Supply and demand

[2121115]

It often gets discussed on these forums whether or not an over supply of pathologists leads to greater income challenges, or conversely whether under supply would fix those issues. Forensic pathology is an interesting case study in this matter. According to a recent publication, there is a striking shortage of forensic pathologists, yet their income remains quite low (low income is even cited as one of the reasons for the shortage). Based on the supply and demand theory, a shortage of forensic pathologists should result in increased competition for their services and thus higher salaries. But we don't see that scenario play out. Maybe it is more complicated than that. Applying this logic to general pathology, maybe closing down residency programs and decreasing pathologist supply is overly simplistic and won't change the job situation for general pathology all that much. The data also makes me wonder if there really is as drastic a shortage as they say, since all the work seems to be getting done even though there are only 1/2 the number of forensic pathologists as is needed.

http://pathologyblawg.com/2012/08/14/new-report-confirms-critical-shortage-forensic-pathologists-us/

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[pathstudent]

It often gets discussed on these forums whether or not an over supply of pathologists leads to greater income challenges, or conversely whether under supply would fix those issues. Forensic pathology is an interesting case study in this matter. According to a recent publication, there is a striking shortage of forensic pathologists, yet their income remains quite low (low income is even cited as one of the reasons for the shortage). Based on the supply and demand theory, a shortage of forensic pathologists should result in increased competition for their services and thus higher salaries. But we don't see that scenario play out. Maybe it is more complicated than that. Applying this logic to general pathology, maybe closing down residency programs and decreasing pathologist supply is overly simplistic and won't change the job situation for general pathology all that much. The data also makes me wonder if there really is as drastic a shortage as they say, since all the work seems to be getting done even though there are only 1/2 the number of forensic pathologists as is needed.

http://pathologyblawg.com/2012/08/14/new-report-confirms-critical-shortage-forensic-pathologists-us/

Pathology income is fixed by CMS reimbursement and insurance contracts. So a shortage of pathologists would not increase maximum income. What it could do is prevent other entities from preying upon young pathologists right out of training. (i.e. Urologists could be forced to pay pathologists full PC or even a little more if they want to profit off pathology services, private groups would have to offer newly minted general pathologists a bit more salary and couldn't burn them and turn them, academia could be forced to up the ante to attract top recruits).

 

[2121115]

Pathology income is fixed by CMS reimbursement and insurance contracts. So a shortage of pathologists would not increase maximum income. What it could do is prevent other entities from preying upon young pathologists right out of training. (i.e. Urologists could be forced to pay pathologists full PC or even a little more if they want to profit off pathology services, private groups would have to offer newly minted general pathologists a bit more salary and couldn't burn them and turn them, academia could be forced to up the ante to attract top recruits).

Sure, almost all physician income is based on RVU values assigned by the AMA RUC/CMS. But with lower supply (as you mentioned) more of pathology service-related income would stay in the fold, rather than going to other physicians; thus it would support pathology incomes.

 

[KeratinPearls]

It often gets discussed on these forums whether or not an over supply of pathologists leads to greater income challenges, or conversely whether under supply would fix those issues. Forensic pathology is an interesting case study in this matter. According to a recent publication, there is a striking shortage of forensic pathologists, yet their income remains quite low (low income is even cited as one of the reasons for the shortage). Based on the supply and demand theory, a shortage of forensic pathologists should result in increased competition for their services and thus higher salaries. But we don't see that scenario play out. Maybe it is more complicated than that. Applying this logic to general pathology, maybe closing down residency programs and decreasing pathologist supply is overly simplistic and won't change the job situation for general pathology all that much. The data also makes me wonder if there really is as drastic a shortage as they say, since all the work seems to be getting done even though there are only 1/2 the number of forensic pathologists as is needed.

http://pathologyblawg.com/2012/08/14/new-report-confirms-critical-shortage-forensic-pathologists-us/

Aren't forensic pathologists county/government employees? I don't know if you can apply the supply/demand logic to them since they are government/county employees?

 

[veo1]

Aren't forensic pathologists county/government employees? I don't know if you can apply the supply/demand logic to them since they are government/county employees?

