Perhaps you’ve noticed their full-page ads in your local newspaper. In late 2012, a new series began showing an anesthetized woman laid out on an operating table. The stark headline reads “BE CAREFUL WHAT YOU CUT.” The ad goes on to explain: “Reducing the deficit is essential. But at a time when our nation faces a critical shortage of doctors, cutting federal support for doctor training will jeopardize access to care and turn back the clock on life-saving cures and medical discoveries.”

These ads are brought to you by the Association of American Medical Colleges and are part of an extensive lobbying and public relations effort. At issue are some $13 billion in government subsidies that flow each year to medical residency programs, such as the kind depicted in the long-running, popular TV series Scrubs.

Under America’s system for educating doctors, medical school graduates may not practice on their own until they have first completed a period of on-the-job training know as residency, which typically last three to five years. Such training usually occurs in so-called “teaching hospitals” or academic medical centers, which offer residency slots in various specialty areas of medicine, such as dermatology or cardiology. If you’ve ever been treated in a teaching hospital, you may well have seen the drill in which a gray-haired attending physician comes to your bedside surrounded by a group of twentysomethings whom he quizzes about the lessons of your case.

Typically, teaching hospitals and other sponsors of residency programs receive subsidies amounting to about $100,000 per year for every resident they enroll, with about half of that going to the residents themselves in the form of stipends. Add in the additional money flowing from state Medicaid programs, and the public cost of residency programs comes to about $500,000 for every physician the hospitals produce.

The AAMC and its allies are very intent that Congress not cut these subsidies, and, indeed, want them raised. Without greater subsidies, the AAMC argues, America will face a shortage of 91,500 doctors by 2020. Just in case you don’t get the intended message, a video produced by the AAMC explains that unless the feds put more money into residency programs, Obamacare will bring “insurance in name only.”

But there is a big problem with this argument. America does indeed face a looming shortage of medical professionals, but because of the way it’s spent, that $13 billion subsidy isn’t helping us fill the gap. The nation’s residency programs are producing too many of the wrong kinds of doctors in the wrong places, while not producing enough of the kinds of doctors we most need to sustain the U.S. health care system.

Specifically, the programs turn out too many specialists who go on to practice in places where such doctors are already in oversupply, and where, according to numerous studies, they often inflate health care spending by engaging in massive amounts of unnecessary surgery and other forms of over-treatment. Meanwhile, residency programs are producing a dwindling number of primary care physicians and other generalists, who are already in chronically short supply in most parts of the country and are desperately needed to implement the kind of reforms to the health care delivery system necessary to improve its quality and efficiency.

Many hospitals and other health care providers are making strides in implementing best practices in medicine. But these reforms can only go so far as long as our system of graduate medical education remains increasingly out of sync with the kind of health care workforce the country actually needs. Unless Congress faces down the demands for more subsidies coming from the AAMC and its allies, and the public starts holding them accountable for the outcomes they produce with taxpayer money, the problem will only get worse.

Overwhelmingly, the greatest shortages of doctors today are primary care physicians and other generalists. According to a recent survey sponsored by the independent congressional agency MedPAC, finding a primary care doctor is highly problematic even for Americans with good health insurance. Among fully insured Americans over the age of fifty who went looking for a primary care doctor last year, fully one out of seven report it was a “big problem.” This is double the percent who report having trouble finding a specialist. Even in affluent parts of the country, finding a primary care doctor who is still taking new patients can require as much scheming as getting your three-year-old into Montessori. In rural and poor inner-city areas, it’s often well nigh impossible. Nearly sixty million Americans—almost one out of five—live in regions or neighborhoods designated by the federal government as primary care shortage areas.

And on current course, these shortages are about to get much more acute. As the Affordable Care Act extends health insurance coverage to thirty-two million more Americans, this alone will increase the need for primary care physicians from 25,000 to an estimated 45,000 by 2020. Meanwhile, studies predict that the aging of the Baby Boom generation will leave the country short another 35,000 to 44,000 primary care doctors. Yet our current residency programs are producing about 40 percent fewer new primary care doctors than are needed even to replace those who are currently practicing as they retire or move to other areas of medicine.

