The education and training of a doctor is a long and costly endeavor. First comes the classroom education, the cost of which is picked up, for the most part for those not fortunate enough to get a scholarship, by the future doctor him or herself. Then comes a final on-the-job training period in which doctors with new diplomas spend four or more years working in a residency program.

During this residency, doctors in training see and treat patients under the supervision of more seasoned physicians. Most of these residency programs are carried out in teaching hospitals, which account for approximately 20% of the nation’s hospitals. Residency programs are arduous. Residents are expected to routinely work 80 hours a week and they are paid half or far less of what they will receive for much the same work after the residency. This training is expensive for the system as a whole and has been, for all practical purposes, nationalized.

The U.S. federal government pays for most of this training with money from the Medicare and Medicaid systems. Our market size today is the money spent by the federal government annually to support this graduate medical education.

Geographic reference: United States
Year: 2012
Market size: $11.5 billion of U.S. government funds are used to support residency slots in training hospitals, approximately 115,000 in 2012
Source: Catherine Dower, “Graduate Medical Education,” a health policy brief published in Health Affairs, on August 31, 2012 and available online here.
Original source: U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services
Posted on January 22, 2014