Crowd Out from Expanding the Supply of Foreign-Trained Doctors

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This figure is a two-panel scatter plot titled, Effects of Admitting More Foreign-Trained Doctors. The y-axis for the left side panel is labeled, International Medical Graduates per 100,000 people. It ranges from negative 5 to positive 10, increasing in increments of 5. The y-axis for the right side panel is labeled, US-trained doctors per 100,000 people. It ranges from negative 10 to positive 10, increasing in increments of 5.  The x-axis for both panels is time and ranges from 1997 to 2012. There is a dotted line at 2001 that is labeled, Increase in per-state federal cap on J-1 visas. Together, both panels show that after the federal cap increase in 2001, the number of international medical graduates increased over time, but the number of US-trained doctors did not significantly decrease. This demonstrates an apparent lack of crowding out. By 2012, there were 4 more international medical graduates per 100,000 people compared to 2001. For US-trained doctors, there is a slight negative decrease but the confidence intervals overlap with zero, indicating the change is not statistically significant. The note on the figure reads, Bars represent 95% confidence intervals. The source on the figure reads, Source: Researchers’ calculations using data from the American Medical Association and State Primary Care Offices.

The number of new physicians trained in the US each year is constrained in part by the capacity of domestic medical schools. Graduates of foreign medical schools augment this supply to some extent; many apply to and are accepted by medical residency programs in the US. After graduation from these programs, the J-1 visa program that typically covers their residency requires that foreign-trained doctors spend two years in their home countries, effectively deferring their entry into the US healthcare workforce. The Conrad 30 Waiver Program, introduced in 1994, allows some international medical graduates (IMGs) to apply for a waiver of the two-year foreign residence requirement and begin practice in the US immediately after residency. Over 18,000 foreign physicians have participated in the program since 2001.

In Migration Policy and the Supply of Foreign Physicians: Evidence from the Conrad 30 Waiver Program (NBER Working Paper 32005), researchers Breno Braga, Gaurav Khanna, and Sarah Turner use data from 1997 to 2020 to analyze the impact of a 2002 expansion in the waiver program that increased the per-state cap on the number of visa waivers from 20 to 30. They estimate that this program allowed an additional 4,000 IMGs to enter the US between 2002 and 2020.

Expansion of a visa-waiver program in 2002 enabled more foreign-trained doctors to practice in underserved areas in the US but did not reduce employment of US-trained doctors.

There is substantial variation across states in the use of the visa waivers that the Conrad 30 program allows. In 2001, before the limit increase, the 18 states at or near the 20-waiver limit had more IMGs and fewer US-trained doctors per capita than the 33 states comfortably below the limit. States constrained by the cap had fewer restrictions on whether waiver recipients needed to be primary care physicians or work in facilities required to accept patients who were uninsured or covered by Medicaid. In the decade following the cap increase, all states experienced increases in the number of IMGs per capita, but the 18 constrained states requested more waivers, on average, than the 33 nonconstrained states. States with fewer restrictions on practice, including requirements to work in primary care, were better able to leverage the change in the cap and enroll more participants in the program.

The 2002 expansion of the waiver limit raised the supply of foreign-trained doctors in constrained states, but there is no evidence of a decline in the number of US-trained physicians in these states. States that took advantage of the cap expansion experienced a 9 percent increase in the number of IMG doctors per capita compared with the unconstrained states. Most IMGs work in Health Professional Shortage Areas (HPSAs) — areas lacking an adequate number of primary care physicians, dentists, or mental health care providers. The gap in the supply of IMGs between better-served and underserved counties decreased by about 41 percent in states with fewer restrictions, without any detectable effects on US-born doctors. The researchers conclude that expanding the number of Conrad 30 waivers likely increased physician availability in underserved areas.

— Leonardo Vasquez

This research was supported by a grant from the National Science Foundation (Award Number: 1735786).