GME Spending Cap is Finally Lifted - Will This End The Physician Shortage?

Those with long memories will recall that at the beginning of the 1990s it was widely believed that the United States was facing a surplus of up to 200,000 physicians. Based on that supposition, in 1997 Congress imposed a cap on how much the federal government spends on funding physician graduate medical education (GME). Due to the cap, the number of available positions at the nation’s residency programs has increased only gradually and has not kept up with population growth or aging.

Thanks in large part to the efforts of the late physician supply expert Richard “Buz” Cooper, M.D., the notion of a physician surplus was debunked, and the consensus for years among policy makers, academics and others is that the U.S. now faces a physician shortage. In a June, 2020 report, the Association of American Medical Colleges (AAMC) projected a shortage of up to 139,000 physicians by 2033.

Many bills have been submitted to Congress calling for the removal of the cap, and Congress finally acted by adding GME funding to last year’s massive Covid-19 relief package. Congress authorized Medicare to support 1,000 new residency slots. Priority will be given to training programs in rural areas, hospitals that are training residents over their caps, states with new medical schools, and facilities that provide care for underserved communities. This is a good start, but far short of the 15,000 new positions the AAMC has been calling for.

In fact, the new slots will only ameliorate the physician shortage if they are greatly expanded. One reason for this is the impact of Covid-19. The virus is likely to increase patient acuity, both directly for those patients who acquired it and indirectly for those patients who postponed needed care as a result of the virus. More physician time will be needed to treat these patients, which will inhibit overall physician FTEs.

The pandemic is likely to further affect physician supply by driving some physicians from the workforce. Physician burnout was wide-spread before Covid-19. In the 2018 Survey of America’s Physicians that AMN Healthcare conducted on behalf of The Physicians Foundation, 40% of physicians indicated they often experience feelings of professional burnout. In the August, 2020 version of this survey, conducted well after the spread of the virus, 58% of physicians said they often experience feelings of professional burnout.

Twenty percent of physicians said they plan to seek a new practice, opt out of patient care, or work locum tenens as a result of the coronavirus. Thirty-seven percent said they would like to retire in the next year.

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The prospect of widespread physician retirements – the so-called “physician retirement cliff” – is particularly troubling given the aging of the physician workforce. Many specialists, in particular, are reaching retirement age (see chart below).

The action Congress took to increase GME slots was certainly welcome, but more needs to be done to ensure we have enough physicians to meet the healthcare challenges that lie ahead.

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