Practice Location Choice by New Physicians: The Importance of Malpractice Premiums, Damage Caps, and Health Professional Shortage Area Designation

Abstract

Objective. To understand the factors affecting the choice of initial practice location by new physicians. Data Sources/Study Setting. A unique survey of exiting medical residents in New York State from 1998 to 2003. Study Design. We estimate conditional logit models to examine the factors affecting the choice of initial practice location by new physicians. Data Collection/Extraction Methods. We identify all physicians completing their training in obstetrics/gynecology or surgery and primary care physicians (PCPs) (general internal medicine, pediatrics, and family medicine) who had accepted a job in patient care and who provided the location (zip code) of their job. This resulted in 3,758 physicians in our sample. Principal Findings. Our results indicate that malpractice insurance premiums are a significant deterrent for surgeons, but they do not appear to deter OB/GYNs or PCPs from locating in particular areas. In addition, caps on malpractice damage awards attract surgeons to areas. Shortage area designations attract PCPs without education debt yet deter PCPs with debt, suggesting that subsidies do not outweigh the perceived costs of locating in underserved areas. Conclusions. In general our results highlight that new physicians are sensitive to the characteristics of the locations in which they could potentially locate when beginning their careers in patient care.Key Words. Malpractice insurance, health professional shortage area, medical residency training, location choice Physician location decisions have long-lasting effects on the supply of health care available in a given market. Once a physician decides on his or her initial location, it is costly to relocate because acquiring a panel of patients and r Health Research and Educational Trust

Predictors of Primary Care Physician Practice Location in Underserved Urban or Rural Areas in the United States: A Systematic Literature Review

“…47,53 Burden of educational debt was a direct and indirect factor in the choice to practice in an underserved area. 19,20,55 In a study of exiting residents in New York, primary care physicians were more likely to locate in an HPSA if their absolute undergraduate medical education debt was less than $100,000. 19 The study also suggested that primary care physicians with no debt were three times more likely than primary care physicians with any debt to locate in a shortage area.…”

“…49 While having no burden of debt may make the choice of locating in HPSAs more likely among primary care physicians, relieving debt burden would not necessarily improve chances of underserved practice among all specialties (e.g., surgery and obstetrics/gynecology). 19 Interestingly, the loan repayment programs demonstrate a high physician retention rate in underserved areas compared to other incentivized service-obligation programs. 52 More research focusing on new and current financial factors specific to health care and reimbursement reform is needed.…”

Regional Differences in Hospitalizations and Cholecystectomies for Biliary Dyskinesia

“…Beyond factors examined in this study, regional differences in the organization of healthcare delivery or the health insurance market may contribute to this pitcture. Lastly, similarities between neighboring states described above may be a reflection of similarities in medical training, which does not only affect medical decision making, forming a culture of medical reasoning and decision-making, but also practice locations, as the majority of physicians choose practices in relatively close proximity to the location of their residency 5,6…”

Medical Liability Reform

“…The data is consistent with studies finding that statutory limits on noneconomic damages have a positive effect on where physicians locate their practices. 32 Figure 3 also refutes any theory that fewer physicians practicing in Mississippi in recent years resulted in fewer medical accidents and thus fewer lawsuits. More physicians practicing in the state presumably would be associated with more lawsuits in the absence of tort reform, not fewer.…”