The United States is experiencing a physician shortage that is even more dire in rural areas. The Association of American Medical Colleges estimates that today there is a shortage of from 44,000 doctors to perhaps as high as 67,000 physicians. By 2034 the shortage is expected to range from 37,800 physicians to as much as 124,000 physicians. The supply of physicians is a function of those entering the profession, those in the profession, minus those retiring or slowing down. Keep in mind the youngest physicians entering the field are usually 30 years old or more. Thus, there is only a 30-year window for them to establish a practice before reaching retirement age. A significant proportion of licensed physicians (45%) are over age 55. Many are part of the Baby Boomer generation who will be retiring soon and become patients themselves rather than treating patients.
Medical school both is difficult and expensive. However, the physician shortage isn’t due to a lack of medical graduates. The bottleneck in boosting the number of physicians is residency slots. Residency typically lasts from three to seven years, depending on the area of practice. Medical graduates may have a Doctor of Medicine or Doctor of Osteopathy degree but can never practice medicine until graduates have been matched to a residency program. More than 10,000 medical graduates do not match to a residency program in any given year. Some return the next year and try again, while many others give up.
Why does the United State turn away more than 10,000 medical graduates each year who want to practice medicine in the U.S.? The reason is because in 1997 Congress capped the number of residency slots Medicare funds. Without federal funding for new residency slots, growth in residencies slowed to a crawl. Some states fund residencies, because 56% of doctors stay and practice within the state where they were trained. Some hospitals partner with states and have added some new residency slots. However, the shortage of residencies is not growing fast enough to alleviate the physician shortage. The shortfall of physicians will only grow worse as Baby Boomers reach old age and need more care.
In 2021 Congress added 1,000 residency slots to an appropriations bill. Yet, these will only be added at a rate of 200 a year starting in July 2023. The Centers for Medicare and Medicaid Services (CMS) announced that these would mostly be awarded to teaching hospitals in Health Professional Shortage Areas for primary care (63%) and psychiatry (10%).
1) Raise the cap on residency slots funded by Medicare above 100,000. Leventhal states that the lowest one-quarter of hospitals receive more than $100,000 a year in funding for each residency, while half receive more than $150,000 a year. Granted, that’s not chump change but it may be necessary to boost the physician supply.
2) Require hospitals to contribute more towards residency costs. Physicians in on-the-job training (which is basically what a residency is) work longer hours than hospital staff and cost less than the salaries of nurse practitioners and physicians’ assistants. They are cheap labor in terms of skills they bring to patient care. One way to get hospitals to shoulder more of the cost of residencies would be to cap the total amount of funding for each residency.
3) Let medical graduates themselves pay some of the cost of residencies. There are literally 10,000 medical graduates a year who are denied a residency. Some of these will never practice medicine. Some may be willing to work for free and essentially be an unpaid volunteer for three years if it means they will be allowed to practice medicine in the United States. It is certainly difficult to pay off medical school student loans if denied the chance to practice medicine.
My suggestion is to employ an all-the-above and the kitchen sink strategy. It is unconscionable that there are more than 10,000 medical graduates a year who will never be allowed to practice medicine. Congress should raise the residency cap but also work with states, hospitals and medical graduates to boost residency slots even further. Perhaps hospitals could get one fully paid new residency slot in return for partially funding another in partnership with the state and the medical graduate him or herself. CMS has already announced plans to boost primary care and mental health care. States may be willing to match some funds to boost primary care within their states.