From AAMC - Association of American Medical Colleges:

Addressing the Physician Shortage Under Reform

—By Sarah Mann

Given the likelihood that more people will enter the health care system in coming years following passage of the Affordable Care Act (ACA), it is equally likely that more doctors will be needed to treat them.

Recognizing the growing gulf between physician supply and patient demand, medical education leaders and the AAMC are working to inform Congress and other lawmakers about the best means of addressing physician shortages. One of these potential means is lifting the existing cap on Medicare-funded residency positions.

“After the passage of ACA, there is recognition that there will be real physician shortages if we don’t do more to lift the residency cap,” said AAMC Chief Advocacy Officer Atul Grover, M.D., Ph.D. “People on both sides of the aisle have realized the need to train more doctors.”

A physician shortage was already expected before ACA was signed into law in March 2010, and now that gap could worsen. According to projections released last fall by the AAMC Center for Workforce Studies, there will be a shortage of about 63,000 doctors by 2015, with greater shortages on the horizon—91,500 and 130,600 for 2020 and 2025, respectively. Earlier projections had placed the shortage at about 39,600 doctors by 2015.

Since 2008, AAMC projections have incorporated later utilization data and changing specialization patterns among new physicians, and have shown shortages across those specialties as well as in primary care.

The Balanced Budget Act of 1997 froze the number of Medicare-supported positions in hospitals at 1996 levels. Since then, the number of Medicare-funded residency slots has remained relatively stable at about 100,000 per year, despite a growing demand for medical services and increasing projections of physician shortages.

Several factors are contributing to the growing demand. On top of the 32 million Americans who will get insurance cards if the ACA is fully implemented, 15 million more will become eligible for Medicare in the coming years. Meanwhile, physician supply is projected to drop because of baby boomer retirement and other factors.

“The new AAMC projections reflect what happens with a relatively sudden increase in physician demand,” said Scott Shipman, M.D., M.P.H., senior researcher of workforce studies at AAMC. “From a projection standpoint, there is an exacerbated shortage in all areas.”

To mitigate the coming shortages, in 2006, the AAMC called for a 30 percent increase in medical school enrollment by 2015. To date, enrollment has risen 13 percent. But without a concomitant increase in Graduate Medical Education (GME) [residency-training] slots, increasing the overall physician supply in the U.S. will be impossible.

Several specialties in particular could experience shortages of 62,400 doctors by 2020, according to 2008 data from the federal Health Resources and Services Administration (HRSA). General surgery is predicted to be one of the hardest-hit specialties, with a shortage of 21,400 surgeons......"
https://www.aamc.org/newsroom/report...er_reform.html

Medicare: Graduate Medical Education

Medicare funds the vast majority of residency training in the US. This tax-based financing covers resident salaries and benefits through payments called Direct Medical Education payments. Medicare also uses taxes for Indirect Medical Education, a subsidy paid to teaching hospitals in exchange for training resident physicians. For the 2008 fiscal year these payments were $2.7 and $5.7 billion respectively. This in turn has funded the provision of physician level health care that would have otherwise cost the systems orders of magnitude more to finance. Overall funding levels have remained at the same level over the last ten years, so that the same number or fewer residents have been trained under this program.

Meanwhile, the US population continues to grow older, which has led to greater demand for physicians. At the same time the cost of medical services continue rising rapidly and many geographic areas face physician shortages, both trends suggesting the supply of physicians remains too low.

Medicare finds itself in the odd position of having assumed control of graduate medical education, currently facing major budget constraints, and as a result, freezing funding for graduate medical education, as well as for physician reimbursement rates.

This halt in funding in turn exacerbates the exact problem Medicare sought to solve in the first place: improving the availability of medical care. In response, teaching hospitals have resorted to alternative approaches to funding resident training, leading to the modest 4% total growth in residency slots from 1998–2004, despite Medicare funding having been frozen since 1996."
Medicare (United States) - Wikipedia, the free encyclopedia