians to locate in underserved areas. 

Our review covered Canada, Germany, Sweden, and the United Kingdom. 
We selected these countries because they are similarly industrialized
nations and all have instituted universal care coverage, yet they
spend a lower percentage of their gross domestic product on health
care than the United States does.  In addition, we focused our
analysis on countries with a mixture of strategies to control access
to specialized care.  Two of the countries have systems that rely on
primary care physicians to manage care and refer patients to a
specialist when necessary, while the remaining countries allow
self-referral to physicians.  In addition, three of these countries
have medically underserved areas. 

In each country, we interviewed health care officials at various
government levels, representatives of medical associations, medical
school and graduate medical school administrators, faculty, students,
individual physicians, and various health care experts.  In addition,
we reviewed available literature on the characteristics of the health
care system in each country.  Descriptions of legislation and
judicial determinations are based solely on personal interviews and
reviews of available documents; we did not independently verify their
accuracy. 

We analyzed physician workforce data, but due to variations among the
countries regarding the methods used to collect physician data, exact
comparisons among the countries are imprecise.  We conducted our
review from November 1992 through December 1993 in accordance with
generally accepted government auditing standards. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix VII

Rose Marie Martinez, Assistant Director, (202) 512-7103
Patrick Gallagher, Evaluator-in-Charge, (312) 220-7600
Patricia Barry
Carolyn Cocotas
Robert Ferschl
Mary Freeman
