Report: Provisional Licenses Would Address Physician Shortage

Published July 10, 2017

Granting medical school graduates provisional licenses to practice medicine could help offset the national physician shortage, a new report by The Heritage Foundation states.

The United States is heading toward a shortage of between 40,800 and 104,900 physicians by 2030, according to “Addressing the Physician Shortage by Taking Advantage of an Untapped Medical Resource,” released on May 31.

Each year, thousands of recent medical school graduates are unable to work in the medical field because there are too few residency training program positions, which doctors must complete before pursuing board certification in a medical specialty. Positions are limited because residency training programs have increasingly come to rely on federal taxpayer funding, which is capped, the report states.

Letting medical school graduates who have been excluded from a residency program obtain provisional medical licenses would allow such a doctor to provide a limited range of services as the employee of a supervising licensed physician, the authors write.

Incentive Alignment

Shortcomings of the graduate medical education (GME) system have produced the current shortage of doctors, the report states.

“The U.S. GME system suffers from a number of serious problems, most notably a failure to produce an adequate number and mix of doctors to meet the health care needs of the American public,” the authors write.

Funding of GME programs is misallocated, the report states.

“Because GME funding goes directly to the teaching institutions, this money is often focused on the narrow needs of the teaching hospital rather than the broader health care needs of the population as a whole,” the authors write.

New Midlevel Provider?

Kevin Dayaratna, senior statistician and research programmer at The Heritage Foundation and a coauthor of the report, says granting limited, temporary licenses would let doctors start treating patients and obtain on-the-job training.

“Licensure laws prevent medical graduates from being able to help people that they’re trained to help,” Dayaratna told Health Care News. “If we can allow provisional licenses, they can at least help in these rural areas or other areas where care might be needed and a doctor might like to hire a medical graduate.”

Provisionally licensed graduates could become the kind of midlevel provider favored most by supervising physicians who employ them, Dayaratna says.

“Doctors might, quite frankly, prefer to hire medical graduates over a physician assistant or a nurse practitioner, especially international medical graduates that might have a significant amount of experience coming from abroad,” Dayaratna said.

‘Surplus of Talent’

Provisional licensing would let states “take advantage of the existing surplus of talent in the U.S.,” the report states.

Dr. John O’Shea, senior fellow in health policy at The Heritage Foundation and the report’s coauthor, says medical school graduates excluded from residency programs are an untapped resource.

“[The goal is] to get these people who’ve graduated from medical school to be able to participate in the workforce and maybe alleviate some of the shortage problems, or at least help,” O’Shea told Health Care News. “It doesn’t make sense to have fairly qualified medical graduates just sitting around doing things that don’t have anything to do with medicine or taking care of patients.”

Laboratories of Democracy

Arkansas, Kansas, Missouri, and Utah allow medical school graduates to obtain provisional licenses and practice under supervising physicians, with certain restrictions, the report states.

“Although these reforms are definitely a step in the right direction, these states have also imposed a number of unnecessary restrictions on their provisional licenses that seem to be counterproductive,” Dayaratna and O’Shea write.

Restrictions vary by state and include limiting eligibility to doctors who graduated from medical school in the past seven years and to graduates of in-state medical schools, the report states.

O’Shea says state lawmakers should embrace provisional licenses as an invention born of necessity.

“The message that we should drive home and underline is the need to be more innovative about how we do health care,” O’Shea said. “If it pushes the current organizations to be more flexible, that would be one good thing.”

Innovation vs. Establishment

Dayaratna says special interests in the medical establishment are resisting provisional licensing to limit the supply of providers so incumbents can charge more for services.

“From the medical establishment, the pushback to this type of proposal is that it’s going to jeopardize patient safety, but the big concern on their end is most likely competition,” Dayaratna said. “With a limited supply of doctors, obviously salaries are going to be higher. Once you increase the supply, that whole picture changes; there’s competition, and they could lose control of the field that they currently have.”

Successful provisional licensing programs could inspire other reforms, Dayaratna says.

“If you have a real supply of these talented people who need training, you might see challenges to the existing system: alternative training mechanisms outside of the standard residency models, maybe even alternative board certification,” Dayaratna said.

Innovative training and specialty certification programs could emerge as the experience gained by provisionally licensed doctors proves effective, Dayaratna says.

“In the long run, you could see the different certifying entities and different training entities competing to provide the best training and the best certification,” Dayaratna said.

David Grandouiller ([email protected]) writes from Jamestown, Ohio.

Internet Info:

Kevin Dayaratna and Dr. John O’Shea, “Addressing the Physician Shortage by Taking Advantage of an Untapped Medical Resource,” The Heritage Foundation, May 31, 2017:

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