Completely agree. We're comparing apples and oranges here. The reimbursement scheme is entirely different for FPs. Furthermore I found that the FP fellows at my program were highly sought after and had multiple offers and could actually choose where they wanted to work. So their shortage has resulted in much better job prospects than we have in general pathology practice. We need cuts in residency spots ASAP. That's a big reason why these slide mills and pod/in-office labs thrive. There's no shortage of new grads looking for any kind of job so long as it isn't another fellowship. They are willing to work for next to nothing.

 

[deleted314957]

that is because they get paid by the government. that will happen to the rest of us when there is socialized/federalized medicine and we are in essence gov't employees

 

[mlw03]

So this is obviously a topic that hits close to me. So far, I agree with most of what everyone has said. Yes, most (not all) FPs are government employees, and that's thought to be a big part of why salaries are lower than one would expect based on pure supply/demand economics. Also agree most FP fellows do have some choice in finding a job (all 3 from my fellowship did). One thing I'll disagree with is that all the work is getting done. That's a very subjective statement. If there were more FPs we'd probably accept more cases, do more full autopsies (rather than external examinations or partial autopsies), and would have more humane workloads for some overworked folks. The standard by the NAME standard is ideally no more than 250 cases/year/pathologist, with more than 325 being a violation towards accredidation. There are plenty of FPs around the US doing more than 300 cases/year. Now the surg path people can scoff, but 300 autopsies, along with the other stuff we have to do, is a lot of work. And FP is far more physically tiring than any other area within pathology. You try autopsying a 350 guy and see how you feel afterward.

But I'm glad to see this being discussed here.

 

[Entgegen]

The supply/demand thing is something that's been discussed on other forums like AuntMinnie.com, the big radiology forum. Ever since their job market started to tank (and they're graduating >1,100 new radiologists every year), many of their current residents/fellows have been calling for a decrease in residency positions, but some of them had said things in opposition to creating an artificial shortage that seem to make sense. A post from AuntMinnie:

"To create an artificial shortage would threaten the long-term health of our field, because if radiologists are unable to meet the demand for diagnostic imaging - either in quantity (increasing turn around time) or quality (worsening interpretations due to less time spent per study) - then we are providing further motivation for other specialists to encroach upon our field. And Radiology is uniquely susceptible to poaching by clinicians, as clinical subspecialists are well-suited (as they own the patients and know the anatomy/pathology) and well-motivated (diagnostic imaging makes money) to read their own studies. Many OB-GYNs prefer to read their own studies, and fewer and fewer radiologists are comfortable or proficient scanning fetal surveys themselves. I've come across neurosurgeons who are fairly good at reading their CTs and MRIs and orthopods who are fairly good at reading their plain films and MRIs. It matters not that we have the potential to read them better (and not all of us do), it only matters that with sufficient interest and focus they can learn to read them well enough to take it from us. (Think echo and vascular ultrasound). Even if this view is challenged, you have to admit that a neurosurgeon is more likely to read their own imaging studies (and benefit from it) than a radiologist is likely to start to doing brain surgery and encroach on neurosurgeons' work."

Others made a point about midlevels encroaching in the field to help alleviate any sort of shortage, like PAs/NPs, CRNAs, etc. Now I'm not sure how many of those in other specialties would jump on reading slides (I doubt very many), but it seems the work would have to get done somehow...after all, there's always ever-increasing technology in the form of molecular/genetics testing, in vivo endoscopy, radiologic molecular markers, etc. Just something else to think about.

As for FP, I agree with the others who've said that it's not as subject to supply/demand issues as other fields. It's essentially a public service, like fire fighters, law enforcement, public school teachers, etc...it doesn't seem to actually generate income (private autopsies aside). Like any other line of work where one is employed by local/state/federal governments, the amount of work you're able to do is constrained by the budget you're given. I saw an NPR investigative documentary on the state of death investigation in the US. In it they mentioned that in LA county, only half of all suspicious deaths are investigated. But that's not necessarily due to the lack of people to do the work, it's due to the fact that they don't have the monetary resources to do the work that needs to be done.

 

[yaah]

Supply and demand is a very difficult issue.

