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Shortage of Solutions Opening more medical schools alone won’t solve the coming doctor shortage in New Jersey

No one in the health care field disputes that there is a coming physician shortage nationwide, including in New Jersey. Worst-case estimates, in fact, say the state may be approximately 2,500 physicians short of what will be needed in the next decade.

It is why the Association of American Medical Colleges called for an increase in student enrollment at U.S. schools nearly a decade ago.

And why New Jersey has one of the fastest growing medical student enrollments in the country — a number that increased with the opening of the Cooper Medical School of Rowan University in 2012 and will get even larger with the Seton Hall University and Hackensack Meridian Health joint venture medical school, which is slated to open fall of 2018.

Problem solved? Not by a long shot.

Health care officials also know that just adding more medical schools — and students — will not be enough to solve the physician shortage problem in New Jersey.

A high cost of living and income taxes in the Garden State, paired with the debt burden of a medical education, works against New Jersey.

So does having limited spots for residents.

And then there’s this: Increased opportunities for doctors may mean fewer physicians who practice traditional medicine. And if they do, there’s no guarantee they will become what is most needed: general practitioners.

This much is clear: There is no easy fix to the physician shortage problem.


Hackensack Meridian Health co-CEO Robert Garrett sees a geography problem.

“In my opinion, there is a talent drain,” Garrett said. “We are still seeing a big exodus of young people in medicine study outside of the state and country, at offshore schools and other countries. There is an opportunity to reverse that talent drain.

“Statistically, if they are educated in New Jersey, and if they are doing their residency in New Jersey, they are twice as likely to stay in the state. That gives us a real talent pool for generations to come.”

But the stakes are high in the state for schools promising to fill the anticipated gap in medical professionals.

U.S. students are faced with competition from international students, and the competition only figures to increase with more students being added to the system.

This means there needs to be an increase in residency slots to alleviate the pressure on the system, according to Michael Dill, director of workforce studies with the AAMC.

Residency slots are currently funded and capped by Medicare, along with minimal input from schools, teaching hospitals and state funding.

Which is why Fred Jacobs, executive vice president of St. George’s University in Grenada and a former executive with Barnabas Health, said the additional schools in New Jersey are only adding pressure to a system that is already burdened by a lack of funding, under the banner of trying to solve the physician shortage problem.

“If the shortage issue is a funding issue, how does that help to have more schools? It does not help,” said Jacobs, also a former New Jersey health and senior services commissioner. “It’s misleading for people to say we have a doctor shortage and to open a new medical school that is not going to solve the problem.”

In addition, industry changes and generational differences will affect the scale of the shortage.

Barry Ostrowsky, CEO and president of RWJBarnabas Health, said medical enrollment is on track.

“Clearly, we are not overburdened by the number of medical school seats,” Ostrowsky said. “I think for our state, we have a reasonable number of medical school seats. In no way do we have more capacity than we should have.”

But the increasing U.S. students will be fighting for residency seats with the steady stream of internationally-trained students. This includes U.S. citizens who are studying at “offshore” schools like St George’s, where the state’s hospitals recruit sizably.

Bonita Stanton, founding dean of the new joint venture medical school between Seton Hall and Hackensack Meridian, said that, with more schools opening up in the U.S., fewer students will have to be turned away and resort to offshore schools.

A 2015 report by the AAMC showed New Jersey had the highest percentage of physicians who are international graduates in the country, about 38 percent. Historically, however, there has been a stigma attached to offshore schools, and there are some who see offshore schools as last resorts for students.

Doctor, doctor
There are not nearly enough spots in U.S. medical schools to accept the thousands of applicants each year. Students who are not accepted often turn to international options, commonly referred to as “offshore” schools, where they will fight for residencies with U.S.-based students.
The state’s four medical schools in 2016:

  • 14,000 applicants
  • 1,688 enrollments
  • 332 graduates

Rutgers New Jersey Medical School Chancellor Brian Strom believes foreign-trained students are lowering the quality of training for U.S.-educated students.

“What I don’t want is our students training in wards and in teams with foreign medical students,” Strom said. “It weakens the training they get. It downgrades the training they are able to get because the teaching has to be lowered to their level.”

He also said that testing for medical students in other countries isn’t as stringent as in the U.S.

International students test better than U.S. students and are therefore likelier to get their preferred location for residency. That has caused criticism of the system and a call for increased U.S. citizens into the programs.

Stanton isn’t buying the argument.

“I tread lightly because, as a nation, we have benefitted tremendously from foreigners coming from foreign schools,” she said. “We have an infusion of very bright students from other countries and they do their residency here. Many students that are going to offshore schools are indistinguishable from students of our own.”


Residencies are another big issue.

New Jersey is allotted roughly 800 slots annually for residencies at 42 hospitals. While that is more than double the current number of state graduates each year, the teaching hospitals draw from states that have fewer slots available, as well.

