How Medicare Funding Worsens the Doctor Shortage

The Link Between Medicare and Residency Training

doctor shortage
Physicians are leaving medicine and a doctor shortage is on the way. Caiaimage/Paul Bradbury/ OJO+/ Getty Images

There is no doubt about it. A doctor shortage is on the way. The Association of American Medical Colleges estimates that we will be short 46,000 to 90,000 physicians by 2025. As many as 12,500 and 31,100 of these positions will be in primary care roles and 28,200 and 63,700 in non-primary care specialties. This shortage could impact care to aging baby boomers and patients of all ages if action is not taken.

How Money Doctors Are There?

There are 914,720 doctors practicing in the U.S. according to an October 2015 report by the Henry J. Kaiser Family Foundation. As it stands today, the average doctor is 52 years old. Approximately 1 in 4 actively licensed physicians (23.6 percent) is between 50 and 59 years and 1 in 5 (20.0 percent) are between 60 and 69 years old. Nearly 11 percent of doctors 70 years and older still practice. Altogether, the majority of doctors are at or approaching retirement age.

Unlike with pilots who risk lives every day in their jobs, there is no official age requirement for physicians to retire. The American Medical Association is developing competency criteria to guide senior physicians as they approach retirement. Still, the number of doctors leaving medicine is far exceeding the number coming into the profession.

How Many Doctors Are Training?

The number of medical schools has increased over the years but this does little to bolster the number of doctors in practice.

This is because medical school graduates are not qualified to practice medicine. These graduates first need to complete residency training in their area of specialty, whether in primary care or a sub-specialty. Residencies can last from three to seven years depending on the specialty.

In 2015, 41,344 medical school graduates competed for 30,212 accredited residency positions.

 This leaves more than 11,000 graduates untrained and unavailable to treat patients this year alone. More residency training positions are needed to start adding new doctors into the system.

Medicare's Role in the Doctor Shortage

The Balanced Budget Act of 1997 capped Medicare’s funding to U.S. graduate medical education (GME), the largest source of funding for medical residency programs. States may contribute to GME positions as well but do so to a lesser degree. Money is needed for training costs, including resident salaries, liability insurance coverage and payment to teaching hospitals for supervision. Despite lobbying by the American Medical Association, Medicare has failed to increase funding to these programs.

Solutions to the Doctor Shortage

Missouri, Arkansas, and Kansas took a bold step by allowing medical graduates to practice right out of school without proceeding to residency training as long as they were supervised by a physician. The American Medical Association opposes these measures. The level of experience of these graduates is low without the extended training of a residency program. Patient safety needs to be considered.

More medical schools are helpful only if more residency positions are made available to the students who graduate.

Otherwise, these students are left in limbo with significant school debt and no job. The healthcare system needs to address the issue of medical training and open up bottle necks. Medicare, one of the biggest utilizers of health care in the United States, needs to contribute more if there are to be enough doctors to treat an aging baby boomer population.


Association of American Medical Colleges. Physician Supply and Demand Through 2025: Key Findings. Accessed January 1, 2016.

The American Medical Association. Competency and retirement: Evaluating the senior physician. Published June 23, 2015.

Henry J. Kaiser Family Foundation. Total Professionally Active Physicians. Updated October 2015.

The National Residency Matching Program. Press Release: 2015 Residency Match Largest On Record With More Than 41,000 Applicants Vying For Over 30,000 Residency Positions In 4,756 Programs. Accessed January 2016.

Young, A; Chaudhry, HJ; Pei, X et al. A Census of Actively Licensed Physicians in the United States, 2014. Journal of Medical Regulation. 101(2): 8-23.

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