Tom Church
584 Vetoes
What Explains the Doctor Shortage in America?
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What Explains the Doctor Shortage in America?

Ep 5 - How Medicare’s GME payments artificially capped the number of new doctors

Howdy folks. Today we’re talking with Lawson Mansell of the Niskanen Center about why we don’t have more physicians in America and answering listener feedback about subsidizing drug innovation.

Lawson is the author of Healthcare Abundance: An Agenda to Strengthen Healthcare Supply, a recent report detailing worthy changes to the often-neglected supply side of America’s healthcare system.

Lawson walks us through Medicare’s Graduate Medical Education (GME) cap, established in 1997, which limits the number of residency positions that Medicare funds at teaching hospitals. Aside from a recent increase in 2021 of 1,000 new slots, the number of Medicare-funded residency slots has been frozen at 1996 levels for decades.

Doctors in America are required to complete an accredited residency program in order to obtain a medical license. A shortage of residency slots means even qualified medical school graduates cannot complete their required residency training without an available position.

We discuss the legislative history of how the system developed, what is keeping it in place, and what kind of reforms might be able to increase the number of physicians in America without breaking the budget.

What’s in the Episode

[0:23] - Introducing our guest Lawson Mansell, health policy analyst at the Niskanen Center and author of Healthcare Abundance: An Agenda to Strengthen Healthcare Supply.

[1:10] - An overview of Lawson’s report on improving the supply of healthcare in America

[3:32] - Why aren’t there more physician-owned hospitals?

[6:37] - What is standing in the way of America creating more physicians?

[8:19] - The importance of residency programs on the limit of new physicians

[10:09] - What it takes to become a doctor in the United States

[11:30] - How the system has changed since the 1970s

[12:19] - How the government determines how much to pay for the residency system

[13:38] - Why did the government believe in the 1980s that we were going to have too many doctors?

[16:20] - A discussion of the cap on the number of residency slots that Medicare pays for

[19:00] - Do we solve the problem by just increasing Medicare funding for residency slots?

[21:00] - The residency payment mechanism, determined by DME and IME payments, should probably be re-evaluated

[23:18] - Details about the policy proposal to change the residency funding into a uniform per-resident amount

[27:33] - Discussing international medical graduates

[34:50] - Overcoming resistance by interest groups

[37:07] - Listener feedback inspired by Episode 1: If negotiating prescription drug prices downward negatively affects innovation, shouldn’t we be paying much more for prescription drugs? Where is the line?

[42:49] - Veto of the week: “An act for the promotion of anatomical sciences and to prevent the desecration of graves.

[44:38] - Send us your feedback or policy questions by emailing feedback@584vetoes.com or finding me on Twitter @TomVChurch

Relevant Sources and Numbers from the Episode

Discussion about this podcast

Tom Church
584 Vetoes
A public policy podcast about taxes, spending, and regulation hosted by Tom Church and Danny Heil
Send us questions at feedback@584vetoes.com