Physician shortages and licensing

An interview with Lawson Mansell

In the run-up to 2028, it seems likely that Democratic candidates will be focused on affordability and the cost of living as part of their pitch to voters. In healthcare, the statistics are particularly dire, with just under half of Americans saying that affording healthcare costs is difficult.

I’ve written before about how I believe the primary drivers of this rising cost are consolidated corporate power, pricing games (both pre- and post-AI), and other payor tactics.

Lawson Mansell, health policy analyst at the Niskanen Center, focuses on a different aspect: a lack of physicians in the U.S., and the barriers making it more difficult to increase the supply of physicians. In a way, he says, this is a corporate capture problem — as well as an issue with primary care residency slots, physician payments, and licensing.

I talked to him about his work:

Making primary care more attractive

Olivia Kosloff: You’ve written a lot about physician workforce. Besides the fact that we’re lacking physicians, what are you seeing?

Lawson Mansell: There’s one thing I always say when we talk about the physician shortage, which is that the idea of the doctor shortage is more a term of art than it is a term of science. I like to look at wait times for primary care visits as a really good proxy for whether or not we actually have a problem.

And so when we look at solutions, it has to be solutions that address these problems: How do we decrease wait times? We need more primary care doctors to lower wait times. How do you make sure that someone in a rural area can actually see a specialist? How do you make sure that it’s financially viable for a specialist to live in a rural area? And then the third part is — when you look at emergency medicine, how do you ensure that someone doesn’t have to wait too long in the ER? And that’s making sure that there’s enough emergency departments and there’s enough beds.

So my work tends to be focused around those three things: primary care access, rural access, and ensuring that we have enough beds in hospitals so that folks don’t have to wait a long time in the emergency room.

Are there specific policy measures that you think candidates or current congressional members should be considering? Or are these more regulatory fixes?

I think the core issue in access to care in America is a dearth of primary care physicians and long wait times for primary care. Solving that problem requires incentive readjustments on all ends of the spectrum.

A lot of times we think the solution is just to increase residency slots. It’s true that we have a residency bottleneck, but there’s also a lot of unfilled primary care residency slots in areas of need. And that’s more of a mismatch between what people — prospective doctors — want out of their career and what patients need. What if we forgive student loan debt for folks who go into primary care? What if we reduce the length of medical school for those folks to go into primary care? And that’s kind of one bucket of reforms is more of like taking it on the front end.

And then I think the real reason why folks don’t choose primary care is because it’s not the right financial decisions for most folks that want to become a doctor. So how do we make primary care pay again? Every doctor can save lives, but studies have shown that primary care simply saves more lives than other specialties. So making sure that we pay primary care doctors commensurate with their value to population health is paramount.

That’s regulatory; CMS needs to change the way they pay doctors. It’s corporate capture in the American Medical Association’s involvement in how much doctors get paid.

Then there’s another bucket, which is more about residency slots and how to improve the financial subsidy that the government gives to residency programs. I do a lot of work on how we should reorganize that bucket of funding to ensure that the formula doesn’t advantage highly paid specialties, and we should create more primary care slots where they are being filled.

Political incentives and corporate capture

These all seem very positive sum. Where’s the political breakdown happening?

The breakdown is really CMS controlling so much of how doctors get paid. The Medicare reimbursement for a primary care visit tends to be a benchmark for private reimbursements. So oftentimes what Medicare reimburses directly affects the market clearing rate. And what Medicare pays is almost entirely determined by the American Medical Association’s committee that advises CMS on how much each service is worth.

The American Medical Association has this control — they have the copyrights over the codes that are used to pay, and they also have control over how much a specialist makes for a mole removal versus how much a primary care doctor makes for a visit. They advise CMS on these things, and CMS tends to accept almost all of their recommendations. Fixing that process requires a lot of strong leadership on the side of CMS to be willing to confront that.

And if we’re not going to rely on the AMA to determine the value of these services, it also requires some really creative thinking on what do we replace it with. Because the AMA is the most convenient entity to do this. It may not be as sinister as some people believe, it’s just that the AMA has relationships with these doctors and so they can send out a survey and get information on how long it takes to perform certain services and then translate that into a value estimate.

In theory, at least, the AMA is a trade organization that represents all doctors. Wouldn’t their primary care physician members benefit from an increase in pay for primary care physicians, or does that not come without a decrease in pay for their specialist physicians?

Yeah, so there’s a couple things happening. One is the Physician Fee Schedule is budget neutral.

This last Physician Fee Schedule in 2026, CMS decided to institute something called an efficiency adjustment. That was essentially four procedures where CMS felt that technology had improved the efficiency of that procedure, and they would reduce the payment. So they instituted this efficiency adjustment — if you took it on the whole, it was approximately a 3% decrease in specialist procedural pay and approximately a 3% increase in primary care.

The AMA was not supportive of this redistribution. The AMA may say in theory that they want to prioritize primary care, but the reality is that in the physician fee schedule itself, it would require redistribution.

Similarly, when you think about graduate medical education (GME), it was capped in 1997 on a per institution level. So any sort of change in how the formula is determined that doesn’t include an increase in overall spending is going to necessarily redistribute dollars, and it’s going to take money away from large legacy institutions.

Expanding licensing pathways

You’ve also written a lot about licensing for international physicians in the U.S. Can you explain more about what the problem is there and what you’ve advocated for on the policy side?

The residency bottleneck comes from having too many people applying to residency slots than there are slots, and it comes from a mismatch between where folks want to match to residency and where there are open slots. Now, to be clear, there’s still way more folks applying than [mismatch with] open slots. But mismatch is also a big problem.

International physicians are in a unique situation where they can address both problems. One in the sense that oftentimes international physicians have already completed residency overseas, but they’re applying to these residency slots with American domestic trained graduates. More than half of states in the U.S. — it used to be all states four or five years ago — require that you do a U.S.- or Canada-based residency.

There’s an obvious solution here, which is we should probably recognize the residency training that folks did, particularly in countries where we can know for a fact that it’s similar. That was sort of the core problem that folks started seeing in the early 2000s and started creating what’s called alternative licensing pathways. Under certain stipulations you could apply for a program where you were supervised essentially for a period of time and then transition into a full license. At this point we now have 22 states that have passed a version of this bill; Washington State just passed theirs a couple weeks ago.

The potential of transformation of the primary care supply across the country with these reforms is huge. In Washington alone, we’ve already had 50 doctors that before the bill were not able to practice — some of them were driving Uber or serving as janitors — all practicing below their scope of expertise. At the end of this year, we’ll have 50 new licensed doctors that didn’t have to go through the residency bottleneck in Washington.