The Profit-Driven Causes of the US “Physician Shortage”

This year, thousands of qualified physicians were prevented from practicing medicine due a shortage of training programs. The reason is primarily to bolster hospital profits and maintain high physician salaries.
  • Sourik Beltrán | 
  • April 9, 2021

Last month, 33,000 graduating medical students found out where they will spend the next three to nine years for their residency training. Known as the “Match,” this is the last step before students obtain their medical licenses and board certifications. However, while this year’s Match saw record numbers of participants, there was an almost 10,000-person gap between the number of qualified physician applicants and open residency positions. The result was yet another year in which thousands of capable medical graduates had their careers suddenly halted because of a lack of available places to train. On top of being deeply frustrating for the applicants themselves, the problem of “unmatched” physicians highlights a larger issue of the deliberate creation of our current and worsening physician shortage.

In the United States, it is projected that there will be a deficit of about 50,000 to 120,000 physicians by the year 2032. It is also expected that this deficit will disproportionately harm people already chronically neglected by the U.S. healthcare system such as poor and rural communities of color. This issue has raised considerable alarm within the medical community with now annual reports being published by the Association of American Medical Colleges (AAMC) detailing exactly how bad we can expect it to get. Nevertheless, the irony in physician organizations showing concern for the predicted shortage is that the problem is a direct result of those same organizations’ prior lobbying efforts.

As a result of President Clinton’s 1997 “Balanced Budget Act,” congress placed hard limits on the number of residency spots in the United States. This has meant fewer licensed doctors and, as a result, inflated physician salaries due to the low supply and high demand. Furthermore, fewer resident physicians alongside rising healthcare utilization meant more hospital labor shared between fewer salaried doctors. Essentially, the policy was designed to increase hospital and physician profits at the expense of the country’s healthcare needs.

How did something so clearly harmful and profit-driven become law? The answer is the same as any recent legislation designed under our for-profit healthcare system: institutional and corporate influence. Prior to its adoption, the American Medical Association and other large physician organizations including the AAMC loudly endorsed the Balanced Budget Act, erroneously warning the American public in a joint statement that the “United States [was] on the verge of a serious oversupply of physicians.” The statement even recommended further reducing training spots by up to 25 percent. These efforts played a key role in the budget’s eventual enactment and persistence to this day. 

Currently, even as medical student enrollment has increased by 30 percent in the last few years, the number of residency spots created by the Accreditation Council for Graduate Medical Education (ACGME) has only grown by an average of 1 percent per year since 1997. As a result, every year there are thousands of fully-qualified physicians who are needlessly prevented from finishing their training meanwhile countless Americans remain without access to even basic healthcare.

While data is sparse regarding exactly who these “unmatched” physicians are, it is possible (if not likely) that those left behind by the residency selection process are the exact kinds of doctors we need more of. In a field that relies heavily on standardized testing, wealthier medical graduates — those who can afford tutors or expensive study materials — are likely to be favored when it comes to filling those few spots. Furthermore, combined with the known racism that already influences resident selection, this process may specifically restrict the availability of physicians who come from working class or Black, Latinx, and Indigenous backgrounds. This is especially concerning since physician shortages already disproportionately impact these same communities 

The limits on residency spots created by the 1997 federal budget essentially laid the groundwork for the current physician deficit by ensuring that the supply of new doctors stayed as low as possible. Only in the last year have these policies finally begun to be challenged in congress. However, even with recent incremental changes in medicaid-funded residency spots, we are still training physicians practically at the same rate as we were 25 years ago.

Residency itself is deeply exploitative, and will require considerable reform to address its labor abuses and other documented harms. However, short of broader, systemic changes in how we train our doctors, mitigating the imminent threat of a physician shortage must at least start with allowing hospitals to train the many qualified medical graduates who have been left behind as a result of current funding restrictions.

A shortage of physicians in the United States presents a significant problem for a country whose healthcare system is already rife with major disparities in healthcare and access to resources. Two and a half decades since congress froze the number of physician training positions, it is long overdue that we fight for change.

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