California doesn’t have enough doctors. This year, the state met just 54% of its primary care needs. It would take 881 more physicians to eliminate all the state’s designated primary care shortage areas, where more than 5.8 million Californians currently reside.
California’s leaders are trying to conjure up more physicians. In late September, Gov. Gavin Newsom signed legislation to establish a new medical school with public and private funding in Kern County, which spans Bakersfield and the southern Central Valley. The San Joaquin Valley, with just 39 primary care docs per 100,000 population, ranks just ahead of the Inland Empire, with 35 per 100,000, as areas of acute physician shortage.
Graduating more MDs is great. But it won’t be enough to narrow the Golden State’s doctor shortage. That will require creating more residency positions that turn med school graduates into practicing physicians.
After completing medical school, the next step in a doctor’s training is a residency of three to seven years, depending on the specialty.
Unfortunately, there are more medical graduates than residency slots. In 2024, the National Resident Matching Program reported that nearly 45,000 students applied for about 41,500 offered positions.
It does little good to increase the supply of medical graduates if we lack enough spots for them to finish their training.
Washington and its notorious law of unintended consequences got us into this pickle. Back in 1997, Congress passed and President Clinton signed the Balanced Budget Act, which actually did contribute to a four-year period of federal budget surpluses. One of its provisions, however, essentially froze the number of spots at federally funded medical residency programs for 25 years.
By 2021, policymakers had come to realize how big a mistake they’d made, and the Centers for Medicare and Medicaid Services announced funding for 1,000 new residency slots over five years.
That’s a start. But it’s not enough. Medical school enrollment has increased each year for the past two decades, but residencies have lagged.
California’s scarce public funds might be better spent creating more residencies rather than opening new medical schools, the payoff for which may not be seen for years.
There’s also substantial opportunity for private philanthropy.
Several donors have shown interest in building the physician workforce of the future. The founder of Home Depot, Kenneth Langone, and his wife, Elaine, donated $100 million in 2018 to the NYU Grossman School of Medicine to make tuition free for students. They followed that gift up with another $200 million in 2023.
Just this year, Bloomberg Philanthropies donated $1 billion to Johns Hopkins University to fund an endowment for free tuition for students. Ruth Gottesman gave $1 billion to Albert Einstein College of Medicine in New York to the same end.
Huge gifts like these might have an even bigger impact on the physician workforce — and access to health care — if they fund the creation of new residency programs.
Some philanthropists have already taken on that charge. Last year, the E.L Wiegand Foundation gave the University of Nevada, Reno School of Medicine $500,000 to start a pediatrics residency program. It will eventually support 12 residents. The W.P. Carey Foundation donated $25 million to New York-Presbyterian in 2023 to support its residency program.
Those making these gifts are spending down fortunes that a thriving market economy can deliver. Such charitable works can go a long way toward addressing the physician shortages that plague much of the country — and improving access to health care in the process.
Sally C. Pipes is president and CEO of Pacific Research Institute.
