Doctor Residency Programs (controlling supply)

My simple policy proposal is to get the government out of the funding of doctor residencies.


American doctors are thoroughly trained. First, the prospective doctor must earn an undergraduate degree, usually at a four year college. Then, he or she must pass a five-hour exam called MCAT, Medical College Admission Test. Then the student must enter one of 141 medical schools (147 according to  AAMC) in the USA. During school various required medical “boards” or tests are required. After medical school, newly minted MDs enter a residency program (GME, Graduate Medical Education) for three to seven years.Then the MD must obtain a state license to practice medicine. Training last from 11 to 15 years.


All of these hurtles for prospective doctors limit supply, However, this web page is about a particular  bottleneck in the system just described. Residencies are funded mostly (~90%) by a government program called Medicare. Medicare caps the number of residencies at 110,000. In 2016-2017 the number of actual US MD residencies was about 105,000. The American Medical Association warns of shortage of doctors. Here is another warning from The Hill. And another from the Wall Street Journal ($pay wall, unfortunately).

As those who know basic economics, limiting supply has the effect of raising prices. Every supply limiting aspect of the medical training system describe above is government controlled.