The main problem is that it is not an auto production line - you can't just shut off the pipeline. Any changes to residency programs, number of graduates, etc, really don't have any effect for several years. And that is assuming the changes can be made immediately (which they can't). So any attempt to reduce residency slots, reduce supply, would take close to 5-10 years to have any effect at all.

And despite what people say here, the fact remains that the average pathologist age is far closer to retirement than the beginning of a career.

So it is far from a simple question and far from a simple solution. There are a lot of smart people around who do think that there will be a potential shortage of pathologists 5-10 years down the line. These are not people who have a vested interest in resident supply, a lot of these people are in private practice who would probably benefit more personally by having fewer pathologists.

 

[schrute]

that is because they get paid by the government. that will happen to the rest of us when there is socialized/federalized medicine and we are in essence gov't employees

What do you care? Didn't you already get your 30 pieces of silver?

 

[pathstudent]

What do you care? Didn't you already get your 30 pieces of silver?

That's uncalled for. You would have done the same thing.

Don't hate. Celebrate the success of others.

 

[schrute]

That's uncalled for. You would have done the same thing.

Don't hate. Celebrate the success of others.

Please. Success of others at the expense of others.

It's "uncalled for" to deflate someone expressing feigning concerns for a field in which he has no stake or vested interest? Maybe as a matter of principle Mike isn't fond of the govt, but I have no qualms decrying the fact that the younger generation of physicians is getting shat on not only by the govermnet but by everyone who had their way with the golden goose.

 

[pathstudent]

Please. Success of others at the expense of others.

It's "uncalled for" to deflate someone expressing feigning concerns for a field in which he has no stake or vested interest? Maybe as a matter of principle Mike isn't fond of the govt, but I have no qualms decrying the fact that the younger generation of physicians is getting shat on not only by the govermnet but by everyone who had their way with the golden goose.

"Mike" started a successful business and then sold it. That sounds patriotic to me.

You would have done the same thing. If you had the chance to do something that you thought really financially helped your spouse and kids, would you do that, or would you say "No I shouldn't do that because some anonymous guy named Schrute is going to think he got screwed because of this."

We need to realize it is over. The typical private practice salary for a healthy practice was probably 600-700k a year for the last 20 years. But it is over, and that is only obtainable for a few us in the short and term and soon it will be nobody. Many of the practices have all been sold to corporate America, private insurers are eager to ratchet back reimbursement to increase their profit margins, taxes are going up as part of the current administrations desire for wealth redistribution via increasing taxes and decreasing reimbursement to physicians.

 

[schrute]

"Mike" started a successful business and then sold it. That sounds patriotic to me.

You would have done the same thing. If you had the chance to do something that you thought really financially helped your spouse and kids, would you do that, or would you say "No I shouldn't do that because some anonymous guy named Schrute is going to think he got screwed because of this."

We need to realize it is over. The typical private practice salary for a healthy practice was probably 600-700k a year for the last 20 years. But it is over, and that is only obtainable for a few us in the short and term and soon it will be nobody. Many of the practices have all been sold to corporate America, private insurers are eager to ratchet back reimbursement to increase their profit margins, taxes are going up as part of the current administrations desire for wealth redistribution via increasing taxes and decreasing reimbursement to physicians.

Don't act as if retirement-age pathologists had (and have) no choice but to sell their practices to corporate leviathons. Prior to a certain point, it was still financially advantageous to sell practices to incoming physicians; perhaps not as advantageous as selling to a megalab, but don't tell me all these private groups had no other option.

Starting a business & contributing to our economy may well be "patriotic", but medicine doesn't boil down to "being patriotic," it boils down to patient care. If one is lamenting the current state of healthcare & the downward spiral to a socialized system, it seems counterintuitive to simultaneously cheer an expedited course via the corporatization of pathology services.

Besides, "government employment" vs "AmeriPath/Quest/LabCorps/et al employment" seems like splitting hairs to me.

 

[pathstudent]

Don't act as if retirement-age pathologists had (and have) no choice but to sell their practices to corporate leviathons. Prior to a certain point, it was still financially advantageous to sell practices to incoming physicians; perhaps not as advantageous as selling to a megalab, but don't tell me all these private groups had no other option.

