Description Worksheets to Be Submitted to OMB

(1) Total Number Employed: The total number of agency physicians eligible for PCA (includes all eligible physicians, whether or not they actually received PCA bonuses) should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part 1. The total number of agency physicians actually receiving or expected to receive PCA should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part II. The same data should be provided by category for each of the fiscal years.

(2) Number of Physicians Signing One-Year and Two-Year PCA: Under the PCA program, physicians may elect to sign a one-year or two-year PCA service agreement. For those physicians actually receiving or expected to receive PCA (Part II), the number of physicians signing one-year and two-year agreements should be supplied for each fiscal year.

(3) Average Compensation per Physician: Average annual compensation per physician should exclude the PCA bonus, but include base pay and all other bonuses and awards. The average compensation for agency physicians eligible for PCA should be supplied for the fiscal years 1994. 1995, 1996, 1997, and 1998 in Part I. The average compensation for agency physicians actually receiving or expected to receive PCA should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part II. The same data should also be provided by category for each fiscal year.

(4) Average PCA Amount per Physician, by Category: The average annual PCA bonus paid per physician for all categories, as well as for each individual category of physician, should be supplied for each fiscal year in Part II.

(5) Average PCA Amount per Physician, by Length of Service Agreement: The average annual PCA bonus paid per physician should be supplied for physicians with a one-year service agreement and two-year service agreement and for each fiscal year in Part II.

(6) Average PCA Amount per Physician, by Length of Federal Service: The average annual PCA bonus paid per physician with (a) less than two years creditable Federal service, and (b) two or more years creditable Federal service, should be supplied for each fiscal year in Part II.

(7) Average Number Years Continuous Service: The average number of years of continuous creditable Federal service as a physician for those eligible (Part I) and actually receiving or expected to receive PCA (Part II) should be supplied for each fiscal year. The average should be calculated as of the end of the fiscal year in question (e.g. for an agency with one eligible physician who began Federal service as a physician under the General Schedule on October 1, 1996, would have one-year creditable Federal service for purposes of PCA for fiscal year 1998).

(8) Number of Accessions: The total number of accessions for all physicians (Part 1) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number of accessions by category for each fiscal year should also be supplied.

(9) Number of Separations: The total number of separations for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number of separations by category for each fiscal year should also be supplied.

(10) Number of Unfilled Full-Time Equivalent Physician Positions: The number should be equivalent to the total number of physician positions for which the agency has budgeted for the fiscal year in question less the number of physicians on-board during the fiscal year. For example, the agency may have budgeted for 12 full-time equivalent physician positions for the prior fiscal year, but had only 9.5 physicians on-board for the entire year (9 physicians on-board the entire year, and one on-board for six-months of the year). The number of unfilled full-time equivalent physician positions in this case is equal to 2.5.

The total number for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number by category for each fiscal year should also be supplied.

(11) Average Length of Time Physician Positions Remained Unfilled: The time should be reported in months as of the end of the fiscal year (e.g., as of the end of the prior fiscal year the average length of time vacant physician positions remained unfilled might be 13 months, and for the current fiscal year it may have declined to an average of 8 months). Only the time during which the agency was actively searching for candidates should be counted. The total number for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number by category for each fiscal year should also be supplied.

UNITED STATES
OFFICE OF PERSONNEL MANAGEMENT'
WASHINGTON. D.C. 20415

JULY 18, 1997

OFFICE OF THE DIRECTOR

Honorable Newt Gingrich
Speaker of the House of Representatives
Washington, DC 20515

Dear Mr. Speaker:

The purpose of this letter is to transmit a report on Physicians Comparability Allowances (PCA's), as required by section 5948(j) of title 5, United States Code. The report was prepared by the Office of Management and Budget using data gathered from those agencies with approved plans.

The enclosed report describes which agencies have entered into PCA agreements, the recruiting and retention problems justifying their use, the number of physicians entering into PCA agreements and the duration of the agreements, the size of the allowances provided, and the degree to which recruitment and retention problems are alleviated by the allowance.

