Executive Summary: The physician shortage varies by specialty and geography. Recruitment and benefits like loan repayment can change where existing physicians practice. Residency expansion can add training capacity and produce future physicians. Sponsors should define the shortage they want to address, choose the intervention that matches the time horizon, and measure physician supply/access changes.
Start with the projected supply gap
HRSA projects an overall shortage of 141,160 physician FTEs in 2038. Its model projects shortages in 30 of 35 physician specialties. [1]
The model also projects a larger deficit in nonmetro areas than in metro areas. [1]
National figures provide context. A sponsor should still define the target specialty and geography before choosing an intervention. Local/regional context matter.
Medical school growth does not replace residency capacity
Medical school graduates still need postgraduate training before independent practice. Medical school applications and matriculants are in fact at the highest they have been in history according to AAMC data.
Graduate medical education remains the central capacity constraint in the physician pipeline. The 2026 Main Residency Match offered only 44,344 positions, including 41,126 PGY-1 positions. [2]
Federal policy has also added targeted Medicare-supported residency capacity. CMS awarded 200 Section 126 Round 4 slots and 200 Section 4122 slots for fiscal year 2026. [3] These CMS expansions are helpful but still nowhere near the expansion required to support an aging population with higher and more complex care needs. Medical school growth also does not directly translate into growth across all specialties. While some specialties are filled and others are not. Specialist wait times continue to rise. Advanced Practice Providers and artificial intelligence can help but do not catch all solutions.
Recruitment changes location, not national supply
Recruitment is necessary for hospitals with current vacancies. It moves an available physician into a role.
This approach can solve an institutional shortage. However, it does not create an additional trained physician for the country.
Loan repayment can influence practice location
Loan repayment can attract or retain physicians in defined communities. It can be powerful when the program attaches service obligations or targets shortage areas.
It acts after or near the end of training. It does not add residency capacity itself.
Residency expansion adds training capacity
A new residency position creates an additional training opportunity and eventually adds a well-trained physician to the national workforce. A durable position can support repeated cohorts over time.
The effect takes years. That makes residency expansion a long-horizon workforce investment.
Interested in funding physician supply rather than only filling a current vacancy?
BeaconGME can evaluate qualifying residency opportunities by specialty, geography, funding gap, and workforce objective.
Training location can support local workforce strategy
AAMC reports that 55.7% of physicians who completed residency from 2015 through 2024 practice in the state where they trained. [4]
Do not use 55.7% as a guaranteed retention rate for a hospital or sponsor.
Use it as evidence that training geography belongs in workforce planning. Then measure the funded program’s actual local and institutional retention.
Match investment type to the problem
Use recruitment when a health system needs a physician now.
Use loan repayment when the goal is to attract an already-trained physician to a location.
Use retention programs when turnover is creating repeated vacancies.
Use residency sponsorship when the goal includes expanding future training capacity in a defined specialty or region.
Use more than one intervention when the shortage spans several time horizons.
Require measurable outcomes
A sponsor should define outcomes before money is committed:
- incremental residency positions created
- residents who complete training
- graduates practicing in the target geography
- graduates hired by target partner systems
- clinical capacity or access measures
- sustainability after the sponsor term
Count new capacity, not positions that already existed without the sponsor.
Fund the bottleneck that is actually limiting supply
A community can have a physician shortage for different reasons. The cause may be too little training capacity, weak recruitment, poor retention, an unfavorable practice environment, or a combination.
Residency funding has the strongest case when the training program is ready to grow and capital is the limiting factor.
BeaconGME
BeaconGME connects funding with qualifying residency training opportunities and measurable retention objectives.
Sources
[1] Health Resources and Services Administration. Health Workforce Projections: Physicians.
[2] National Resident Matching Program. Results and Data: 2026 Main Residency Match.
[3] Centers for Medicare & Medicaid Services. MLN Connects: Medicare-funded physician residency positions awarded, January 8, 2026.
[4] Association of American Medical Colleges. 2025 Report on Residents: Executive Summary.
