Medical Schools Need to Open the Gates

America’s medical schools do not train enough doctors, creating a growing shortage of quality physicians. This shortage is widely recognized and lamented, but the cause of the problem is often misdiagnosed. Observers from all ends of the political spectrum blame Congress, which “capped” subsidies for medical residencies in 1997. In reality, there are simply not enough U.S. medical school graduates.  

Medical schools, not residencies, are the real bottleneck restricting the supply of quality physicians. After completing medical school, doctors are hired as residents, typically by hospitals, to complete the training that states require for licensure. But there have always been more residency positions in the U.S. than medical school graduates, and residency positions have expanded much more rapidly than medical school graduates.

In 1984, there were 18,457 residency positions for 14,741 seniors in MD-granting schools in the U.S. and another 206 in osteopathic schools, a ratio of 1.23. By 1997, when Congress froze the subsidy for medical residencies, there were 20,209 residency positions for 15,404 U.S. medical graduates, a ratio of 1.31. In 2026, there were 41,126 residency positions available, which was 1.40 times as many as the 29,437 graduates from U.S. medical schools applying for them. 

Residency spots have more than doubled since 1997. Medical school graduates have not kept up. 

How have residency programs expanded so dramatically even after Congress stopped paying for new residency positions? The simple answer is that hospitals typically make money on having residents. As a House Judiciary Committee report recently described it, “Residents often work 80 hours or more a week and ‘provide most of the patient care in teaching hospitals’ while ‘allow[ing] attending physicians to manage and bill for services to more patients more efficiently.’ Research has indicated that the ‘value of the work each resident performs annually is $232,726.’” Residents are cheap labor, making “an average salary of $66,712 in 2024” that at least partially substitutes for fully licensed doctors earning an average of $374,000, according to the House report.  

Though hospitals incur costs from having to supervise and train residents, the salary savings far exceed those costs. As a result, hospitals continue to expand residency programs even though the federal subsidy has remained stagnant. 

The only reason hospitals don’t expand residency programs even faster is because they simply don’t have enough qualified medical graduates to hire. Hospitals have resorted to hiring more graduates from foreign medical schools, typically from developing countries, to fill those positions. In 1981, 9% of residents came from abroad, but that has risen to 25% in recent years.

If residency programs were to continue expanding much faster than U.S. medical school graduates, the reliance on international medical graduates (IMGs) would have to grow much larger than 25%. There are practical limits on that happening. IMGs have contributed valuable skills to the U.S. healthcare system and have helped reduce critical shortages, but there are diminishing returns on quality as the percentage of IMGs increases. When 9% of our residents came from abroad, we were cream-skimming the best and brightest, but as that rate exceeds 25%, we are dipping deeper into the foreign labor pool for doctors.

The problem of quality control for IMGs when they become more numerous in U.S. residency programs is exacerbated by the fact that there is no U.S. government oversight of the accreditation of foreign medical schools or the training they provide.  U.S. medical schools are accredited by one of two organizations that are recognized by the federal government and undergo a rigorous process to ensure that they uphold standards and quality. 

Foreign medical schools are not subject to any comparable oversight. They may be accredited by an entity in their own country, but we cannot be sure that these oversight organizations strictly enforce standards regarding classroom instruction or clinical training experiences. If there are problems with the quality of instruction for a medical school in the U.S., those problems can be brought to the accreditors and then ultimately the federal government to ensure that they are addressed. The same is not true if there is subpar instruction in foreign medical schools.

The only information we have on the quality of IMGs who apply to U.S. residencies is from their scores on required standardized exams. But no one thinks that test results are an adequate substitute for careful oversight of the kinds of skills that medical students must acquire from their clinical experiences. That oversight exists for U.S. medical students but not for IMGs. And hospitals where medical students in developing countries receive their clinical experiences do not offer the same quality training as the hospitals hosting medical students in the U.S.

There are also serious concerns about cheating on these standardized medical exams. A statistical analysis used to detect cheating found “a statistically significant level” of suspicious answer patterns among “the group of examinees who tested at centers in Jordan, Nepal, Pakistan, and India (the ‘reviewed group’), compared to the baseline group,” but the testing organization only decided to take action against Nepalese test-takers. This is a real problem because, of the 17,486 J-1 physicians in U.S. residency/fellowships in 2025, 3,852 are from India, 2,104 are from Pakistan, 751 are from Jordan, and 693 are from Nepal. In total, 42% of physicians on J-1 visas come from countries where significant patterns of cheating were detected on the medical exams required to be hired in the U.S.

