Running residency programs is no small feat for health systems, requiring significant financial and operational commitments. At Sutter Health, investments in Graduate Medical Education are a strategic priority — one leaders see as essential to physician recruitment and retention far into the future.
“GME is a very clear priority and strategy for that long-term workforce solution,” Lindsay Mazotti, MD, chief medical officer of medical education and science at Sutter Health, told Becker’s. “Our team has gone way upstream in terms of thinking about recruitment, not just for today, but very future focused. It’s a long-term commitment, long-term vision and a long-term strategy.”
This approach comes amid a physician shortage expected to worsen as the nation’s population ages. More than 30% of currently active physicians will reach the traditional retirement age of 65 within the next decade, according to a report from the American Association of Medical Colleges.
To address this impending gap, the Sacramento, Calif.-based health system, which operates more than 20 hospitals, has expanded its academic enterprise in recent years, adding 11 residency and fellowship programs.
Many teaching hospitals shoulder a significant share of residency program costs, as a 1997 federal cap on Medicare-funded slots has restricted growth. Healthcare groups routinely cite this cap as a key driver of the physician shortage. Without a major expansion of Medicare-supported positions, the AAMC projects a shortfall of up to 124,000 physicians by 2034, though increased investment in GME and federal funding could reduce that gap to 86,000. With federal action slow-moving, health systems such as Sutter are making these investments independently, viewing them as critical to long-term workforce stability and a way to curb future recruitment expenses by cultivating in-house talent.
“We’ve tried to think beyond just finance and look at the broader value proposition associated with training new doctors,” said Leon Clark, senior vice president and chief academic affairs officer at Sutter Health. “We realize that the doctors we’re training are in our pipeline to be hired at our system.”
Costs and financial sustainability are undoubtedly considerations in determining GME strategy and program growth. Beyond that, Mr. Clark said Sutter’s leadership team looks at the full spectrum of benefits associated with hosting residency programs, such as fostering a culture that promotes a learning environment and quality improvement.
“Evidence suggests that quality improves when residents are around,” he said. “So there’s lots of value that wouldn’t necessarily show up on the [profit and loss statement] that the organization will realize. You have to expand your thinking and not make decisions solely based on the economic output of today. You have to look longer term.”
The results of Sutter’s physician pipeline efforts are already visible. The health system has hired nearly 2,000 clinicians since 2023. Equally important, Sutter’s physician turnover rate is around 2%, lower than the national annual average of 6% to 7%, according to the AAMC.
“That creates stability, which physicians enjoy,” Mr. Clark said. “They’re not having to learn how to work alongside new people all the time. Those things really matter.”
Dr. Mazotti and Mr. Clark credited strong retention rates to a mix of strategic initiatives designed to support physicians throughout their careers and simplify workflows by reducing administrative burdens. In addition to prioritizing well-being and leadership development, the system ensures physicians have opportunities that align with their professional interests. For example, clinicians who want to continue scholarly activities do not have to leave the system to pursue academic work, as Sutter’s growing academic enterprise allows them to engage in teaching and research without giving up clinical practice.
Additionally, the system has invested in expanding rural training programs, providing residents with exposure to a range of care settings. Leaders see this as a way to shift perceptions about rural practice and encourage long-term placement in underserved areas.
“All of those things combined have enabled us to recruit the number of physicians that we have,” Mr. Clark said.