Part of the problem is that, due largely to the political power of specialists, the reimbursement rates paid by Medicare and private insurance are set far higher for specialists than for primary care doctors (for more, see “What the RUC?”). But our system for training doctors is also deeply at fault, with the country’s most elite and deeply subsidized teaching hospitals being by far the worst offenders. In the tables below, we show the nation’s largest residency programs ranked according to the percentage of primary care doctors they produce. At the top of the list are the University of Nevada School of Medicine and the Bronx-Lebanon Hospital Center. Among the residency programs sponsored by these institutions, half or more of their graduates go into primary care. These institutions may not score high on the annual rankings of the most prestigious hospitals put together by the U.S. News & World Report, but they clearly deserve to be celebrated for doing more than their part to reduce the nation’s acute shortage of primary care doctors. At the bottom of the list, by contrast, are some of America’s most prestigious medical institutions. For all the federal subsidies they receive, most are barely in the business of training primary care doctors.

Data from Graham Center and George Washington University. Explore further using their online tool.

At second-to-last place, for example, is Massachusetts General Hospital, the flagship of Boston’s medical establishment. Despite receiving more than $85 million a year in taxpayer subsidies for its residency program, Mass General does an abysmal job of turning out the kinds of doctors in shortest supply. Of the 848 residents who completed training at the hospital between 2006 and 2008, only 6.49 percent went into primary care. Of all the graduates of Mass General’s residency programs, exactly none went on to practice in a federally designated rural health clinic (RHC), and only one went on to practice in a federally qualified public health clinic (FQHC), which is the kind of health care facility most needed to accommodate the tens of millions of Americans who will soon be gaining health insurance through Obamacare.

Then there is Johns Hopkins University School of Medicine. Its teaching hospital in Baltimore towers over a low-income neighborhood designated by the federal government to be suffering from a shortage of primary care doctors. Yet between 2006 and 2008, of the 1,148 residents who graduated from Hopkins’s residency programs, only 8.97 percent went into primary care. Only two graduates went on to practice in an FQHC, and not one participated the National Health Service Corps, a program designed to encourage doctors to practice in underserved areas. In 2009, Hopkins residency programs costs the taxpayers $80.7 million.

The picture among residency programs generally is not much better. Of the 759 institutions sponsoring residency programs, 158 produced no primary graduates at all. Overall, only a quarter of all residents go into primary care, and far fewer than that go to work where they are most needed. While the Affordable Care Act calls for a doubling in the capacity of public clinics and other “safety net” providers, a full 283 residency programs produce no graduates who take up that critically needed line of work.

Data from Graham Center and George Washington University. Explore further using their online tool.
As disturbing as these numbers are, however, the problems go much deeper. Almost everything about our current way of training doctors is at odds with the current needs of the health care system, and even more so with the changes required to make that system sustainable.

To begin with, while most physicians get their training almost exclusively in hospitals, most health care takes place in doctors’ offices and outpatient clinics, settings that require far different clinical, managerial, and communication skills from providers. In an average month, for every eight patients admitted to a hospital, 217 visit a doctor’s office.

More fundamentally, today’s residency programs are producing a generation of doctors whose members are typically indoctrinated by their training to resist the very changes that nearly everyone now agrees must occur in the practice of American medicine. “There is only limited recognition that the delivery system is the same as the learning system,” says Dr. Malcolm Cox, formerly dean for medical education at Harvard Medical School and now head of the Veterans Health Administration’s academic medical programs. “The delivery people and the education people are not always synchronized.”

Dr. Cox is putting it diplomatically. There has long been broad agreement among experts about the kinds of changes to the delivery system that must occur to improve its quality and contain its costs, to the point where they are now almost clichés. They include much more emphasis on prevention, patient education, and effective management of chronic conditions such as diabetes and heart disease. They also include care that is centered on patients rather than on maximizing the income and convenience of providers, and that is coordinated through careful teamwork among doctors, nurses, and other medical professionals to treat the whole patient, as opposed to isolated specialists treating just one body part at a time.

