In 2024, the Association of American Medical Colleges (AAMC) forecast a shortage of up to 86 thousand physicians within the next 10 years [1]. Given that America is rapidly aging and will need more health services than in years past, it is an ominous forecast [2]. However, it is not as simple as a raw shortage of doctors. Structural deficiencies within the American healthcare system have led to inefficiencies in the distribution and specialization of physicians. Inadequate government policy has exacerbated these gaps. This article will examine the nature and history of America’s physician shortage as well as what reforms can fix this pressing issue. 

History

The first step to understanding the physician shortage is to understand how physicians are trained in America. All physicians must obtain a bachelor’s degree, then complete medical school, and then complete an additional three to seven years of residency training [3]. Enrollment in undergraduate and medical institutions has risen healthily for the past two decades [4]. The true bottleneck lies in residency, the final step of the process. Roughly two-thirds of residencies in America are funded by Medicare, through the federal government [5]. However, this funding stream has remained frozen for nearly 20 years. In 1997, the Balanced Budget Act capped funding for Graduate Medical Education (GME) according to existing demand and capacity as part of the Clinton administration’s budget reforms [6]. At face value, this does not seem catastrophic. After all, this did not freeze residency expansion entirely, only those funded by Medicare. Further, data from the Accreditation Council for Graduate Medical Education (ACGME) shows a roughly 70 percent increase in the number of residents since 1997 [7,8]. However, these new slots are primarily funded by hospitals themselves, using hospital revenues [9]. This has created a system in which residents need to generate sufficient revenue to make their spot economically sustainable for the hospital. This reveals the crux of the issue. Ever since GME funding was frozen, the private healthcare market has been the principal economic force shaping what type of physician is trained, and where. This has led to massive geographic shortages in poor, sparsely populated rural areas and a disproportionate amount of specialists compared to primary care physicians. This is the true nature of the physician shortage. 

The shortage of physicians in rural areas has been a consistent trend for the past few decades. A report recently released by the Commonwealth Fund found that 92 percent of all rural counties are considered primary care professional shortage areas [10]. Forty-five percent of these counties had five or fewer primary care doctors in 2023, and nearly 200 did not have a single primary care physician [11]. These shortages, although lamentable, are not surprising. Rural America has suffered in recent decades, facing population shrinkage and aging populations [12]. Moreover, the proportion of rural Americans on Medicare and Medicaid is far higher than in urban areas, and government-insured patients compensate hospitals at between 50 and 70 percent of the rate of privately insured patients [13]. The combination of these factors has made it functionally impossible for rural hospitals to expand residency slots. Without additional support from the federal government, the low population density and relative poverty of rural areas do not generate sufficient revenue for hospitals to independently fund additional residency slots. The data shows that 95 percent of hospitals funding residencies above the 1997 GME caps are in urban areas [14]. Since a major predictor of rural physicianship is training in a rural hospital, this lack of rural residency slots has led to massive shortages in rural physicians. 

Exacerbating the problem is the set of incentives that prospective physicians face. For young health professionals deciding where to set down their roots, rural areas are not a particularly attractive prospect. Although rural physicians often earn more than their urban counterparts, especially after adjusting for cost-of-living [15], there are a myriad of factors that dissuade newly trained physicians from working in rural areas. First, the majority of medical students come from the upper quintile of income and live in major urban areas [16]. These are students who have worked hard in order to enjoy the urban standard of living they had in their childhood and college years. Further, due to existing shortages, the patient load of rural physicians is significantly higher than in urban areas [17]. There are also fewer opportunities for academic research and competitive, high-paying sub-specialties compared to urban hospitals [18]. These factors explain why only 18 percent of urban medical students complete a rural residency [19]. Although the structural incentives are not in favor of rural residencies, there are programs like federal loan repayment that aim to balance the scales. Programs like the National Health Service Corps (NHSC) that offer loan repayment in exchange for service in underserved areas have seen success, with 23 percent of NHSC participants working in rural areas [20]. These residents also tend to stick around, with 84 percent of participants staying for longer than mandated by the terms of their program [21]. Programs like these have proven to work, but they have yet to reach the scale necessary to resolve the dearth of rural physicians. 

Beyond a shortage of rural physicians, there is also a lack of primary care physicians. Of the 86 thousand physician shortage projected by the AAMC, 48 thousand of those are primary care physicians [22]. This shortage can be explained by dual economic incentives. For hospitals that self-fund additional residents, revenues generated by expensive specialty procedures are essential. Primary care residents cannot generate comparable levels of revenue to their specialized counterparts, and so they are not funded to the same level. Further, from the perspective of aspiring residents, primary care is not a lucrative option. Studies have consistently shown that the annual earnings gap between specialists and primary care physicians exceeds $100 thousand [23]. Individuals reaching the stage of residency have worked hard for years to get to where they are. Many have taken on significant student loan debt and may have dependents. From a financial perspective, there are strong disincentives to choosing primary care. This lack of primary care physicians has further negative effects. A lack of primary care access means many patients are unable to receive preventative care, resulting in costly and extensive specialist procedures for preventable illnesses. Significant expansions in the number of primary care physicians would, in turn, reduce the need for expensive specialists. 

