The Effect of HMO Penetration on Physician Retirement

Published in: Health Services Research, v. 35, no. 5, pt. 3, Dec. 2000, p. 17-31

Posted on RAND.org on January 01, 2000

by Phillip R. Kletke, Daniel Polsky, Gregory D. Wozniak, Jose J. Escarce

Read More

Access further information on this document at www.pubmedcentral.nih.gov

This article was published outside of RAND. The full text of the article can be found at the link above.

OBJECTIVE: To examine the effect of HMO penetration on physician retirement. STUDY DESIGN: The authors linked together historical data from the Physician Masterfile of the American Medical Association for successive years to track changes in physicians' activity status between 1980 and 1997. They used a multivariate discrete-time survival model to examine how the probability of physician retirement was affected by the level of HMO penetration in the physician's market area, controlling for other physician and market characteristics. The study population included all active allopathic patient-care physician in the United States who reached age 55 between the years of 1980 and 1996. The main outcome measure was physician retirements as reported on the Physician Masterfile. PRINCIPAL FINDINGS: HMO penetration had a statistically significant positive effect on the retirement probabilities of generalists and medical/surgical specialists, but its effect on hospital-based specialists and psychiatrists was not significant. For generalists regression-adjusted retirement probabilities were roughly 13 percent greater in high-penetration markets (HMO penetration of 45 percent) than in low-penetration markets (HMO penetration of 5 percent). For medical/surgical specialists regression-adjusted retirement probabilities were roughly 17 percent greater in high-penetration markets than in low- penetration markets. CONCLUSIONS: The authors' findings suggest that many older physicians have found it preferable to retire rather than adapt their practices to an environment with a high degree of managed care penetration. Because the number of physicians entering the older age categories will increase rapidly over the next 20 years, the growth of managed care and other influences on physician retirement will play an increasingly important role in determining the size of the physician workforce.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.