For the second time in just over two months, a study is calling for steep reductions in both the number of physician residency slots and in federal funding of graduate medical education.
The new study, conducted by the Institute of Medicine, said foreign medical school graduates and federal subsidies to hospitals for training them are contributing to an oversupply of physicians.
The Institute of Medicine is a national advisory group affiliated with the National Academy of Sciences. Its report, released last week, called for a freeze on class size in medical schools and a moratorium on opening new medical schools. A study issued late last year by the Pew Health Professions Commission called for a reduction in medical residency positions through closure of medical schools.
According to the new study, the best way to hold down the number of residencies is to limit government funding of graduate medical education to the total number of U.S. medical school graduates each year.
"With no cap on the number of residency positions funded, there is an incentive for cash-strapped hospitals to increase residency positions in order to bring in more federal funds," the study said.
The Congressional Budget Office estimates that Medicare will spend about $6 billion in 1996 on graduate medical education payments.
Currently, some 25,000 medical school graduates are entering their first year of residency, about 40% more than the number of U.S. medical school graduates. The remaining residency slots are filled by foreign medical school graduates. The ranks of those graduates in residencies or fellowship training in the United States swelled by 80% to 22,700 from 1988 to 1993, the report said. Many have remained in the country and set up practices.
The number of doctors practicing in the United States rose to 627,700 in 1992 from 308,500 in 1970. The ratio of physicians was 248 per 100,000 Americans in 1992, up 62% from 159 doctors per 100,000 in 1970, according to the Pew Health Professions Commission.
The study found that increases in the number of physicians do not translate into improvements in quality or access to care but instead fuel healthcare cost increases.
The Institute of Medicine commission members acknowledged that by reducing the number of residencies, some hospitals, primarily those in rural areas or inner cities, would suffer.
To support those hospitals, the study calls on state and federal governments to "take immediate steps to develop a mechanism for replacement funding for (hospitals dependent on medical residents) that provide major amounts of care to the poor."
Robert Dickler, senior vice president of healthcare affairs at the American Association of Medical Colleges, said the AAMC supported many of the recommendations of the commission, including reducing the number of residency slots and supporting hospitals that would be adversely affected by the cuts through replacement funding.