Starting a business & contributing to our economy may well be "patriotic", but medicine doesn't boil down to "being patriotic," it boils down to patient care. If one is lamenting the current state of healthcare & the downward spiral to a socialized system, it seems counterintuitive to simultaneously cheer an expedited course via the corporatization of pathology services.

Besides, "government employment" vs "AmeriPath/Quest/LabCorps/et al employment" seems like splitting hairs to me.

This is so absurd. I never said they didn't have a choice. They did what anyone sane person would do and that is doing what is best for their and their family's long term security.

If you were 68 and starting to think about winding down and someone was willing to pay you 3,000,000 for your share in a successful private practice that you built with your bare hands, would you really say "no, I need to leave this all for Schrute".

 

[deleted314957]

You got me. i should have checked with you back in 1996. I should have found out what junior high or high school you were in, come to see you during homeroom and ran the whole idea past you; should have checked what your career plans and speciality intentions were. Maybe i should have had an associate coming into partnership just buy me out for 260k,( what my buy-in was).

Waku up and smell the coffee, Sunshine.

 

[2121115]

Every single one of us would have done what Mike did in that situation. I sure would have. Maybe one day I will.

 

[WEBB PINKERTON]

Quality and patient care are the LAST considerations when selling out. Almost every lab in my area that has sold out has lost a lot of business. In recent years I watched a very stupid national lab buy 3 different operations in a 30 mile radius, lose significant business in all three and eventually combine them into one lab with probably half the volume they had when they were independent. They gutted and made them into reckless sweatshops. Maybe their goal was to just kill them off anyways and take whatever business they could manage to hold onto.

"Patriotic" would be not selling out and investing in infrastructure, competing, creating a brand.

 

[pathstudent]

Every single one of us would have done what Mike did in that situation. I sure would have. Maybe one day I will.

I don't think you will. I am not sure Ameripath and ilk are buying up practices still.

Moreover, you will be less incentivized to sell as previously the tax hit was 15% for selling a practice (capital gains). Soon it will be at least 40% as Capital Gain income is definitely under scrutiny and proposed to be taxed like W2 wages plus there is the ACA 3-4% tax penalty on Capital Gains to help fund the act.

The basic formula for buying practices is 4x revenue. I.e if a private practice netted 3,000,000 a year which was split among 4 partners, Ameripath would pay 12,000,000 to be split amongst the 4 partners. They would then put the pathologists on salary so that they would make their money back in about 7 years. So if you planned on practicing for more than 7 years it is of questionable value to sell your practice, unless the lump sum and the security it gave you was worth the long term reduction in pay if you worked 20 years or something like that.

And in 20-30 years when we could think about selling practices we will all be governement employees earning 170k a year and we will be out there strking with the Chicago Teachers earning 160k a year.

 

[schrute]

You got me. i should have checked with you back in 1996. I should have found out what junior high or high school you were in, come to see you during homeroom and ran the whole idea past you; should have checked what your career plans and speciality intentions were. Maybe i should have had an associate coming into partnership just buy me out for 260k,( what my buy-in was).

Waku up and smell the coffee, Sunshine.

Give me a break. My initial point, as it's been lost in the smugness, was that YOU, of all people, complaining about the downward spiral of pathology into the hands of bureaucracy & socialization, is the pot calling the kettle black.

This isn't about some entitlement mentality you and Pathstudent seem to insist I suffer from; I expect nothing from anybody and I've never assumed otherwise. It's about the irony that someone who made a killing selling his slice of the pie would simultaneously complain abouth the sad state of our field when his actions fit right in line with the contributing problem.

How did you word it? We will all be"...in essence gov't employees"?
Do you think it's markedly better if we're all "in essence" AmeriPath employees?
LabCorps employees?

I didn't say you did what no one else did/would do, but if you can't see the hypocrisy in complaining about being a "gov't employee" versus a being MegaLab employee, you're delusional.

Everyone on this forum complains to high heaven about the crappy job market and laments the rise the megalabs, while simultaneously admitting they'd do the same thing the previous generation of pathologists collectively did. Is that not ironic?

 

[pathstudent]

How did you word it? We will all be"...in essence gov't employees"?
Do you think it's markedly better if we're all "in essence" AmeriPath employees?
LabCorps employees?

much better to be government employee. We would get flag day and **** like that off.

