A new working paper from economists at the University of Chicago and Cornell University in Ithaca, N.Y., published March 2026 argues that regulatory gatekeepers, not market forces, have shaped American medicine into a system with too few physicians, too many barriers to entry and mounting pressure from nonphysician providers filling the gaps.
The paper, written by Joshua Gottlieb, PhD, economist and professor at the University of Chicago, and Sean Nicholson, PhD, professor in Cornell’s department of policy analysis and management and the director of the Sloan Program in health administration, examines competition in the U.S. physician market, specifically how entry barriers and the rise of substitute providers have shaped it over recent decades.
“It is striking how clearly economic theory explains so many phenomena in this market,” Dr. Nicholson told Becker’s. “Whether we’re talking about the rise of midlevels, or how physicians choose specialties, economic models predict the data very well.”
Here are the key findings:
1. The U.S. has only 2.7 practicing physicians per 1,000 people, well below the Organization for Economic Co-operation and Development’s average of 3.8, and per-capita physician growth in the U.S. (0.8%/year) is roughly half the OECD average. Meanwhile, the U.S. population grew 50% from 1980–2025, but first-year medical school positions grew only 34%.
2. In 2025, it took an average of 31 days to schedule a physician appointment across 15 large cities, up from 26 days in 2022 and 21 days in 2004. In Boston, the average wait is 65 days across six specialties.
3. Regulatory caps on medical school seats and residency slots, especially for high-paying specialties, continue to ration entry, generate high returns for those who gain slots and direct the most academically accomplished trainees toward lucrative fields. The ACGME does not determine or limit GME slots in the U.S., and the programs or sponsoring institutions decide on the number of specialty and subspecialty distribution of GME positions.
4. First-year residents have historically been paid the same amount regardless of specialty, even though some specialties are far more competitive. This wage rigidity prevents the market from clearing excess demand for spots in lucrative specialties.
5. In 2024, average earnings in nonprimary care specialties ranged from $342,000 in psychiatry to $680,000 in orthopedic surgery, compared with $265,000 to $326,000 in primary care. Over 20% of U.S. MD graduates who ranked only dermatology, orthopedic surgery, or plastic surgery in 2024 failed to match.
6. Access to higher-paid specialties explains around 80% of the earnings gained from attending a top-ranked medical school. Even when New York (City) University’s Grossman School of Medicine eliminated tuition to encourage primary care, its more competitive applicants were no more likely to enter primary care, only 14% of its 2024 graduates did so.
7. In 2025, U.S. MD graduates filled 79% of high-income residency positions despite making up only 47% of total Match applicants, while a minority of primary care residents are now U.S. MDs down from 89% in 1981.
8. Training of nurse practitioners and other types of providers has expanded far more rapidly than physician training. These providers have the fastest employment growth among all healthcare workers, averaging nearly three times that of physicians, and their earnings now slot between registered nurses and physicians.
9. There is a large cost differential: Anesthesiologists earned $523,000 on average in 2024 versus $232,000 for certified registered nurse anesthetists; nurse practitioners and physician assistants each earned around $130,000 — less than half what primary care physicians earn.
10. Geographic evidence suggests an elasticity of substitution of roughly 2 between nurse practitioners and physicians — areas where physicians are scarcer show faster NP growth, while physician growth is concentrated in higher-amenity, more educated areas.
11. The authors argue that conventional concentration measures like the Herfindahl-Hirschman Index are insufficient for analyzing physician competition. Effective competition policy needs to address upstream gatekeeping institutions (accreditation bodies, residency review committees, state licensure boards) and downstream scope-of-practice laws that determine whether other professionals can substitute for physicians.
12. After accounting for training length and work hours, primary care physicians earn roughly the same as lawyers, suggesting they may not earn significant economic rents — while other physicians earn substantially more, which continues to pull talented medical trainees toward specialization.
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