The report also recommends a simple 3-year reauthorization of the PCA authority to September 30, 2000. Under the current PCA authority (5 U.S.C. 5948), no PCA service agreement may be entered into later than September 30, 1997.

Enclosure

Presidential Report on the Physicians Comparability Allowance

Introduction

Public Law 103-114 requires the President to report to Congress on the operation of the Physicians Comparability Allowance (PCA), including information on:

• which agencies use the allowance;
• the nature and extent of recruiting and retention problems justifying the use of the allowance by each agency;
• number of physicians with whom agreements were entered into by each agency;
• size of the allowances and duration of the agreements;
• and the degree to which the allowance alleviates recruiting and retention problems.

To prepare this report, the Office of Management and Budget (OMB) asked all agencies with PCA eligible physicians to provide data on:

• number of physicians they employ, type of work they do (clinical research, occupational health or disability evaluation), how many are eligible for the allowance and how many actually receive it;
• average compensation (excluding PCA) of physicians receiving and not receiving the allowance, size of the average PCA, and size of allowances provided to eligible physicians by category of work and length of PCA agreement;
• average number of years of continuous service per physician, number of accessions and separations the agency experienced, number of unfilled physician positions and average length of time positions were vacant;
• descriptions of the physicians' work, and recruiting and retention problems justifying payment of PCA.

Using these data, the report describes the use of PCA by Federal agencies. It also addresses the Federal physician recruiting and retention situation, and the effectiveness of PCA in improving the situation.

Reauthorization of PCA

Under 5 U.S.C. 5948, the current PCA authority extends to September 30, 1997. Based on information presented in this and previous reports to Congress, PCA has been effective in assisting Federal agencies to address recruitment and retention problems for physicians. Consistent with these findings, the Administration supports a simple, 3-year reauthorization of PCA to September 30, 2000. The simple reauthorization will allow OMB and the Office of Personnel Management (OPM) to continue to monitor the impact of PCA on the recruitment and retention of Federal physicians.

Background

The Physicians Comparability Allowance authorizes agencies documenting severe recruitment and retention problems to pay annual bonuses to physicians, up to $14,000 per year for physicians with less than two years Federal service and up to $20,000 for physicians with more than two years Federal service. PCA was originally authorized by P.L. 95-603 in 1978 (5 U. S. C. 5 94 8) and has been reauthorized a number of times, including 1979, 1981, 1983, 1987, 1990 and 1993. Most of the reauthorizations were simple extensions of the PCA authority. The 1987 reauthorization doubled the maximum allowable bonuses to the current 1evels.

PCA is authorized only to solve severe, documented physician recruitment and retention problems. For the purpose of this allowance, severe recruitment and retention problems are considered to exist if all of the following conditions exist: long-lasting position vacancies; high turnover rates in positions requiring well-qualified physicians; applicants do not have the superior qualifications necessary for the position; and existing vacancies cannot be f:illed with well-qualified candidates without PCA. Some agencies use alternative programs to improve recruitment and retention of physicians such as the physician special pay authority under title 38, United States Code, that are not covered by this report.

Summary of PCA Usage Throughout the Federal Government

Table 1. Number and Compensation of Federal Physicians Receiving PCA

As of FY 1996, the last year for which we have complete data, 1,841 physicians in Federal employment received PCA, out of 2,402 who were eligible. The average allowance paid was $15,765. The largest users of PCA were the Department of Health and Human Services (HHS), which gave bonuses to 1,019 physicians and the Department of Defense, which gave bonuses to 487 physicians.

The recruiting and retention problems that justify the allowance vary greatly. Some agencies require physicians with special expertise such as aeronautics or agriculture. Other agencies require physicians to live and work in remote areas. Still other agencies suffer difficulties because local non-Federal competition for physicians has driven salaries past the standard government pay scale.

The percentage of physicians receiving PCA has risen from FY 1994 to FY 1996, but estimates for FY 1997 indicate a decline from FY 1996. The average compensation (excluding PCA) for physicians has risen consistently over the years, and estimates for FY 1997 indicate this trend will continue. From FY 1994 to FY 1997, PCA has constituted roughly 17% of the income of the physicians who receive the allowance.

