The healthcare system has plenty of challenges.
First, there’s the high cost of care and the lack of insurance coverage by millions of Americans. So it’s no surprise some things need fixing, adjusting, and improving to make healthcare more accessible.
But the biggest issue in healthcare is one whose stark reality is looming on the horizon:
We’re on the brink of a shortage of physicians in several different specialties and areas of medicine.
It doesn’t matter whether you’re working in a hospital, running a private practice, or working in a fully-staffed medical center. For people that don’t work in healthcare, it may seem hard to believe that there aren’t enough physicians available to provide as much care as patients need.
But it is true.
There is a physician shortage, and many predict it’ll only worsen.
Are you ready to learn the facts about the growing physician shortage in the United States?
Let’s take a more in-depth look at the statistics.
Table of Contents
How Many Physicians Are in the U.S.?
According to data from Statista, there were approximately 1,022,000 active physicians in the U.S. as of March 2020.
The Association of American Medical Colleges (AAMC) reported 938,980 active physicians in 2019, increasing from 764,783 in 2007.
Data from the Bureau of Labor Statistics projects that 22,700 new jobs will open for physicians every year over the next decade. Yet, the AAMC predicts that by 2034, there will be a shortage of 38,800–125,100 physicians in the U.S. alone.
This data begs the question:
The total number of physicians has consistently increased over the past fifteen years.
So how is it that there’s an expected shortage over the next fifteen?
Physicians Aren’t Being Paid Nearly as Much As They Should Be
While physicians earn substantially more than the average U.S. worker, many would agree that they don’t earn nearly as much as they should. From the rising costs of medical school and insurance to the fact that physician’s salaries don’t grow as much as the rate of inflation.
We recently released our free 2023 Physician Compensation Report to help physicians determine how their salary stacks up against their peers. While there are a variety of reasons why physicians are earning less than they deserve, below are some of them.
The Increased Cost of Medical School Tuition
From 1995 to 2020, the cost of medical school tuition has increased as much as 305% for some medical school students. AAMC data indicates just how much medical school tuition has increased in the past 25 years for students in their first year of graduate training:
| AVERAGE COST PER YEAR (for first year students) | 2020 | 2015 | 2010 | 2005 | 2000 | 1995 | % increase from 1995-2020 |
| Private (resident) | $56,151 | $49,168 | $40,834 | $33,584 | $27,084 | $21,740 | 158% |
| Private (non-resident) | $57,394 | $50,548 | $42,174 | $35,014 | $28,592 | $23,171 | 147% |
| Public (resident) | $32,384 | $29,016 | $21,003 | $15,448 | $10,031 | $7,979 | 305% |
| Public (non-resident) | $54,502 | $52,464 | $41,395 | $33,632 | $23,749 | $17,881 | 204% |
As of 2021, the average medical school student spends approximately $220,000 for four years of graduate training.
Physicians Salary Increases Aren’t Growing in Accordance With Inflation
Inflation rates in the U.S. change from year to year, varying from about 1% to 3.8% over the past 25 years. And physicians’ salaries don’t always increase in accordance with those rates. This isn’t the case for every year or even for every physician in every specialty. However, when it does happen, physician earnings take a significant hit.
Anesthesiologists have experienced this several times over the past few years. Here’s how anesthesiologists have fared when comparing their earnings increases vs. the inflation rate:
Earnings vs Inflation
2019: salary +1.5% vs inflation rate +1.8%
2017: salary +1.1% vs inflation rate +2.1%
2016: salary +0.5% vs inflation rate +1.3%
Physicians in family medicine have experienced even more disparity in earnings increases vs. inflation rates.:
2018: salary increase +0.4% vs inflation rate +2.4%
2017: salary increase +0.9% vs inflation rate +2.1%
2016: salary increase +0.6% vs inflation rate +1.3%
Physician salary increases vs inflation rates have only been slightly disproportional in recent years. The further we look back, the more disproportionate the numbers become.
More Statistics
In 2008, physicians earned 1.73% less than they should have, based on the inflation rate. General surgeons in 2008 fared even worse, earning 3.2% less than they should have.
From 1995-2003, the numbers are even more disappointing. Averaging these eight years together, physicians earned 7.1% less than they should have, based on inflation. Primary care physicians in these years earned 10.2% less, and surgical specialists earned as much as 8.2% less than they should have, considering how much they earned vs how much inflation rates grew.
Rising Insurance Costs and the Pitfalls of Practicing Defensive Medicine
One of the key goals of healthcare administrators is to reduce the chances of malpractice litigation which, in turn, forces many physicians to practice defensive medicine.
