Why It’s So Hard to Become a Doctor—and Why That Matters for Patients

New research from Harris Public Policy’s Joshua Gottlieb finds that limits on training—and growing competition from nurse practitioners and others—are reshaping the U.S. healthcare workforce.

Becoming a doctor in the United States isn’t just difficult; it’s also tightly controlled. And that has big consequences for how much care costs, how long patients wait, and who actually provides that care, a new study suggests.

A new working paper by Professor Joshua Gottlieb of the Harris School of Public Policy and co-author Sean Nicholson of Cornell University, forthcoming in the Journal of Economic Perspectives, takes a close look at how competition works in the physician market. Their conclusion: to understand healthcare today, you must look not just at hospitals or insurance companies, but at who is allowed to become a doctor in the first place.

A bottleneck in the pipeline

The path to becoming a physician runs through two major choke points: medical school and residency training. Both opportunities for aspiring doctors are strictly limited.

Even as demand for care has surged, medical training has not kept pace. From 1980 to 2025, the U.S. population grew by 50 percent, and the number of Americans over age 64 grew by 140 percent. But over roughly the same period, medical school slots increased by just 34 percent. That imbalance has slowed the growth of the physician workforce. Between 2000 and 2022, the number of physicians per capita grew by just 0.8 percent per year—about half the rate seen in other developed countries.

That scarcity has important effects:

• The number of physicians remain relatively low
• Earnings increase for those who make it through
• Since slots are limited by specialty, top students are pushed toward higher-paying specialties

In other words, the system does not just limit how many doctors there are, but it also shapes what kind of doctors they become.

“If you want to understand competition in healthcare, you can’t just look at prices or hospital mergers,” said Gottlieb. “You have to look upstream, at the rules that determine who gets to become a doctor and what kind of care different workers are allowed to provide.”

One of the working paper’s key insights is that high-paying specialties remain especially hard to enter, defying the usual economic principle that high pay attracts more supply. And that means the financial stakes are large. Gottlieb’s previous research found that access to higher-paying specialties explains about 80 percent of the earnings advantage of attending a top-ranked medical school. Yet those specialties remain tightly capped. Even highly qualified students face steep odds: more than 20 percent of U.S. medical graduates who apply only to top-paying specialties like dermatology or orthopedic surgery fail to match.

This is not a typical labor market where higher wages draw in more workers, Gottlieb explained. Instead, supply is fixed by the system’s limitations on the rate of physician training.

Doctors aren’t the only game in town anymore

At the same time, the system is adapting in other ways, according to Gottlieb and Nicholson. Non-physician providers, such as nurse practitioners and physician assistants, have grown rapidly, helping fill gaps in care. This shift is especially visible in primary care, where fewer physicians are choosing to practice. To illustrate, at one leading medical school, just 14 percent of graduates entered primary care residencies, even though about 30 percent of practicing physicians work in those fields. For years, experts warned of a major physician shortage. But the crisis hasn’t hit as hard as expected.  This paper points to a key reason: substitution.  As physician supply remains constrained, the healthcare system increasingly relies on non-physician providers to meet demand—particularly in lower-paying, less specialized care.  This trend appears likely to continue.  In fact, nurse practitioner employment is forecasted to grow at a rate of 45% from now until 2030 while PA employment is expected to grow at a rate of 31%, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

Rethinking policy implications related to competition in healthcare

Based on their findings around physician scarcity and substitutes increasingly providing care, the authors argue that policymakers should focus on two questions:

1. Who is allowed to become a doctor?
2. Who is allowed to provide care?

Rules about medical school slots, residency programs, and scope-of-practice laws may matter just as much as mergers or pricing policies.

“The biggest policy levers aren’t always the most tangible ones,” Gottlieb said. “Decisions about residency funding, licensing, and scope-of-practice rules quietly shape the size and structure of the healthcare workforce—and ultimately what patients pay and how quickly they can get care.”

The U.S. healthcare system isn’t just shaped by market; it’s shaped by rules, he added.

Limits on training keep physician numbers low and incomes high, especially in specialized fields. At the same time, the rapid rise of nurse practitioners and other providers is changing who delivers care – and helping to create new pathways to the middle class. Together, these forces are quietly reshaping the healthcare workforce—and the experience patients have when they try to get care.