We know from the example of integrated providers like Utah’s Intermountain Healthcare that when such changes are implemented they improve patient outcomes while reducing costs by as much as 40 percent. That’s why the architects of Obamacare were able to creditably claim that it is possible to vastly expand access to health care, improve its quality, and control costs all at the same time. But that will never happen as long as America’s system for training doctors remains unreformed.

A sense of cultural and attitudinal problems fostered by most of today’s typical residency programs can be gathered from watching Scrubs. To be sure, the show takes many licenses, and its characters are often cartoonish. But many doctors recognize its essential realism, and its example helps to illustrate the kind of educational experience that young doctors typically have in today’s medical residency programs and why it must change.

On day one, newly minted MDs arrive at a real hospital that looks much like the program’s fictional Sacred Heart and are immediately thrown into a chaotic mix of ongoing acute patient care. At first these young residents often must rely on nurses to teach them how to do the most basic procedures, but as they gain confidence they soon become acculturated to viewing nurses as mere support staff rather than equal members of a team. They learn this attitude from attending physicians, who reinforce their own dominance in the hierarchy by mercilessly quizzing the residents during rounds about the symptomology and biochemistry of obscure diseases—all while talking in front of patients as if they weren’t there.

Meanwhile, a pecking order emerges as well between surgical residents and those training in “lesser” fields, with mere psychologists and social workers being particularly marginalized. Lower yet are internists and primary care doctors, and lowest of all is anyone who works in a public clinic. By the fifth season of Scrubs, when one of the show’s erstwhile idealistic young doctors finds herself forced to take a job providing health care to the homeless, both she and the residents she trained with at Sacred Heart have all absorbed values that cause them to regard this as a cosmic injustice.

Scrubs is also realistic in showing residents working some eighty hours a week in a hospital that deals almost exclusively with patients who are already very sick and often dying. In this setting, prevention is an afterthought, and there is no time or incentive for dealing with the whole circumstances of a patient’s life, as a good primary care doctor would do. In one episode of the show, a patient is advised upon discharge that he will die young if he doesn’t stop smoking, but then, as happens often in real life, the patient disappears into the wider world with no follow-up.

The show is also particularly good at illustrating how the system in which residents are training is constantly breaking down and forcing them to improvise. The premise of Scrubs is echoed in its theme song: “I can’t do it all on my own, / I’m no Superman.” Young residents learn the hard way that the nature of the work demands constant collaboration and teamwork with other staff in low and high places, yet the rigid, hierarchal structure of the hospital provides few ways to pull this off except by forming ad hoc alliances and sucking up to power.

The only major element of residency programs that is not dealt with in Scrubs is the fact that government money is propping up every scene. No one talks about this in the show because, as in real life, no one has to account to the public for what kind of education this money is buying. Rather, the money simply flows like an entitlement. Scrubs is quite forthright in depicting the role of money in other domains of health care, such as when it builds episodes around poor or uninsured patients being denied care. But the residents seem unaware that even as the hospital treats them like serfs, it is most likely making money on each one of them, thanks to the government subsidies that come on top of the value of their labor.

How did America’s system for training doctors come to be like this, and what can be done about it now? The story begins in the Progressive Era, when reformers made great strides in improving the quality of medical schools, with institutions like Johns Hopkins leading the way in infusing the core curriculum with scientific rigor. But by the 1920s it was already clear that universities and their medical schools were uninterested in taking responsibility for providing on-the-job training for their graduates, much as law schools to this day do not concern themselves with providing newly minted lawyers with apprenticeships. A few individual hospitals and medical societies stepped in by developing residency programs, but on an ad hoc basis, and with no public subsidies.