Defensive medicine includes everything from performing unnecessary diagnostic tests to avoiding performing procedures that could be beneficial, yet risky, at the same time. Ordering unnecessary tests makes it easier for physicians to “rule out” medical conditions and provide a better diagnosis for their patients. But it also drives up the cost of healthcare overall and takes up more of a physician’s time.
The more time a physician spends performing tests, the less patients they can see. Physicians bill more (and earn more) when they see more patients, so this becomes problematic in more ways than one.
Defensive Medicine
Defensive medicine is also a cause for the rising costs of healthcare and health insurance. Hospital administrators and physicians estimate that as much as 34% of healthcare costs are the result of practicing defensive medicine. 75% of physicians believe that this will contribute to the physician shortage.
Physician compensation accounts for only 8% of healthcare costs. If defensive medicine didn’t take up such a huge chunk of healthcare costs, physicians could be earning more money – money that could help to account for the rising cost of inflation. 76% of physicians also believe that practicing defensive medicine actually decreases patients’ access to healthcare overall.
Defensive medicine has also caused many physicians to refrain from using new technology, new devices, and new procedures. On one hand, they could be beneficial to the patient, but on the other, they put themselves at greater risk for a lawsuit.
Physician surveys indicate that as many as 92% of physicians have made medical decisions based on their desire to avoid a lawsuit. Approximately 53% of physicians have also reported delaying the use of new techniques, devices, and treatments in an attempt to avoid a potential lawsuit.
A Lack of Funding for Post-Graduate Programs
A lack of funding for post-grad medical programs also plays a role in the growing physician shortage.
Because the vast majority of residency positions are funded by Medicare, Medicaid, and the VHA, the federal government has huge control over how many residency positions exist. Private health systems and hospitals are at liberty to add unfunded positions at their own expense, but most cannot afford to absorb those costs on their own. Therefore, they rely on government funding to support their residency training programs.
From 1997 to 2020, the number of GME residency positions in the U.S. remained virtually stagnant, but the Resident Physician Shortage Reduction Act of 2023 aims to change that.
This act, if passed, will add 14,000 residency positions over the next seven years.
But is that even enough?
Relevant Research
A study from the University of California Health estimates that in order to account for the predicted physician shortage through the year 2030, we need to add at least 3,000 additional federally funded residency positions every year for the next five years, at the minimum.
That would mean adding 15,000 positions in five years, as opposed to 14,000 in seven years. And without additional funding from Congress, that isn’t likely to happen.
Add to that the unprecedented levels of burnout that physicians have been facing since the onset of the COVID-19 pandemic, and the physician shortage could be even greater if Congress does not act.
More Reasons Why we Have a Physician Shortage
Several other factors are contributing to the projected physician shortage in the U.S.
Here are a few additional reasons the physician supply cannot keep up with the physician demand:
U.S Population Growth
According to the 2020 U.S. Census Bureau, the nation’s population was 331,449,281 as of April 2020. This number reflects an increase of 7.4% since the last census in 2010. It also marks a 17.7% increase since 2000, when the population totaled just over 281 million.
As the U.S. population grows, so does the need for more primary care physicians and those that can provide specialty medical care.
Part of the reason for the growth is that we have an increasingly aging population. In fact, experts predict the number of adults over the age of 65 will increase 42% through 2034.
Physician Burnout
Our physicians are aging as well. Within the next ten years, approximately 40% of all physicians will be age 65 or older.
Physician burnout also contributes to the projected physician shortage.
Burnout is a critical factor in why many physicians choose to retire before the traditional retirement age of 65. Thus, the younger they are at retirement age, the more significant the shortage will be over time.
Underserved Populations & Areas
There continue to be issues with access to healthcare for those in underserved areas. The U.S. also has marginalized populations. That includes those without health insurance and living in rural areas with limited health care services.
This point only reinforces the ongoing shortage of physicians in the U.S. today and in the future.
Imagine if these populations had the same access to healthcare as insured people in more populated areas. There would be a need for an extra 180,000 physicians right now.
Which Physicians Are in Greatest Demand?
Specialty also plays a significant role in how experts calculate the projected shortages. The most crucial shortages in the physician workforce are in primary care.
The shortage of primary care physicians, which includes family medicine practitioners, general pediatric physicians, and geriatric medicine physicians, will likely be 17,800–48,000 by 2034.
There is also less of a shortfall in physicians working in non-primary medical specialties.
