Federal residency funding expands primary care pipeline, study finds

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A study published in PLOS ONE last month suggests that targeted federal funding under the Affordable Care Act (ACA) has played a key role in expanding primary care residency programs, particularly in underserved and rural areas. With the U.S. facing a worsening primary care physician shortage, the findings offer insight into how graduate medical education (GME) funding can help address the growing demand for frontline health care providers.

Researchers from Georgia Institute of Technology and Emory University examined how ACA provisions altered the number of residents hospitals could train with federal reimbursement. They found a direct link between funding changes and residency program growth, particularly in primary care settings

“The results show that an increase in a hospital’s resident cap of one slot under one of these ACA provisions in 2010 is associated with an increase in residency program size of approximately one full-time equivalent resident,” the study found.

A lifeline for primary care

The U.S. is on track to face a physician shortage of up to 124,000 doctors by 2034, with the primary care sector among the hardest hit.

More than 100 million Americans already live in designated primary care health professional shortage areas (HPSAs), and rural communities face the most severe provider gaps.

The ACA aimed to tackle this issue by redistributing unfilled residency slots from hospitals with excess capacity to those in high-need areas (Section 5503) and preserving slots from closed hospitals (Section 5506). The law required that at least 75% of additional slots from Section 5503 be dedicated to primary care or general surgery training.

The study found that both provisions led to measurable residency program growth. Hospitals receiving slots through Section 5506 increased their residency numbers by roughly 1.3 residents per additional slot, primarily in non-primary care fields. However, Section 5503 cap increases were determined to be most effective at expanding primary care training, producing a nearly one-to-one ratio of added slots to new primary care residents.

Can more residency slots fix the physician shortage?

Although the study confirms that increasing residency funding leads to more trained doctors, it remains unclear whether those physicians ultimately practice in the high-need areas the policy targets. Researchers noted that, while more than half of physicians stay in the state where they completed residency, retention in underserved rural areas is less predictable. Another concern is whether physicians who train in primary care remain in the field rather than subspecializing.

Yet, despite these concerns, the study supports recent legislative efforts to further increase GME funding, The Consolidated Appropriations Act of 2023, for example, allocated more than 1,000 new residency slots, prioritizing hospitals in states with new medical schools and those serving underserved populations — similar to the criteria used in the ACA provisions.

What’s next?

Increasing the number of residency slots is likely just one piece of the solution. To truly strengthen the primary care workforce and adequately address the shortage, additional policies — loan forgiveness programs, financial incentives for rural practice, and reforms to physician compensation — may be necessary.

The study’s authors suggest that continuous evaluation of GME funding is essential to ensure that investments lead to meaningful improvements. They specifically call for future studies to evaluate the extent to which rurally-trained physicians ultimately practice in rural areas, and how often physicians who complete primary care residencies end up practicing in primary care.

“These results highlight the importance of policy design as it relates to the eligibility criteria for receiving and keeping GME funding increases and may be consistent with smaller programs facing relatively higher costs from scaling up in the residency match,” the authors wrote.