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Congress Ignores Doctor Shortage

Congress bypassed an opportunity in recently enacted COVID-19 relief bills to significantly increase the number of Medicare-funded residency positions at hospitals.

In the last package, which amounted to $1.4 trillion in government spending and was signed by President Trump on December 31, lawmakers set aside $120 million for 1,000 new physician training slots over the next five years. There was a more ambitious bill on the table that would have added 15,000 residencies over the next five years, but it failed to make it into the giant year-end coronavirus relief package.

“The increase of 1,000 slots is a good first step but a far cry from what is needed,” said David Balat, director of the Right on Health initiative at the Texas Public Policy Foundation.

Pandemic Amplifies Problem

It has taken a global pandemic, the likes of which have not been seen since the Spanish Flu at the end of World War I, to expose a life-threatening vulnerability of the U.S. health care system: an acute shortage of medical personnel, especially emergency-room physicians.

With many hospitals around the country overwhelmed by the recent surge in COVID-19 patients, medical school graduates are having trouble finding residencies at a time when medical care is urgently needed. And many doctors, having completed their residencies, are having an equally difficult time securing full-time positions in a tight job market. A survey from the American College of Emergency Physicians found that 20 percent of emergency medicine group practices laid off doctors last year, almost one-third furloughed them, and more than half cut hours or wages.

Because people with non-COVID-19-related ailments avoided emergency rooms for fear of contracting COVID-19, cash-strapped emergency centers saw a drop in admissions and revenues, and many ceased recruiting new doctors.  The hardest hit is newly-minted physicians, many of them heavily in debt from medical school.

Congress Controls Doctor Supply

In many respects, today’s shortages are part of the long-lasting effects of congressional shortsightedness, dating back to the mid-1990s.

Guided by economists and physician groups who sounded the alarm that an impending physician glut would lead to needless treatments and higher spending, Congress, in the Balanced Budget Act of 1997, capped Medicare-funded residency positions at 1996 levels and paid hospitals to eliminate positions.  As noted by the Wall Street Journal on January 4, Medicare has funded the vast majority of residency positions at hospitals since 1965.

The abundance of physicians that was forecast a quarter-of-a-century ago never materialized. Instead, the country now faces a shortage of doctors, brought on by an aging population and medical workforce. A third of the roughly 906,000 practicing physicians in the United States are over the age of 60, and the Association of American Medical Colleges (AAMC) forecasts a physician shortage of 54,100 to 139,000 by 2033.  Shortages will be especially acute in geriatrics, primary and emergency care, the AAMC states.

With residencies having been capped at about 100,000 for over two decades, the shortfall in physicians projected by AAMC should come as no surprise. Indeed, a 2019 report by AAMC found that 44 percent of medical schools have moderate to major concerns about their inability to place graduates in residency programs.

Bypassing Congress

In an effort to attract qualified medical personnel to deal with the pandemic, some states have suspended state licensing requirements, allowing practitioners with a license from any other state to provide care to their residents.

State licensing boards could also remove regulatory barriers obstructing qualified foreign physicians to practice in the United States. Rules fail to consider credentials from abroad, says Jeff Singer, M.D., a surgeon and senior fellow at the Cato Institute (see related article, page 18).

State licensing boards “require international medical school graduates who have completed post-graduate medical school training and are licensed to practice in other countries to repeat their entire graduate training in an accredited U.S. institution before receiving a state medical license,” Singer wrote in The Detroit News on July 15.

“The blame lies with Congress and the states,” said Paul Larkin, a senior legal research fellow at the Heritage Foundation’s Institute for Constitutional Government.  “As for the states, they should provide financial incentives for doctors to remain in the state where they have completed their residency.”

Balat agrees.  “The shortage of physicians is due to congressional inaction to increase the residency caps,” Balat said.

The United States needs more than 1,000 additional residency slots.

“Lack of success in the residency application process, which is a reality for thousands of applicants every year, is what results in unmatched medical graduates,” Balat said. “This is an incredible waste of knowledge and talent while we lament too few practicing physicians.”


Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.



Bonner R Cohen
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.



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