And yes our generation of pathologists is the most entitled group of pathologists to live. We are like that nirvana song with the lyric thy goes "we're stupid and contagious. Here we are now. Give us a 500,000 a year job".

 

[lipomas]

much better to be government employee. We would get flag day and **** like that off.

And yes our generation of pathologists is the most entitled group of pathologists to live. We are like that nirvana song with the lyric thy goes "we're stupid and contagious. Here we are now. Give us a 500,000 a year job".

Yep. It's a massive conflict between the "I am going to bleed the system dry, take whatever I can get, and leave the future in disarray" generation (i.e. baby boomers) vs the "I want everything so give it to me, I deserve it because I worked really hard by spending one day a week studying and volunteering 1 hour a week" generation (i.e. the "Millenials.")

 

[Pathwrath]

Yep. It's a massive conflict between the "I am going to bleed the system dry, take whatever I can get, and leave the future in disarray" generation (i.e. baby boomers) vs the "I want everything so give it to me, I deserve it because I worked really hard by spending one day a week studying and volunteering 1 hour a week" generation (i.e. the "Millenials.")

LOL. I've heard Boomers described as the generation with guaranteed pensions, Gen Y as the generation with tattoos, and Gen X as the ones with neither.

 

[path24]

"There will be a shortage of pathologists in the future" said in 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012. Sad but very true. xf: will be said in 2013-2025...at least).

Other doctors are not reading the slides, they are hiring us to do it for peanuts (If one pathologist turns them down another will say yes, we are begging/dying for work....gotta feed your kids). We are not really losing our turf, there is an OBVIOUS oversupply so we can be exploited. When GI docs start doing a GI path fellowship...then our specimens/turf will disappear.

 

[KCShaw]

When did non-FP pathologists all stop getting paid by the government (at least to some extent), and stop being influenced by government actions? I'm not so sure the comparison is entirely flawed, but certainly there are significant differences between most forensic paths and most other pathologists in terms of this thread.

There is a proportion of FP's who contract with not only counties or states, but also hospitals to provide services. Yes, most of the time even a "private" FP office depends on a county budget, and it's not as simple as increasing your workload to increase your income.

As far as the workload across the country being managed, one has to remember that in some areas the local system is so entrenched that they don't see not examining every apparent unattended natural, MVA, suicide, or even some homicides, as a problem. If they do see it as a problem they're not going to let the bodies pile up or call the media, so it doesn't become a major political problem. And if those bodies are examined they might be examined by a local PCP, surgeon, non-boarded but perhaps residency trained pathologist, or a non-FP pathologist. Even some large MEO's have non-boarded "pathologists" on staff to help with the workload. And as mlw indicated, there are people doing far, far more than the max as published for NAME accreditation (325) -- some in the range of 600-700 per year, and with at least one office undergoing some major MAJOR issues and overhauls that average per pathologist is probably on the order of 1000-1250. Which is totally untenable.

But as the job market goes, it's pretty good in terms of finding a job. Less good in terms of probably having to move a significant distance for every job change. And although historically the salaries have been sub-par, the average starting salary seems to have increased a bit every year since I started checking those sorts of things. Precisely why that is, despite the economic hits lately (which led to some hiring freezes and other cost-saving measures here and there, but doesn't seem to have cut into salaries that much, as far as I can tell), I don't know -- possibly more political recognition of how a good/bad death investigation system can help/hurt those holding the purse strings, and possibly CSI effect. On the other hand, the salary ceiling is relatively low except for those rare few who develop a large private consulting business -- most people will eventually do a "few" private cases or be paid privately for testimony in civil cases outside the responsibilities of their main job, but not that many make enough to -only- do that.

What we can reliably gather from the FP situation and apply to surg path, I don't know. I do think the situation is more complex than it at first appears. While not immune, FP seems to be more resistant to mid-level creep or other specialties cutting in -- if anything, the trend has been toward *more* places requiring board certified FP's rather than replacing them with unboarded individuals, other physicians/surgeons (of course how many would really want to do it?), or PA's. Anyway. Interesting topics without a lot of definitive answers right now, IMO.