This began to change after World War II, when Omar Bradley, the storied “soldier’s general,” took over the Veterans Administration and forged a historic partnership with the nation’s medical schools. Under this partnership, medical schools were allowed to use VA hospitals as teaching facilities and to get paid for doing it. For many decades afterward, the VA was the largest sponsor of residency programs, and even now roughly a third of all practicing doctors in the U.S. have at one point or another trained in VA facilities.

The quantum leaps in federal support for graduate medical education came, however, with the passage of Medicare in 1965. Ever since, Medicare has paid graduate medical programs a direct subsidy, including the cost of the stipends residents receive. Since the mid-1980s, Medicare has also kicked in the so-called indirect medical education adjustment, an extra flow of money with which teaching hospitals can pretty much do whatever they want.

“Program directors often complain that they are hampered in achieving their educational missions,” notes a report by MedPAC calling for reform, “because hospitals do not pass through an adequate portion of their reimbursement for the conduct of programs.” Today, Medicare pays about $10 billion a year in subsidies for residency programs. Of this amount roughly a third cannot be “empirically justified,” according to MedPAC, meaning that no one can tell where the money goes, let alone whether it is being spent effectively.

This lack of accountability also has deep roots. All along, government has bent to the power of established medicine by allowing the regulation of residency programs to be left in the hands of medical societies dominated by specialists. Constant feuding among different factions eventually led to the creation of liaison groups that tried to smooth out the tensions, but power over how residency programs use government money still resides within the medical profession itself. The primary body for regulating residency programs is a private organization called the Accreditation Council for Graduate Medical Education, which in 2011 collected accreditation fees of more than $34 million from the programs it certifies. Its board comprises representatives from its membership organizations, which are the American Board of Medical Specialties, the American Hospital Association, the American Medical Association, the Association of American Medical Colleges, and the Council of Medical Specialty Societies.

For decades now, reformers have continued to cry out that this governance structure produces dysfunctional results. As early as the 1960s, the problem of overspecialization in American medicine was well established by such leading medical authorities as Dr. Kerr White, who documented the increasing fragmentation of the American health care delivery system as the number of general practitioners declined and the number of specialists grew. In 1971, Congress tried an end run around the residency programs that were churning out these specialists by creating a program that specifically funded residencies in general pediatrics, general internal medicine, and the emerging discipline of family medicine. But the funding remained minuscule, and attempts to gain any government regulation over how residency programs spent taxpayer dollars were consistently beaten back.

As an indication of just how perennial this behind-the-scenes struggle has been, in 1980 a federal advisory panel on graduate medical education was already criticizing the system for pumping out an excess supply of specialists. By 1985, none other than then Senator Dan Quayle was penning an article for the policy journal Health Affairs calling for Medicare to stop subsidizing residency programs that didn’t send at least 70 percent of their graduates into primary care. By 1989, the Institute of Medicine was weighing in, saying that graduate medical education programs were too concentrated in hospitals and were failing to provide proper training for primary care physicians. Yet despite the alliance of conservatives alarmed by the mounting cost of Medicare and reformers intent on improving the practice of American medicine, nothing changed, thanks to the entrenched powers of specialists within both academic medicine and the health care system generally.

By 1997, Congress basically threw up its hands and reached for the only politically available lever it had to reduce the growing expense of subsidizing residency programs. Unable to find the votes to hold existing programs accountable for their use of public funds, it simply froze the number of resident slots it would finance. This was a crude measure. While it held down government costs in the short run, it did nothing to arrest the growing ranks of specialists in places they weren’t needed, nor to turn around the increasing scarcity of primary care doctors and other generalists. The increasingly specialized academic medical centers that sponsor most residency programs simply reduced the number of primary care residency slots and boosted the number producing specialists. Congress’s failure to address both trends in turn deepened the mismatch between the composition of the health care workforce and the needs of the health care system, leading to inefficiency, higher costs, and, ultimately, worse health outcomes. After some sixteen years of this, you would think that we might do better, or at least that the public would wake up to the problem.


