Earlier this month, fourth-year medical students around the country learned news that will shape the rest of their careers. Match Day, as it’s known, is when aspiring physicians learn where they will complete their training in residency.
Last year, about 53,000 applicants vied for roughly 44,000 residency positions. Some of those who failed to match in this first round will find a spot through a supplemental round. But still, thousands of medical students will find themselves locked out of residency.
That’s a strange outcome for a country facing a growing doctor shortage. According to the Association of American Medical Colleges, the United States could be short as many as 86,000 physicians by 2036.
The bottleneck is not medical school. It’s residency.
The shortage of residency slots is in part the result of federal policy. The Balanced Budget Act of 1997 capped the number of Medicare-funded residency positions, and Congress has only modestly increased that cap twice in nearly three decades.
Fortunately, this is a problem the private sector can help solve.
Hospitals, health systems, and philanthropists should invest directly in expanding residency programs — particularly in underserved areas. Nearly 43 million Americans live in rural areas with primary care shortages.
Creating residency programs in those areas is one of the most effective ways to address that gap. Physicians tend to practice where they train. One study found that doctors who spent more than half their residency in rural areas were far more likely to stay there long-term.
Expanding residency slots also delivers faster results than building new medical schools.
Walmart heiress Alice L. Walton recently opened an eponymous medical school in Bentonville, Arkansas. Just last year, the Robert Wood Johnson Foundation provided a $1.75 million grant to establish a new medical school at Morgan State University in Baltimore.
Those are worthy efforts. But they’ll take years to pay off. Residents are licensed physicians who begin treating patients on day one. Funding the creation of more residencies could immediately expand the supply of care.
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If philanthropists and health systems are serious about addressing the physician shortage, they should focus less on producing more medical students and more on ensuring those already trained can complete their education.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy—and How to Keep It (Encounter 2025). Follow her on X @sallypipes.
