Fix the rural physician shortage by expanding support for resident training

As the deans of the two public medical schools in Nevada, we are watching with pride as our recent graduates prepare to start their internships.

But that pride is tempered by concern about a looming threat to the delivery of medical care in our state.

According to data compiled by the Association of American Medical Colleges, the U.S. will see a shortage of 37,800 to 124,000 physicians across all specialties and subspecialties in the next decade that will impact nearly every American. But the shortage is already and disproportionately affecting those living in less physician-dense rural states like ours because of the structure of graduate medical education (GME) funding.

The Centers for Medicare and Medicaid Services recognizes the need to support the training of new physicians and that interns, residents, and fellows have historically carried the burden of caring for older patients in underserved areas. As a consequence, CMS funds the majority of GME through direct and indirect medical education payments while the Veteran’s Administration, the Health Resources and Services Administration, and teaching hospitals themselves fund a smaller part. Both types of CMS funding are paid to teaching hospitals based on complex formulae that use variables such as the percentage of hospitalized Medicare patients. The funding covers both the salary and benefits of trainees in addition to indirect overhead. For instance, many teaching hospitals treat sicker and often vulnerable underinsured patients whose care requires a more costly mix of staff, longer lengths of stay, and more expensive and complex interventions.

CMS spends over $16.2 billion per year on GME, but in 1997, as part of a balanced budget act, Congress effectively froze the number of funded positions for hospitals involved in resident education. That changed only recently, when the Consolidated Appropriations Act of 2021 created 200 new slots per year for five years. In a positive step forward, in distributing these positions CMS prioritized hospitals with training programs in geographic areas demonstrating the greatest need for physicians.

But even those new slots are not enough. As a result of the 1997 freeze, according to the U.S. Government Accountability Office, more than 70% of teaching hospitals are “over the cap,” meaning that the numbers of residents and fellows that teaching hospitals train is larger than the number for whom they are reimbursed. This, along with declining margins seen in many of the nation’s hospitals, creates undue financial burdens for these institutions — burdens that hospitals in less resourced areas simply cannot shoulder, leaving them with fewer trainees than they need to function.

Nevada ranks 45th in the U.S. for active physicians per 100,000 population, 48th for primary care physicians, and 49th for general surgeons. When broken down by medical specialty, Nevada has fewer specialists than the U.S. rate for nearly every specialty or subspecialty.

In Nevada, like many other states, addressing physician shortages is directly dependent on GME. The limited opportunities for GME in the state — in terms of both total number of funded positions and the breadth of specialty training slots available — means most of our medical school graduates are forced to leave the state to obtain postgraduate medical training. For example, Nevada is in the desert/semi-desert region of the sun belt, yet the state does not have any training programs in dermatology. The same can be said for urology and ophthalmology, specialties needed in states with a significant rural population.

Put simply, for Nevada and more rural Western states, GME is a requirement for addressing the physician workforce challenge. According to the AAMC, Nevada has 404 funded GME positions compared with more than 9,000 in California and over 16,000 in New York, an inequity due in part to the 26-year-old funding freeze, which occurred at a time when states like Nevada were much smaller in population. In fact, Nevada’s population has doubled since 1997, now reaching almost 3.3 million people. For perspective, that is a rate of one resident-physician for every 550 people in New York, compared with one resident-physician for every 7,673 people in Nevada based on 2020 U.S. Census figures. It therefore comes as no surprise that Nevada’s rate of 225 physicians per 100,000 population is markedly below the national rate of 301.

While many people have suggested addressing the physician shortage by increasing medical school class size, we think that it would be more valuable to fund and expand GME positions based on physicians per capita and/or other measures of access, favoring states with significant rural populations. Although a recently introduced House bill would increase CMS funding by up to 14,000 new residency positions nationwide, we aren’t terribly optimistic that it will happen; previous congressional efforts to increase funding at this level of magnitude have failed.

But there are other creative funding mechanisms, including state support for GME and loan repayment programs in return for physician practice in underserved areas. We have been advocating for increased state engagement during Nevada’s current legislative biennium, but direct federal engagement in GME funding, essentially “unfreezing the freeze,” is a must-have.

Americans deserve excellent care, regardless of the state in which they live. While delivery of care can be aided by the growing numbers of physician assistants and advanced practice nurses, the need for medical doctors remains acute. We should expect and must ensure equitable access to specialty and subspecialty care, the availability of timely appointments, and medical treatment that is high in quality and considerate of cost. GME is not just about medical education — it’s also about access to medical care.

Marc J. Kahn, M.D., MBA, is the dean of the Kirk Kerkorian School of Medicine and vice president for health affairs at the University of Nevada, Las Vegas. Paul J. Hauptman, M.D., is the dean of the University of Nevada, Reno School of Medicine and chief academic officer for Renown Health.