If residency positions continue to expand without commensurate increases in U.S. medical school graduates, residency programs will have to hire even more IMG applicants, further exacerbating concerns about oversight and test integrity. Do we really want to substantially expand the number of foreign medical school graduates from Jordan, Lebanon, Nigeria, Egypt, and Turkey?  If you were on vacation and got sick in these countries, would you prefer to be treated locally or return to the United States for treatment?

Past research suggests IMGs who have become doctors in the U.S. perform, on average, about as well as U.S.-trained doctors. But that research only tells us about the quality of IMGs who entered the U.S. when their numbers were lower and their hiring could be more selective. We cannot extrapolate those findings to the quality of IMGs when they exceed 25% of newly hired residents. 

In addition, almost all these studies make comparisons between IMG and U.S.-trained doctors who work in the same specialty and in the same hospital. But IMGs are not randomly assigned to specialties or hospitals. They tend to be hired into residency programs in less lucrative specialties and less desirable locations, because many enter the U.S. on J-1 visas and must obtain a waiver to remain in the country after completing their training. Many of these waivers are conditioned on a commitment to working in underserved areas or with underserved populations. The U.S.-trained doctors who end up in these areas tend to have weaker qualifications. The studies compare the weakest U.S.-trained doctors to some of the best foreign-trained ones. 

Hospitals are increasing their reliance on IMGs because there simply are not enough U.S.-trained doctors to meet their needs. The only way to alleviate the doctor shortage while preserving the quality of doctors is for U.S. medical schools to increase the number of graduates. 

Higher education is one of America’s greatest exports. Over 1 million foreign students are in the U.S., mostly to receive the most advanced training in STEM fields. It seems strange that medicine would be the one exception where we lack the capacity to train enough people and must instead outsource that training to other countries.    

There is good reason to believe that U.S. medical schools can successfully increase their production of quality doctors. In an amicus brief filed in Students for Fair Admissions v. Harvard, the Association of American Medical Colleges brags: “between 2019 and 2022, more than 15% of applicants with the highest levels of both GPA and MCAT scores were nevertheless rejected by all medical schools to which they applied.” 

About one fifth of the doctors we obtain from foreign medical schools are U.S. citizens unable to gain admission to a domestic medical school. Because we have an insufficient number of spots in U.S. medical schools, these Americans were forced to go abroad, often to for-profit medical schools in the Caribbean, before being hired into medical residencies in the U.S. The quality of the training they would have received at a U.S.-based medical school is almost certainly higher, so shifting more of these Americans out of foreign medical schools would increase the quality of the physician workforce.

In addition, many would-be doctors are unable to get into a U.S. medical school, decline to go to Caribbean medical schools, and instead pursue other occupations.

Given that more than 33,000 students are admitted to U.S. medical schools each year, turning away 15% of the highest-scoring applicants means there are more than enough qualified Americans to fix the doctor shortage by expanding the number of spots. The Association of American Medical Colleges estimates a shortage of doctors by 2036 that ranges between 13,500 and 86,000, with a mid-point estimate of 49,750. Expanding the entering classes of U.S. medical schools by only 2,000 each year (assuming doctors remain in the profession for 25 years) could entirely erase the estimated doctor shortage. 

U.S. medical schools will be reluctant to expand. Like all elite educational institutions, they are inclined to view their scarcity favorably, as it gives their graduates (and themselves) higher status.  If medical schools, their donors, and policymakers are focused on the public purpose of these institutions, schools will overcome this status-seeking impulse and expand their numbers.

Medical school leaders may also worry that expansion will dilute the quality of their training, as it will become harder to find quality hospitals and clinical faculty to offer clinical experiences. There is some truth to this concern, but it ignores the question: Is the marginal clinical experience that U.S. medical schools could offer to their additional 2,000 students worse than the clinical experience available at hospitals in developing countries?

We cannot rely on doctors trained in developing countries for an adequate supply of quality physicians in the U.S.  U.S. medical schools must expand. That expansion is not constrained by a lack of residency positions. It is constrained by the unnecessarily small number of spots in U.S. medical schools.

Jay Greene is Senior Fellow at the Defense of Freedom Institute for Policy Studies.