Policy Update: Payment Reform and Florida’s Physician Workforce
By Jarrod Fowler, MHA, FMA Director of Healthcare Policy and Innovation | January 12, 2023

Federal Issues

  1. Addressing physician payment cuts: Last year, Congress allowed a roughly 2% cut to the Medicare Physician Fee Schedule conversion factor to take effect. Without additional congressional action, that cut will rise to about 3.25% next year. Staving off these additional cuts will be a priority for medical associations across the country. Another factor that may affect the status of these cuts is a recent recommendation from MedPAC, which advises Congress on Medicare payment issues, to increase Medicare physician pay by 1.25% next year.

    While even the combined actions of instituting MedPAC’s recommended pay and preventing the additional cuts would not offset the payment cuts physicians have already endured, they would at least mark an improvement over the status quo. There is also a very strong case for rolling back all existing cuts and implementing a net payment increase to the Medicare Physician Fee Schedule conversion factor. Once again, the FMA will be fighting to avert more cuts and to make progress towards broader reforms.

  2. Laying the groundwork for physician payment reform: In what is likely to be a multi-year process, Congress also must come up with a sustainable, long-term solution to Medicare physician reimbursement. Physicians, unlike other Medicare entities, are not provided an annual payment increase tied to rising costs. Tying future Medicare payment updates to rising practice costs, as measured by the Medicare Economic Index (MEI), is one way in which Congress could make the Medicare payment system more sustainable. Both the CMS Office of the Actuary and the Medicare trustees have signaled that is not sustainable to have a system in which physician pay increases perpetually stay below the increasing costs of doing business. Congress should address this matter sooner rather than later.

State Physician Workforce Trends

  1. An aging workforce: According to the latest Florida Department of Health Physician Workforce Annual Report, Florida ranks sixth in the nation in terms of having the highest proportion of active physicians who are ages 60 and older. There are nearly twice as many physicians ages 60 and older than there are physicians under the age of 40 in Florida. Furthermore, Florida has the nation’s eighth lowest proportion of active physicians under 40i. Along with data illustrating the size and scope of the state’s physician shortageii, this highlights the need to continue attracting more physicians to Florida to replace those who will eventually retire.

  2. Growing diversity: The report also illustrates the demographic shifts within Florida’s physician workforce over time. The number of female physicians in Florida has increased 64% over the past decade, and among physicians under age 40, the number of female physicians (4,301) is nearly equal to the number of male physicians (5,085). By comparison, among physicians in the state who are age 60 and older, 15,565 are male and 3,546 are female. Recent trends reported by medical schools suggest that differentials in physician gender will continue to decrease over time.

    Racial and ethnic diversity also continues to increase within the state’s physician workforce. Over the past 10 years, the percentage of minority, actively practicing physicians in Florida has risen from 39.2% of to 45.8%. Additionally, Florida has the nation’s highest percentage of physicians who identify as Hispanic, Latino, or of Spanish origin (15.8%), according to the Association of American Medical Colleges 2021 State Physician Workforce Data Report (published in 2022). Overall, Florida exceeds the national state average percentage of actively practicing ethnic minority physicians, which is 40.9%iii.

i 2022 Florida Department of Health Physician Workforce Annual Report
ii IHS Markit Florida Statewide and Regional Physician Workforce Analysis: 2019-2035
ii 2022 Florida Department of Health Physician Workforce Annual Report