The Residency Cap

The problem

A doctor in the United States needs two things: a medical degree, and a residency, the three to seven years of supervised hospital training without which the degree confers no licence. Medical schools are numerous and growing; between 2002 and 2024 the number of graduates rose by more than half. The residencies are the bottleneck, and the bottleneck was built on purpose. In the Balanced Budget Act of 1997, Congress, advised that the country would soon have too many physicians, capped the number of residency positions that Medicare, which funds most of them, would pay for at each hospital, at the level of 1996. The cap has been lifted twice since: by 1,000 positions in 2021, phased over five years, and by 200 in 2023. In 27 years, about 1,200 slots, for a population that grew by 70 million.

The surplus never came. The Association of American Medical Colleges projects a shortfall of up to 86,000 physicians by 2036, concentrated in primary care, psychiatry and the rural and poor urban places that cannot recruit against the cities. Meanwhile each spring's Match leaves thousands of applicants unplaced, including American graduates who carry $200,000 of debt and a degree they cannot use. The country trains people to be doctors and then declines to finish the job, while importing physicians trained abroad to fill the gap it created.

The money is not the obstacle. Medicare spends about $16 billion a year on graduate medical education, and a residency slot costs it on the order of $150,000 a year. Five thousand new slots is $750 million a year, rising to $7.5 billion at full strength. Against a health system that spends $4.5 trillion a year, that is the price of fifty thousand more doctors, and the alternative is paying $4.5 trillion with fewer.

№ 004 promised coverage to every citizen. Coverage without a doctor is a card. This proposal is the doctor.

The proposal

The Residency Cap is lifted by 5,000 Medicare-funded positions a year for ten years, allocated by a published formula to the specialties and regions with the largest projected shortfalls, with half reserved for primary care and psychiatry and a quarter for hospitals in rural and underserved areas. A parallel path licenses physicians fully trained abroad after a supervised year, as Tennessee began in 2023. Hospitals report what each slot costs and produces.

How it would work

1. Five thousand a year. New Medicare-funded residency positions, 5,000 a year for ten years, 50,000 in all, roughly a 30 percent increase on the current total. The number is set to absorb the current unmatched graduates within a few years and then to grow the pipeline toward the projected need.

1. Where the doctors are missing. Slots are allocated by a formula published in advance: half to primary care, family medicine, internal medicine, paediatrics and psychiatry, which are the specialties the shortfall projections name; a quarter to hospitals in rural areas and designated shortage areas; the remainder by application. A hospital that wants slots for a specialty already in surplus may fund them itself.

1. The trained-abroad path. A physician who completed a residency and practised abroad may be licensed after a year of supervised practice at an American hospital in a shortage area, without repeating a residency, as Tennessee's 2023 law and several states since have provided. The path is federalised through Medicare's conditions of participation so that it is uniform, and the supervised year is funded as a residency slot.

1. Paid for the seat, reported by the seat. Medicare pays the hospital per resident, as now. Under the Cap, the hospital reports, per slot, the cost, the specialty, the resident's eventual practice location, and whether the resident stayed in the shortage area. The reporting is the price of the slot; a hospital that trains 50 residents a year and sends all of them to suburban specialty practice will be visible.

1. A service option, not a service bond. A resident who practises for five years in a shortage area after training receives the education cheque of № 054 a second time, as loan repayment. The catalog's rule is to reward the road the country wants taken rather than to compel it, and a doctor who chooses the city has chosen; the one who chooses the county is paid for it.

1. The states' share. Medicaid, which also funds residencies in most states, is asked to match the federal increase at the states' ordinary matching rate, so that the states with the largest shortages have the largest incentive to build the slots.

The numbers

The cost. $150,000 a slot a year, 5,000 new slots a year: $750 million in the first year, $7.5 billion a year by the tenth and thereafter, in a Medicare programme that spends $16 billion on the same thing now.

The doctors. 50,000 additional residency positions over ten years produce, at four years' average training, on the order of 12,000 additional practising physicians a year at full strength, against a projected shortfall of 86,000 by 2036.

The unmatched. Several thousand applicants a year go unplaced in the Match; the first two years of new slots absorb most of the American graduates among them, who today are the only cohort of professionals the country trains and then forbids to work.

The trained-abroad path. There are tens of thousands of foreign-trained physicians in the United States working outside medicine because the residency requirement is the barrier; the supervised year is the cheapest source of doctors on this list.

The honest objections

"Hospitals will use new slots to train the lucrative specialties, not primary care." They have, with every expansion so far, which is why item 2 allocates by formula rather than by application and reserves half the slots for the specialties the shortfall names. A hospital that wants a dermatology residency may pay for it.

"More residents does not mean more doctors in rural Nebraska." True; a resident trained in Omaha may practise in Denver. The reserved slots for rural hospitals, the reporting in item 4 and the payment in item 5 are the levers, and the honest statement is that no lever short of compulsion sends doctors where they do not want to go. What the Cap does is stop the country from also failing to train them.

"Foreign-trained doctors licensed after one year are a risk to patients." The Tennessee path requires a completed residency abroad, a passed licensing examination, and a year of supervised practice, which is more scrutiny than most American physicians face at any point after their own residency. The risk is real and the supervision is the answer; the alternative is a county with no doctor at all.

"The shortage projections have been wrong before, in both directions." They have; the 1997 cap was built on a projection of surplus. The Cap lifts the number by a published amount for a published period, with the allocation reviewed every three years against the actual data the reporting in item 4 produces. If the shortfall proves smaller, the increase stops. The country will at least have the numbers.

"Seven billion dollars a year is a lot for training." It is one-sixth of one percent of health spending, for a workforce that determines whether the other 99.8 percent buys anything. A country that spends $4.5 trillion on care and will not spend $7 billion to have doctors to deliver it has made a strange choice, and the Cap reverses it.

Sources

• Balanced Budget Act of 1997, Pub. L. 105-33, § 4623, on the Medicare cap on resident positions; Consolidated Appropriations Act 2021 (1,000 positions) and 2023 (200 positions)
• Association of American Medical Colleges, The Complexities of Physician Supply and Demand: Projections From 2021 to 2036 (2024)
• U.S. Government Accountability Office, Physician Workforce: Caps on Medicare-Funded Graduate Medical Education at Teaching Hospitals (GAO-21-391)
• Medicare Payment Advisory Commission, graduate medical education payment data
• National Resident Matching Program, Results and Data: Main Residency Match, annual, on applicants and unmatched rates
• Tennessee Public Chapter 385 (2023), licensure of internationally trained physicians
• Proposals № 004 (CitizenCare); № 014 (The Fractional Republic); № 046 (The Talent Visa); № 054 (The Education Jubilee)