Reform

In the past few years, meaningful progress has been made towards addressing these shortages. In 2021, the Consolidated Appropriations Act finally removed the 1997 GME caps, adding one thousand new residency spots over the next five years, with spots reserved for rural and historically underserved areas [24]. Recent legislation introduced by Rep. Terri Sewell would increase the GME caps even further, with an additional two thousand spots per year for seven years [25]. This legislation, however, falls short. While the 2021 bill gave priority to rural hospitals, 95 percent of the newly added residency slots still went to hospitals in urban areas [26]. Rural hospitals often lacked the administrative capacity to apply, and those that did were less established than their urban counterparts, leaving them heavily disadvantaged [27]. Broad reforms are insufficient. They must explicitly address the incentive imbalance that has led to the shortage of rural and primary care physicians. 

There are a number of established programs that could be expanded in order to address the physician shortage. The first is the previously mentioned NHSC. While this program offers student loan repayment, it is capped at $120 thousand in return for two to three years of service [28]. While significant, many residents hold debt balances in the hundreds of thousands. This is simply not enough to meaningfully move the needle, especially since that sum is the single-year salary difference between a primary care physician and a specialist. Anything short of total loan forgiveness fails to meaningfully rebalance the incentives. 

A more comprehensive approach can be found by looking abroad. In the 1970s, Japan created Jichi Medical University, offering high school students full scholarships in exchange for 9 years of work in public medical institutions following graduation, of which 6 years had to be in a rural setting [29]. This model combines two powerful incentives into a package uniquely attractive to prospective students. First, there is the guarantee of both medical school and residency. Coming out of high school, one is essentially guaranteed a career as a physician. Second is the promise of zero debt, not just partial forgiveness. This program has proved to be enormously successful, now accounting for nearly 16 percent of all medical school entrants within the country [30]. Even more encouraging, graduates were four times more likely to be working in a rural area after completing their contractual obligation compared to other physicians. This model, in which residency slots are created not with preference for rural physicians, but solely for rural physicians, has produced results that far outstrip the programs America currently has in place. 

A supplemental option lies within expanding nurse practitioner (NP) and physician assistant (PA) programs. In a broad sense, the physician shortage is simply a lack of accessible, quality healthcare. For complex issues, a primary care physician may be needed, but for preventative visits or chronic disease management, a physician may not be necessary [31]. Additionally, the increasingly geriatric nature of the American patient pool means that more patients will require this type of care in contrast to previous decades. The barrier to entry of these fields is significantly lower, requiring less direct investment in order to fill gaps in coverage. Further, since pay is less in these fields, it would require fewer financial incentives from the government in order to lure individuals to rural or underserved areas [32, 33]. Actual physicians remain crucial, but by expanding NP and PA programs, each physician will be able to serve more patients. Correspondingly, this will reduce the raw number of physicians needed to adequately cover current underserved areas. Reform will be difficult and expensive in all permutations, but increasing the number of NPs and PAs offers an efficient, cost-effective supplement that will meaningfully reduce the magnitude of the physician shortage. 

Ultimately, however, much of the shortage stems from individual preference. Studies have consistently shown that a rural upbringing and residency training in a rural area are the strongest predictors of practicing as a rural physician [34]. Investment needs to be made in attracting students from rural areas into the medical field. Inspiration can be drawn from the Alabama Rural Health Leaders Pipeline (RHLP), a program that targeted high schoolers and college students from rural Alabama counties with the goal of developing physicians with roots in the communities they would eventually serve [35]. Participants were far more likely to choose family medicine residencies than peers, 47 percent vs. 4 percent, and practiced in rural areas at similarly higher rates, 67 percent vs. 14 percent [36]. Although small in scale, RHLP demonstrated the comparative effectiveness of recruiting students from rural backgrounds to serve as rural physicians.

At a base level, it is incredibly difficult to attract a lifelong urbanite into rural practice, regardless of compensation. In addition to the radical lifestyle change, factors such as spousal employment and child-rearing considerations pose significant barriers towards meaningful levels of physician redistribution. Instead, local programs need to be established to develop talent within rural areas and produce physicians with strong connections to the communities that they serve. 

The physician shortage in America is not as simple as is often thought. It is a nuanced issue dealing with mismatched incentive structures and inefficient allocation of resources. Expanding medical school enrollment and increasing residency slots alone will not fix the core issue at hand. There are structural deficiencies embedded deep within the healthcare system that have caused the physician shortage, and until they are resolved, change will be slow. The reforms needed to solve it are multi-faceted and complex–but they exist. Resolving the physician shortage is an important step in creating a healthier, stronger America.