There is somewhat less of a shortfall in physicians working in non-primary medical specialties, yet major shortages do exist in a few key specialty areas.
Predicted Shortages By Specialty
By 2034, there will be a shortage of 15,800–30,200 surgeons and 14,100–49,000 physicians in all other medical specialties, including:
- Anesthesiology
- Cardiology
- Oncology
- Pulmonology
- Neurology
- Emergency medicine
Pre-COVID-19 Physician Shortages
It’s still unknown whether the COVID-19 pandemic will cause even greater physician shortages going forward.
But these are the top ten specialties that were facing the biggest shortages pre-pandemic, according to a 2019 study by Doximity:
- Family medicine
- Internal medicine
- Emergency medicine
- Psychiatry
- Obstetrics & Gynecology
- Neurology
- Radiology
- Anesthesiology
- Pediatrics
- Cardiology
Learn more about which of these specialties earn the highest salaries and are in highest demand in our 2023 Physician Compensation Report.
How Many Physicians Are in Residency?
Do you know the best way to assess how the physician shortage will shrink or grow over the next decade?
The answer is looking at the number of graduate medical students enrolled in residency programs today.
The AAMC 2020 Report on Residents indicates 139,848 active residents in residency training programs in 2020. For reference, there were 134,951 residents in 2019 and 129,291 in 2018.
Between 2019 and 2020, there was an increase of 3.6%.
Yet, some areas of medicine saw much more significant gains, while others observed little to no growth at all.
Specialties With the Greatest Increases
Some of the specialties with the greatest increases include:
- Urology: +23.8%
- Pain medicine: +14.1%
- Child neurology: +11.3%
- Nuclear medicine: +8.8%
- Colon and rectal surgery: +7.9%
Specialties With a Declining or Low Growth
Some of the specialties that decreased or saw less than 3% growth include:
- Radiology (diagnostic): -1.3%
- General surgery: +0.4%
- Pathology: +0.8%
- Ophthalmology: +0.9%
- Pediatrics: +1.2%
- Dermatology: +1.6%
- Obstetrics and gynecology: +1.9%
- Otolaryngology: +2%
- Anesthesiology: +2.6%
Medical Graduate Demographics (Gender & Type)
You might be wondering: who exactly are these residents?
The breakdown by gender and type of medical graduate is as follows:
- Male MD graduates: 32.8%
- Female MD graduates: 28.5%
- Male IMGs: 12.7%
- Female IMGs: 10.3%
- Male DO graduates: 8.8%
- Female DO graduates: 7.0%
Areas of Medicine With the Most Residents
The following areas of medicine have the highest numbers of current residents:
- Internal medicine: 27,512
- Family medicine: 13,128
- General Surgery: 9,214
- Pediatrics: 8,987
- Emergency medicine: 8,029
- Psychiatry: 6,248
- Anesthesiology: 6,220
- Obstetrics and Gynecology: 5,486
- Radiology (diagnostic): 4,312
- Orthopedic surgery: 4,214
Areas of Medicine With the Least Residents
These specialties have the lowest number of active residents:
- Osteopathic neuromusculoskeletal medicine: 49
- Medical genetics and genomics: 62
- Nuclear medicine: 74
- Colon and rectal surgery: 95
- Plastic surgery: 204
- Thoracic surgery (integrated): 223
- Thoracic surgery: 234
- Preventative medicine: 288
- Allergy and immunology: 308
- Vascular surgery (integrated): 336
Interventional radiology (integrated) is one of the smaller specialty care residency programs. But with only 391 active residents, it saw the highest percentage increase, with an 81.6% increase from 2019.
With the least number of residents, osteopathic neuromusculoskeletal medicine saw the second-biggest increase over 2019 — 53.1%.
How the Resident Physician Shortage Reduction Act Aims To Help
Part of the reason there are more active residents now than in 2019 or 2018 is the Resident Physician Shortage Reduction Act of 2019.
This bipartisan congressional bill increased the number of residency positions available. This was specifically for medical school graduates in specialties facing workforce shortages. The 2019 bill increases the number of Medicare-funded residency slots by 3,000 positions annually from 2021 to 2025.
The Senate also introduced the Resident Physician Shortage Reduction Act of 2021 in March 2021. This bill provides an increase of 2,000 resident positions per year through 2029.
As more positions become available, we expect to see an increase in residents.
How Many Medical Students Are Enrolled in Medical School?
The number of physicians in residency positions reflects the number of students enrolled in medical school.
Shrinking the doctor shortage begins by enrolling more students in medical programs. It also means encouraging a large enough crop of young people to pursue a career in medicine.
