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Policy Briefing: Residency Funding


Whether you’re a first-year trying to survive the last few hours, days or weeks of school, or you’re a seasoned third-year ready to start applying for residency programs, a crucial piece of legislation was just brought to Congress and it’s time to talk about it. As you may know, funding for residency programs has remained virtually stagnant since 1997. While the funding has remained consistent, enrollment in medical schools has increased nearly 23%* since 2002.  How have we accommodated the increased number of entering medical students in residency training programs?

The short answer: we’re working on it. Organizations such as the American Association of Medical Colleges (AAMC) have long petitioned Congress to consider increasing funding for residency programs to increase the number of available training seats. Just last week, a bipartisan bill called the Resident Physician Shortage Reduction Act addressing the physician shortage was introduced in Congress to add a projected 15,000 seats in graduate medical education (GME). Prior to this news, nearly 87 percent of medical school deans reported feeling worried about the availability of GME for their students, per a recent article in Bloomberg. But what’s the worry?

Residency funding is tied to Medicare: The amount of money allotted for GME, and therefore the number of seats available for applicants, is tied to the Medicare budget. How? Medicare awards reimbursements per resident at predetermined rates that can make upwards of 25 percent of the cost of training residents. Since 1997, there have been fixed payments from Medicare; thus, the number of seats afforded to residency programs nationwide for allopathic and osteopathic clinicians has remained relatively unchanged. While some of the costs are offset by different grants and programs, the growth in the number of residency seats has not been able to match the growth in the number of medical students. If Medicare funding does not increase proportionally to the students entering the Match each year, there will inevitably be individuals seeking GME who remain unmatched. This makes it even more challenging to address the projected physician shortage.

What the bill entails: The Resident Physician Shortage Reduction Act of 2015 proposes that the Department of Health and Human Services (HHS) consider a variety of factors in determining which hospitals and programs will receive additional training positions:

  • Programs with new medical schools or in states with new medical schools
  • Any hospital who in excess of its allotted residency seats
  • Any Veterans Administration-associated programs
  • Community based or outpatient programs
  • Hospitals receiving payment incentives due to electronic health record (EHR) use
  • Any other hospital

These criteria were designed with the goal of addressing the ever-changing patient demographics and dynamics in the United States. Notably, these criteria are also contingent upon the hospital or program using greater than 50 percent of the newly awarded seats to fill so-called “shortage” specialties. Similarly, the hospital must maintain at least the average of the previous three years’ number of residents in their programs, and must not have fewer residents in the “shortage” programs versus non-shortage programs. If these goals can be met by programs, and if additional funding becomes available, HHS can add even more seats to each eligible residency program based on the above criteria.

Because this bill was just introduced, it needs all of our help to be heard. Tweet or post on Facebook using #DocShortage to share your thoughts and give this movement momentum. Similarly, take a moment to write to your congressman or congresswoman — either on social media or through good old snail mail — letting them know just how important this cause is to you.

*A previous edition of this article falsely reported this number as 30%. 30%  is a hopeful projection by the AAMC, not the actual boost to enrollment


Doctor of Policy

Doctor of Policy is a column dedicated to exploring and challenging contemporary health policy issues, especially in the fields of behavioral health, health care access, and inclusion, all from the eyes of a public health girl in a basic sciences world.

Aishwarya Rajagopalan Aishwarya Rajagopalan (17 Posts)

Writer-in-Training, Columnist and in-Training Staff Member

Philadelphia College of Osteopathic Medicine


Aishwarya is a second year medical student at the Philadelphia College of Osteopathic Medicine. She relishes any opportunity to talk policy, social determinants of health, mental health parity and inclusion topics. Outside of school, Aishwarya enjoys yoga, green tea with lemon and copious amounts of dark chocolate.

Doctor of Policy

Doctor of Policy is a column dedicated to exploring and challenging contemporary health policy issues, especially in the fields of behavioral health, health care access, and inclusion, all from the eyes of a public health girl in a basic sciences world


  • Facts

    According to AAMC, medical school enrollment has increased by 23% not 30% as you’ve incorrectly stated.