The United States continues to warn of a worsening physician shortage. The American Academy of Medical Colleges projects a shortage of up to 86,000 physicians by 2036, and notes that current access gaps are already substantial, especially in primary care and underserved communities. If underserved populations used care at the same rate as populations with fewer barriers, the country would need as many as 202,800 additional physicians today just to meet current demand.
At the same time, the student demand is clearly there. In 2025, 54,699 people applied to U.S. MD-granting medical schools, but only 23,440 matriculated. Osteopathic medical education is also growing, with 23,114 applicants and 10,297 matriculants in 2025–26.
The financial side is equally striking. The median four-year cost of attendance for the class of 2026 was reported at $297,745 for public medical schools and $408,150 for private medical schools. In most markets, high labor demand, high student demand, and high tuition revenue would trigger expansion, and the system would absorb the demand. But American medical education does not behave like a normal market. It behaves like a tightly regulated, capacity-constrained pipeline.
That pipeline has several choke points:
- Medical school capacity. Schools cannot simply expand, they need faculty, clinical sites, simulation capacity, assessment systems, accreditation approval, student support infrastructure and enough patient-facing experiences to ensure competence. Medicine should not become a volume business where quality is diluted. But there is a difference between protecting quality and preserving scarcity.
- Residency training. A medical school graduate is not yet an independently practicing physician until completion of graduate medical education. In 2026, the National Resident Matching Program reported 53,373 registered applicants and 44,344 residency positions offered, with 38,354 applicants matching into first-year positions. No matter how many medical students we admit, the number of residency positions determines how many physicians can actually enter practice.
The Balanced Budget Act of 1997 capped Medicare-supported residency positions at teaching hospitals. Since then, Congress has added some new Medicare-supported GME positions, including expansions in 2021 and 2023, but these changes are modest compared with the projected shortage. The AAMC has supported bipartisan legislation to expand Medicare-supported residency positions by 14,000 over seven years. That scale is closer to the problem, but still should be viewed as a floor, not the entire solution.
- Outsourcing part of the physician pipeline. International medical graduates are essential to the U.S. workforce and should be valued. In the 2026 Match, IMGs filled 9,682 first-year residency positions, representing 23.6% of all matched applicants. Of those, 2,949 were U.S. citizens who graduated from medical schools outside the United States. These physicians often serve in high-need specialties and underserved communities. This pattern raises a legitimate policy question: why do so many capable U.S. students have to leave the country for medical school, then return to compete for U.S. residency training, when the physician shortage is domestic and predictable?
- Affordability. The cost of becoming a physician increasingly selects for students who can tolerate financial risk. Debt can influence specialty choice, geography, and willingness to pursue primary care, pediatrics, psychiatry, geriatrics, rural practice and other lower-compensated but socially essential fields.
The solution for this pipeline problem is not to lower standards, but rather a careful expansion of capacity to build a smarter, larger, more accountable training system.
- Expand medical school seats in a targeted way, not indiscriminately. New seats should be tied to workforce need and prioritize schools and health systems that can prove they have clinical training capacity and strong residency partnerships.
- GME expansion must become a national workforce strategy, not a periodic political patch. Medicare-supported residency caps should be modernized, and new positions should be distributed based on projected workforce gaps, not merely historical teaching hospital footprints.
- Hospitals and health systems should be incentivized to become true training platforms. Many systems complain about physician shortages while underinvesting in training. If a health system benefits from the physician labor market, it should participate in producing that workforce. Public funding could be matched with institutional investment, especially for programs that create durable physician supply in shortage regions.
- Medical education financing should not continue being a barrier for entry. Tuition should not continue rising without accountability. States, health systems and federal programs should expand conditional scholarships, loan repayment and tuition support for students who commit to shortage specialties or an `underserved practice.
- Admissions should be reconnected to workforce mission. Medical schools should still select for merits, but the process has become an expensive arms race of MCAT preparation, shadowing, research, volunteering, consulting, and repeated applications. We should ask whether the current process is selecting the best future physicians or simply the applicants best able to navigate a complex admissions economy.
We need to be honest about the contradiction, by simultaneously saying there is a physician shortage, reject large numbers of qualified applicants, charge extraordinary tuition to those admitted, constrain residency growth and then rely on international pathways to fill the gaps. We need to address this system design problem. High demand on both the market side and the student side should match the willingness to align medical education capacity with the healthcare workforce reality we already know is coming.
Abdallah Dalabih, MD, is chief medical officer for Corpus Christi, Texas-based Driscoll Children’s Health System.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