Here are the current facts and figures surrounding medical school enrollment:
As of October 31, 2020, there were a total of 94,243 students enrolled in medical school. Of those, 51.5% were women, and 48.5% were men. The enrollment of women has steadily increased since 2010, while male enrollment has slowly decreased.
Only 86,951 med school students enrolled in 2015, 78,740 enrolled in 2010, and 69,718 enrolled in 2002. Enrollment has increased every year, with an impressive 35.2% enrollment increase since 2002.
Since 2002, the number of medical school applicants has increased relatively steadily as well. There were only 33,623 applicants in 2002. Meanwhile, 2020 saw some of the highest applicants ever with a total of 53,030 applicants, a 57.7% increase over the 2002 data.
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How and Where Are Actively Licensed Physicians Working?
Where exactly do the more than one million actively licensed physicians in the United States work?
Some work in private practice, while others work in group practices. Many are employees, and others work locum tenens as independent contractors.
How Many Physicians Work in Private Practice?
According to the AMA 2020 Physician Benchmark Survey, 44% of active physicians own their own practice, with 14% of those working in a solo practice.
This number has decreased steadily since 2012, as more and more physicians choose to work as employees rather than start a practice.
Working in private practice allows physicians freedom and the ability to focus more on patient care. In addition, these physicians no longer have to deal with the administrative constraints.
Self-employed physicians earn more, too, with an average salary of $352k per year, versus employed physicians ($300k per year).
54.3% of physicians aged 55 and older have practice ownership, either in a solo or group practice, while only 25.5% of physicians under 40 have ownership. The younger the physician, the more likely they are to work as an employee.
How Many Physicians Work in Group Practices?
Approximately 30% of physicians are owners in a group practice.
Of all the group practices in the U.S., 42.6% of them are single-specialty practices and have physician-owners and physician-employees.
26.2% are multi-group specialty practices with both physician-owners and physician-employees on staff.
Of course, physicians not prepared to open their own practice often seize the opportunity to buy in as a partner in a practice that already exists.
How Many Physicians Work As Employees?
50.2% of physicians in the U.S. work as employees in either group practices or as direct employees of hospitals and healthcare networks.
5.8% of all physicians are independent contractors. This figure represents traveling physicians and those who work temporary locum tenens assignments.
Yet, where these doctors work is contributing to the overall physician shortage across the U.S.
States Predicted To Have the Greatest Physician Shortage
Data from the BLS and Census Bureau projects that by 2030, the states with the greatest shortage of physicians will be:
- Washington
- Georgia
- Kentucky
- Wyoming
- North Carolina
- South Carolina
- West Virginia
- Alabama
- Texas
- Hawaii
States Expected To Have the Greatest Physician Surplus
The only states with a projected surplus of physicians by 2030 are:
- Massachusetts
- Vermont
- New York
- Rhode Island
- Connecticut
- Delaware
- Maryland
- Nebraska
- Ohio
- Maine
- New Hampshire
- New Jersey
- Michigan
If you’re considering opening your own practice, read our guide on How to Start a Medical Practice.
How Many Healthcare Administrators Are in the U.S.?
The need for physicians and clinicians is increasing steadily. But the number of people in the healthcare workforce has increased substantially over the past few decades.
The Harvard Business Review analyzed data from the Bureau of Labor Statistics. It found that the healthcare workforce grew 75% between 1990 and 2012.
But it wasn’t from hiring physicians, nurse practitioners, physician assistants, or other healthcare providers.
From 1990 to 2012, 95% of new hires in health care services were administrators.
Data shows that in the years from 1970 to 2009, the number of healthcare administrators grew by more than 3000%.
Current studies reveal that the number of physicians has increased approximately 18% over the past seven years. Enrollment in medical schools is also up about 35% in the past twenty years.
With these industry trends, we now have a ratio of one physician per every 16 healthcare workers.
Along with the rise in administrators comes a consistent increase in healthcare costs. This scenario creates a lose-lose situation for both the physicians who provide care and the patients that need it.
Conclusion
The projected physician shortages directly result from supply and demand. And there is a growing need for more physicians in primary care, specialty care, and public health.
The increase in the number of residents and applicants to medical school is promising, but will it be enough?
Only time will tell.
Knowing the current healthcare environment in the United States is crucial to empowering physicians in earning a fair wage, no matter where you are in your career. Let us help you negotiate the compensation you deserve, contact us regarding your employment contract and whether it is on par with other physicians in your specialty and region.
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