Table 2. Data on Number and Compensation of Federal Physicians by Length of Agreement

Most of the use of PCA has been among physicians signing two-year agreements. The number of one-year contracts dropped by nearly 20% in FY 1996, primarily due to an increase in the use of other pay authorities by HHS (the largest user of PCA). The number of two-year contracts declined slightly in FY 1996 as well FY 1997 estimates predict a 9% increase in the number of one-year agreements and a 6% decrease in the number of two-year agreements.

The data on personnel activity show that physicians receiving PCA generally have lower turnover rates than those who are eligible but not receiving the allowance. In FY 1996, new accessions accounted for 24% of the number of physicians eligible for but not receiving PCA. Of the physicians eligible for but not receiving PCA, 26% separated from Federal service in FY 1996. The turnover rate among physicians receiving PCA in FY 1996 was slightly lower than the rate for physicians eligible for but not receiving PCA. New accessions accounted for 18% of the physicians receiving PCA, with an equal percentage of physicians receiving PCA separating from Federal service in FY 1996.

The percentage of PCA eligible positions that were unfilled fell from 19% in FY 1994 to 9% in FY 1995, but rose to 12% in FY 1996. While the decrease in the number of vacant positions in FY 1995 was more the result of Federal government downsizing than an actual increase in positions filled, the fluctuation in unfilled positions continues in FY 1997. Preliminary FY 1997 data predict a decline in unfilled positions from FY 1996.

Table 3. Data on Accessions, Separations, and Vacancies in Positions Eligible for or Receiving PCA

National Physician Supply and Salary

Data on the number of physicians in Federal employment by specialty are not available, though anecdotal evidence and agency reports suggest most are general practitioners. Because these data are not available, it is not possible to compare the income of Federal physicians with that of private practice physicians. However, according to a study conducted by the American Medical Association, U.S. non-Federal physicians earned an average net income (after expenses and before taxes) in 1995 of $195,000, a 7.2% increase over 1994 income levels. Physicians in general or family practice earned an average income (after expenses, before taxes) of $124,000.^1/ In 1995, the most recent data available, a total of 681,694 physicians were professionally active in the United States.^2/

Summary - Effectiveness of PCA

The FY 1996 data demonstrate that PCA contributes to improved recruitment and retention of Federal physicians. For example, in FY 1996, the turnover rate among those eligible for but not receiving PCA was greater than the turnover rate among physicians receiving the allowance. In addition, over the past several years, three-fourths of all eligible physicians have chosen to enter into service agreements and receive PCA. However, the data also indicate that there are other factors outside PCA which influence physicians' decisions to enter Federal service and, therefore, also affect their recruitment and retention. For example, the higher percentage of accessions among physicians eligible for but not receiving PCA indicate that physicians choose to enter into Federal service in spite of PCA.

As the narratives provided on the following pages indicate, Federal agencies employ physicians in a wide variety of geographic areas to serve multiple functions. This diversity presents numerous challenges and opportunities to Federal policy for the recruitment and retention of physicians. PCA is one of many methods used by Federal agencies to address these recruitment and retention challenges. Based on the findings in this report, the Administration supports a simple 3-year reauthorization of the PCA authority to September 30, 2000.

1. American Medical Association Center for Health Policy Research: American Medical News, Jan. 6, 1997.

2. U.S. Department of Health and Human Services: Health: United States 1996, Unpublished 1995 data.

Summary of Agency PCA Reports

Agencies with PCA Eligible Physicians

Executive Order No. 12109, signed on December 28, 1978, delegates PCA authority granted to the President under 5 U.S.C. 5948 to the Directors of the OPM and OMB. The following agencies employ physicians eligible for PCA (listed in descending order of number of physicians receiving PCA in FY 1996):

Summary descriptions of each agency's use of PCA:

Department of Health and Human Services (HHS)

Department of Defense

Department of Justice