Statistically, this should mean higher chances of doctors staying in New Jersey to practice, but financial factors such as a high cost of living and income taxes deter residents. It is during this period of education that the students often decide which specialty they will practice for the rest of their lives.

The residency programs have been funded by Medicare since the federal program was created in the 1960s. Each state is capped by Medicare for the amount of residency slots they are reimbursed for.

Garrett and the AAMC both said they are lobbying for increased Medicare funding for the residency slots.

When Medicare, originally called the hospital insurance program, was created in the 1960s, an amendment calling for eventually finding alternative “community” funding sources for educational activities was added.

Fifty years later, no other sources have emerged to carry the bulk of the load, but the AAMC said it is an ongoing discussion.

“There have been and there are ongoing conversations about other ways to supplement (residents) but Medicare is sort of the big funding source and remains so,” Dill said. “I’ve never heard of it referred to as temporary.”

In a recent statement, AAMC said it “called for a multipronged approach to alleviate the shortage, including innovations in care delivery, improving technology use and urging Congress to increase federal support to add 3,000 new residency positions annually during the next five years.”

There are currently about 3,400 residents in New Jersey, and more than 750 of those slots were filled in 2016.

Garrett said the increase should be paired with funding from health systems, which need and use the manpower of residents for their workforce.

In fact, Hackensack pays for 75 positions, which cost about $100,000 each, according to spokesman Jose Lozano.

Garrett said that cost covers everything, including wages, benefits, malpractice insurance and meals.

RWJBarnabas Health, the new parent company of the state’s largest health system, said it funds 900 student residents.

This does match the multipronged approach AAMC is asking for, but other solutions combined will help stabilize the demand problem, Dill said.

That includes state Medicaid funding, which New Jersey does distribute. It is one of several states that does.

According to the state Department of Health, “The number of resident positions are part of a formula used to calculate the graduate medical education costs for hospitals and used to distribute the $188 million dollars in Medicaid funding allocated as part of the state fiscal year 2017 budget for graduate medical education funding.“

Of that total, the state contribution is $65.8 million. In Gov. Chris Christie’s fiscal year 2016 budget proposal, there was a proposed increase to $127.3 million.

Another funding source are offshore schools, such as St. George’s, which helps hospitals fund residency spots with grants.

Which is why critics like Jacobs says simply adding schools is only exacerbating the existing problem.

“The problem is with more medical schools. There is more competition for the same number of residencies,” he said.


So, what is the solution?

In 2013, the state Legislature sought to offer students loan forgiveness if they practiced in the state for five years.

The concept isn’t new.

Both the military and public health entities offer similar programs — forgiving loans in exchange for a dedicated few years working in the system.

The measure was pocket-vetoed by Christie.

Like New Jersey, California hasn’t adopted a law, but that didn’t stop the University of California, Riverside, from providing the incentive.

The medical program at the school, which will graduate its first class next year, has offered 10 students to have their loan forgiven if they work for five years after graduation serving the underserved population in the region through one of six disciplines, including general practitioner, OB/GYN, surgery and psychiatry.

If the student chooses to switch disciplines, the scholarship turns into a loan with market interest rates, Dr. Paul Lyons, senior associate dean for education at UCR, said. So far, interest has been relatively high in the scholarship.

“It’s limited by ability to raise funds for that kind of scholarship,” Lyons said.

“It is roughly $150,000 per student per year. With 10, it’s about $1.5 million; multiply that by four is $6 million. It’s not from an endowment and needs to be raised every time. The issue is one of money, not of commitment. If we thought we could come up with such an offer for every student that came in, we would be happy to make that offer.”

Schools in New Jersey have discussed a similar program, but no action has been taken yet. Of course, if they do, they will face another problem: Uncertainty about just how big the coming physician shortage will be.

Right now, the formula calls for a certain number of physicians per a population of 100,000. But that could all change as the roles of physicians change in the future, Dill said.

Team-based care is changing the demand for physicians, coupled with the increase in insured individuals — thanks to the Affordable Care Act.

“No one has good numbers on how much that will shift,” he said. “Teams are an interesting concept. Team-based care is, in many instances, the right way to go. It doesn’t necessarily reduce the number of physicians you need.”

Adding the millennial mindset to the mix produces a whole new head-scratcher.

Millennials want to work for stable organizations and not worry about having to run a practice. They also want to be able to work fewer hours, focusing on a balance between work and life, experts said.

Added to the uncertainty is the aging physician population — of which New Jersey has among the highest portions in the country — which will be leaving vacancies that need to be filled.

AAMC announced a study, conducted by the global information company IHS Inc., which shows retirement decisions will have the most significant impact on physician supply. In the next decade, more than one-third of physicians currently active in the country will be 65 or older.

So, does that mean we may see an increase or decrease in the need for physicians in the future?

“I cannot answer that definitively,” Dill said. “It might (increase). We are looking at it and trying to figure it out; it’s context-specific. It will require more health care professionals. It might require more physicians or require physicians doing different things than they are now.”

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Anjalee Khemlani

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