Federally Designated Primary Shortage Areas, 2013

In search of solutions, I recently traveled to Scranton, Pennsylvania, and met with Dr. Linda Thomas-Hemak and her colleagues, who have forged a new model for residency programs that points to the future.

Thomas-Hemak grew up in a small town outside of Scranton. Inspired by the example of her family’s physician (an old-fashioned doctor named Thomas Fadden Clauss who still made house calls in the snow), she made her way through medical school and then on to Harvard’s combined medicine and pediatrics residency program at Massachusetts General Hospital. She was on her way to becoming chief resident at Mass General, she says, when she was drawn back to her roots, returning to Scranton in 2000 to join her aging mentor in his local practice.

She soon discovered, however, that being a modern-day primary care doctor, especially in a medically underserved area like Scranton, left her with little time to breathe. In short order she found herself responsible for 2,600 patients. “I felt I could never get a cold or take a sick day,” she says. “I felt so far away from Harvard.” She felt frustrated, too, that so many of Scranton’s aspiring young doctors would become discouraged by the lessons they took from seeing how she and her colleagues were struggling. “At the end of the day you take bright, idealistic, and Pollyannaish students and expose them to that, what do you think will happen?”

To work on these problems, she joined a preexisting sponsor of local residency programs known as the Wright Center. From that perch she began building not only a state-of-the-art primary care delivery system based on best practices (recently recognized by the Robert Wood Johnson Foundation for its innovation); she also along the way pioneered a new form of community-based residency training. This model is not controlled by any one teaching hospital; rather, it is a consortium of many providers working in cooperation with each other to meet the full spectrum of the area’s particular heath care workforce needs, with the Wright Center serving as the umbrella group. What this means from the perspective of residents is that they receive training in the full gamut of medical practice, coming to understand its interrelationships and need for integration.

So, for example, Wright Center residents I met with described how part of their training occurred at the nearby Wilkes-Barre VA Medical Center. There they are exposed to acute care medicine, such as the hospital’s brand-new, high-tech cardiac catheterization and electrophysiology suite, and also learn about the particular needs of veterans. This arrangement serves the VA as well, explains its chief of staff, Dr. Mirza Ali, since any residency program that the facility offered on its own would leave residents without any exposure to some critical medical services, like pediatrics, that the VA doesn’t provide.

But the training Wright Center residents receive also occurs in urban clinics, such as the Scranton Primary Health Care Center, and in remote rural clinics in places like Hallstead, Pennsylvania, population 1,303. There, pediatrics, family medicine, and geriatrics are the focus, and residents are exposed to such unique problems as the respiratory diseases that particularly afflict farmers and the rural scourge of prescription narcotic and methamphetamine abuse.

Meanwhile, the program operates as a nonprofit, and as such has to report publicly how it uses any money that flows through it. This brings a level of transparency not found in graduate medical education programs run by private hospitals, as does the fact that different health care providers in the consortium now know what the others are up to. Some funding for the program also comes from an obscure but promising provision of the Affordable Care Act that is specifically designed to build so-called teaching health centers, which are not based in, or controlled by, traditional teaching hospitals or academic medical centers.

So far, despite its hardly glamorous location and its emphasis on the most poorly compensated and least prestigious forms of medical practice, the Wright Center has had no problem attracting residents. This year, it accepted only one out of every ten applicants. It selects according to grades and test scores just like any other residency program, but also looks for evidence of community-mindedness and a willingness to work in teams. “Don’t come if you’re entitled,” says Thomas-Hemak. She says that when she interviews candidates, if they are not at least as nice to the receptionist as they are to her, she knows they will not fit in.

This same philosophy is found at other hot spots of innovation in graduate medical education. Five experimental residency programs sponsored by the VA, in affiliation with local medical schools in other parts of the country, are a good example.

The VA designed these programs specifically to train the workforce it requires to staff its own highly innovative primary care clinics, which are organized into what the VA calls “patient aligned care teams.” Each team consists of a physician, nurse, pharmacist, social worker, and health technician, all of whom work in concert to coordinate not only a veteran’s immediate care but also his or her long-term health and wellness needs.

