Numb and Number: Once a Hot Specialty, Anesthesiology Cools As Insurers Scale Back
Mar. 17, 1995
Patrick Kwan has as bright a resume as a young doctor could want, including four years of advanced training in anesthesiology. So when he entered the job market last spring, he expected to be showered with lucrative offers. What happened instead was a painful experience.
After six months of looking, Dr. Kwan got just one full-time offer, to join a group practice at $120,000 a year. He turned it down because the pay was less than half what other partners were making and because the job didn't make use of his subspecialty: anesthesia for cardiac surgery. He thought something better would come along. It hasn't.
Today, the 33-year-old Dr. Kwan is a migrant medical worker, driving his 1989 Mazda across Northern California so he can perform brief, fill-in stints in anesthesia at 10 different hospitals. On Christmas Day, he put in 12 hours at a big Berkeley hospital. At other times, he has spent nights or weekends at rural hospitals. ``I can't afford to be choosy,'' he says. ``I'll take whatever is available.''
Market realities are finally starting to hit the health-care profession. Competition is restraining the rapid escalation of medical costs, a trend that economists generally applaud. This new austerity comes with a price, however: a slowdown in the once-booming medical labor market.
For most of the past decade, health care has provided some of the most bountiful, diverse job prospects in the entire economy. People with a high-school education or less have found thousands of clerical and maintenance jobs at hospitals. Those with more training have found jobs commanding $40,000 to $80,000 a year in such fields as nursing and pharmaceutical sales. Young doctors who picked the right specialties have been bombarded with chances to earn $200,000 or more.
Now, though, the job picture is dimming. Health-maintenance organizations and other cost-minded insurers are pressing doctors and hospitals to be more efficient. Medical prices for the past 12 months climbed just 4.9 percent, one of the lowest rates in 20 years. As medical providers scramble to cut costs and skip services they judge unnecessary, they are loath to add to their payrolls.
Labor Department data show the health sector created 388,000 jobs in the peak year of 1990, one-quarter of the U.S. economy's total growth in nonfarm employment. Last year, new health jobs totaled just 254,000, accounting for less than 10 percent of all new jobs.
Community hospitals provided a steady source of new jobs in the early 1990s, says Mark Pauly, a professor of health-care systems at the University of Pennsylvania's Wharton School. But ``now patients aren't showing up to be admitted as often, and when they do come, they don't stay as long. Hospital employment in many places is dropping.''
Bleak job prospects aren't gripping all areas of health care. Many treatments are being switched to cheaper settings, such as home care, where jobs are plentiful. And some regions, such as the Midwest and South, appear to be doing better than either the East or West coasts.
Nonetheless, major parts of the health-care work force are shrinking. Some 83,000 jobs for orderlies and nurses' aides disappeared last year. Jobs for physical therapists dropped 7.8 percent.
In the pharmaceutical industry, total U.S. employment fell 3.1 percent in the first six months of 1994, with nearly half of that decline in marketing. Bigger cuts are likely this year, because of consolidations brought on by drug-company mergers, says a spokesman for the Pharmaceutical Research & Manufacturers' Association.
Even in nursing _ a field that has long faced a worker shortage _ the outlook is changing. Most of the growth in nursing jobs last year was in outpatient care, which is more likely to offer part-time work and lower pay. Nursing schools say graduates are having a tougher time finding work in desired locations. ``Getting a job depends on how willing people are to move to another area,'' says Janet Rogers, dean of the University of San Diego's school of nursing.
Some experts think more retrenchment is imminent. The New York consulting firm APM Inc. recently analyzed per-member outlays by some of the most aggressive HMOs and managed-care companies, to see what would happen if other health insurers adopted similar budgets.
APM's conclusions: spending cuts of 50 percent or greater could lie ahead for services in several medical fields, including psychiatry, radiology and plastic surgery. ``We're talking about some very big numbers,'' says James Kagan, a managing director at APM. Other consultants say cutbacks will eliminate not just physicians' jobs, but also a wide range of technicians, office managers and aides.
A close look at anesthesiology provides a case study of how job prospects _ even in a high-paying specialty _ can rapidly sour.
For most of the past 15 years, anesthesiology has been a booming field, thanks to growing surgery volumes and insurers' willingness to reimburse most bills in full. The average anesthesiologist earned $131,900 in 1982, according to the American Medical Association. By 1992 that figure had jumped 73 percent, to $228,500.
Teaching hospitals scrambled to train enough young doctors in this popular specialty. Newly minted M.D.'s headed into two-year or three-year residency programs, picking up the skills they needed to become full-time anesthesiologists. By the end of 1993, the U.S. had 29,800 anesthesiologists, nearly double the total in 1980.
``I taught a lot of residents in the 1980s who were smirking at me and my minuscule academic salary,'' recalls Philip Boysen, chairman of the anesthesiology department at the University of North Carolina, Chapel Hill. ``They were very goal-directed, and their goal was to get into private practice and make a lot of money.''