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Comment by syops | Hacker News Reader

The bottleneck is not the number of people with an MD. The bottleneck is the number of residency programs. These are funded by Medicare and I believe they are not profitable for hospitals.

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I don't know how residencies could not be profitable for hospitals. Hospitals receive something like $120k/yr per resident, then work residents 80+ hours/week at $50k/yr pay, amounting to right around minimum wage (for my city). Residents do a tremendous amount of work in supporting the hospital, so much so that a single resident getting deathly ill and needing to stay home (e.g a surgery resident getting covid, which I witnessed) is enough to send a massive shock through a hospital and force other residents into 100+ hr/week schedules. I know this because my wife is a surgery resident and I'm describing a situation from this year.

Edit: But there are still way too few residency spots. I think it has to do with the difficulty and administrative work around starting a new program or with getting federal funding for more spots.

The residency slots are so limited right now because the AMA lobbied hard against expanding them in the 1990s (fearing a "glut" of doctors).

Edit: Every time this comes up I go down a rabbit hole of looking for an article from the mid-to-late 90s where a medical lobbyist spoke about how doctors would be forced to leave the profession and do "mundane" jobs like driving cabs if the residency slots weren't capped. It did not paint the lobby in a good light, and I've love to see it trotted out today. I never have been able to find the article online. If somebody with better search-engine-fu than me can find it I'd be greatful.

The AMA is actively lobbying for more residency slots.

https://www.ama-assn.org/press-center/press-releases/ama-fun...

They are now. They weren't back in the 90s.

Is it this one?

https://www.baltimoresun.com/news/bs-xpm-1997-03-01-19970600...

Or maybe this one?

https://www.nytimes.com/1986/06/14/us/ama-board-studies-ways...

I don't know how residencies could not be profitable for hospitals.

If it helps, think about it this way,

how does the malpractice work?

There are a lot of indirect costs around residents. For example, staffing mandates. Think what implications there are to regulations that say, for instance, no more than 4 patients for each RN on duty. That said, there are a lot of indirect funding sources too. The problem is, of course, sometimes the funding doesn't equal the costs depending on where you are.

And now we come to the rub. Which of the MDs are willing to do their residences in places where everything matches up nicely to support a lot of residents? Keeping in mind that those places may not be Sarasota, or Tampa, or Charlotte, but rather places in Alaska, a small desert city in New Mexico, or some small place on the tundra of North Dakota.

If you're asking, does the US government give enough funding? You can get an answer that's "Yes" if you consider nothing else.

Does that funding cover every regulatory cost of having a provider on staff? Not likely, depending on the rules in the state you're in.

Does that funding get to where MDs want to practice? Rarely at all does that happen.

There's some good reason to think that residencies are profitable: in 2019, 550 of them were auctioned off for $55 million in a controversial bankruptcy case.

https://www.inquirer.com/business/hahnemann-university-hospi...

So residences are basically taxi medallions. Interesting.

They are taxi medallions to newly graduated MDs but not to the hospital. Without a residency slot MDs often times are relegated to a lifetime of med school debt servicing.

It is not that the residencies themselves are profitable. It is that medical schools need to be able to provide residency slots to their students to have an effective program. Definitely an issue for newly formed for-profit medical schools.

This is correct and needs to be upvoted more. The number of residency slots is artificially capped and already fails to serve the number of medical school graduates in the country. The Balanced Budget Act of 1997 is the basic vehicle for this cap. In Dec 2020 the first expansion in decades was passed, adding a whopping 1000 residency spots.

Look up Graduate Medical Education program for more info. For more key words, see this document from the U of California system that has an agenda (increase capacity) but also effectively lists salient points: https://www.ucop.edu/federal-governmental-relations/_files/f...

A helpful link on this subject. Apparently, medical schools in the US are now allowing more graduates. Not sure about profitability of residency programs, but certainly not all hospitals are teaching hospitals and the latter are federally subsidized.

https://www.aamc.org/news-insights/us-medical-school-enrollm...

I don't think it's about the profit it's the fact that anything involving Medicare is a big political fight

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