This model of primary care was pioneered by the VA and is now being imitated in a few places outside the department, where it is most often known as a “medical home.” Yet the VA has found that it can’t just take doctors who have come through traditional residency programs and expect them to thrive in this setting, so it has set up what it calls Centers of Excellence in Primary Care Education, which are residency programs housed in its primary care clinics.


Patient-centered medical education: Pharmacy student Allison Kelleher, resident Arvind Vaudevan, and Wright Center director Linda Thomas Hemak discuss care options with a patient as part of the Wright Center’s new interprofessional model of graduate medical education.

At such clinics, you’ll see a scene unlike any in Scrubs. It’s known as the “huddle.” Instead of a gaggle of terrified residents scurrying after an imperious attending physician on rounds, you’ll see informal groups coming together to tend to the needs of an individual patient. Some in the group will be doctors in residence; others will be nurse practitioners in training. Also in the huddle will be seasoned physicians and nurses, and maybe a social worker. But you’ll have a hard time telling who’s who by the way they relate to one another. The person in charge is whoever has the most to offer in a particular situation. “The goal,” says the VA’s Malcolm Cox, “is to provide an environment in which young people are comfortable, where they learn about followership, not just leadership.”

As with the Wright Center, the VA’s Centers of Excellence in Primary Care Education have been hugely successful in attracting residents. This is true even though the centers are in less-than-prestigious locations. For example, the program in working-class West Haven, Connecticut, is housed in two trailers on the VA hospital’s grounds. Residents from Yale School of Medicine across the river feed into the program, and at least some have specifically picked Yale so they can have access to what goes on in these trailers. Yale’s Web site proudly features videos with residents’ testimonials, while also boasting of Yale’s affiliation with a program that “trains future health care professionals in a team-based, patient-centered care teaching model.”

Yet while this is very encouraging, the great preponderance of Yale’s residency programs remain focused on training still more specialists—enough so that Yale ranks in the bottom twenty in its percentage of graduates going into primary care (see the “Bottom 20” Table). That’s partly a reflection of how deeply the particular culture of specialty care remains entrenched in academic medicine, and especially at our most elite institutions. It also reflects the reality that under the reimbursement rates offered by Medicare and private insurance, specialty care is far more lucrative than primary care. With the total number of subsidized residency slots capped by Congress since 1997, it’s no wonder that even the many people trying to do the right thing in academic medicine have a hard time persuading elite teaching hospitals to carve out more residency slots for primary care.

Yet the outlines of a policy fix are clear. It may well be that we will need to increase the number of slots available for training doctors in the face of worsening shortages. But Congress needs to demand that sponsoring institutions increase their production of primary care doctors and of other health care professionals of the kinds we need, or else risk losing their subsidies. It’s not that the direct cost of these subsidies is such a large amount of money; compared to the $2.8 trillion America spends on health care, $13 billion is a pittance. But failure to get medical residency programs to produce the right kind of health care workforce does incalculable damage to the quality and efficiency of the health care system, and, by extension, to the long-term health of the U.S. economy and our way of life.

Despite the long history of failed attempts at reform, there is reason for optimism, including generational change. Within today’s rising Millennial generation, there is a wellspring of idealistic young people trying to be part of the solution to America’s health care crisis by becoming team players in primary care and community-based medicine. This is true despite compounding student loans and often the prospect of forfeiting enormous potential future earning streams by not going into lucrative specialties. But the greatest obstacle of all is an incumbent system of graduate medical education that with too few exceptions crushes their idealism and teaches a hidden curriculum of counterproductive values and attitudes. At the very least, the public needs to wake up from its anesthesia and start asking hard questions about why it continues to subsidize such a system without demanding accountability.

Phillip Longman

Phillip Longman is senior editor at the Washington Monthly and policy director at the Open Markets Institute.