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The Winner and Losers of Tennessee's Changing Residency Requirements

Op-Med is a collection of original articles contributed by Doximity members.

Twenty-three percent of the physician workforce in the U.S. are graduates of international medical schools (IMGs). 

To be eligible for medical licensure, these IMGs must meet the same high standards as their colleagues who completed medical school in the U.S. — including completing at least 1-3 years of U.S. residency training. But in late May, the governor of Tennessee signed into law a bill allowing certain IMGs a pathway to medical licensure without completing U.S. residency training.

This is big news — and raises questions about what this policy will mean for IMGs, the hospitals that hire them, the patients they’ll serve, and medical training at large. Who wins – and who loses – when the Tennessee law goes into place? So I’ve broken it down to tell you who I think the Winners & Losers will be. 

WINNER: Experienced IMGs.

To be eligible to bypass U.S. residency training, an IMG must complete a three-year postgraduate training program in another country and/or have been licensed and practicing as a physician for at least three of the past five years. Fresh medical school grads without practice experience won’t qualify.

Still, the current residency application pool includes many IMGs who could benefit from Tennessee’s new law. Paradoxically, these experienced physicians often attract little interest from residency program directors, as many programs use a “year of graduation” filter to screen applicants for interview consideration. Now, they may be able to bypass American residency programs altogether.

LOSER: Tennessee hospital HR departments.

Most residency programs screen applicants with automated filters because they receive hundreds of applications for each position, making individual review nearly impossible. 

Soon, HR directors at Tennessee hospitals seeking experienced IMGs will have to contend with “Application Fever” as they try to figure out a way to sift through an enormous queue of qualified applicants. 

PUSH: Underserved patients.

One goal of the new law is to improve physician access for medically underserved patients.

Will it work? I don’t know.

We hear a lot about the physician shortage, with estimates from the AAMC – an organization whose member institutions have a vested interest in producing more physicians – predicting a shortfall of ~38,000-124,000 physicians by 2034. In Tennessee, nearly every county in the state includes medically underserved populations for primary care. Yet some of these underserved populations live in the shadow of Tennessee’s largest medical centers. There’s a distributional aspect to physician shortages that is poorly-accounted for in most modeling, with areas of surplus adjacent to areas of shortage.

If you just license more physicians – hoping that the excess will “trickle down” to the areas of greatest need – the results may be disappointing. Unless you address the incentives that cause certain geographic areas and populations to be underserved in the first place, physician-rich areas may simply grow richer, while the underserved remain underserved.

(In my opinion, if Tennessee legislators really wanted to improve access for medically-underserved citizens, other policies might be more efficient: improving Medicaid reimbursement, expanding student loan forgiveness programs, strengthening specialty outreach/telehealth, etc.)

LOSER: American IMGs.

Many IMGs can pursue high-quality residency training in their countries of origin. But nearly 40% of IMGs are U.S. citizens who attend overseas (typically Caribbean) medical schools. Typically, only ~60% of these IMGs successfully match into U.S. residency programs, but unmatched American IMGs have limited options for non-U.S. clinical training and practice and are unlikely to become eligible for Tennessee’s new pathway. 

(However, in the same legislative session, Tennessee did pass a different law that would allow unmatched U.S. citizens or "legal resident alien" doctors to work as “graduate physicians” under the supervision of a licensed primary care physician.)

PUSH: Administrative barriers.

Just because Tennessee allows their licensure doesn’t automatically remove certain administrative barriers to physician practice (and reimbursement).

Will board certification organizations allow IMGs who bypass residency to sit for their examinations? If they don’t, will insurers credential (and allow billing) from non-board eligible physicians? Will non-citizen IMGs be able to efficiently secure work visas to fill available positions? Will malpractice carriers underwrite policies for physicians who haven’t completed U.S. residency training?

How these potential issues will be resolved is unclear. What is clear is that the new law has broad, bipartisan support in the Tennessee legislature (passing the House 92-1 and the Senate 29-1). With this much momentum, the state government may be willing to leverage some of its considerable power and influence to ensure the doctors they license can practice in the way they intended.

WINNER: Academic medical centers.

An IMG who has completed residency and been licensed overseas can’t simply pick up a medical license and start practicing anywhere in Tennessee. The law requires that these physicians work for two years at a medical center with accredited residency training programs before they’re eligible to receive an unrestricted license. 

There aren’t that many hospitals in Tennessee with accredited residency programs. Almost all of Tennessee’s residency positions are at hospitals affiliated with Vanderbilt; the University of Tennessee; Meharry Medical College; East Tennessee State University; and of course, HCA Healthcare, the nation’s largest for-profit hospital chain.

These hospitals may be the biggest winners, as they’ll now be able to hire experienced physicians – likely at bargain-basement rates.

The significance of this must be understood in the context of broader trends in residency training and program accreditation. The ACGME has steadily been moving toward training standards that reduce hospitals’ ability to rely on resident physicians as a cheap source of labor. Things like duty hour restrictions, patient caps, increased elective time, individualized learning plans, etc., make it difficult for hospitals to depend on wall-to-wall resident coverage for key inpatient units.

Reducing hospitals’ reliance on resident service is a prerequisite to competency-based (rather than time-based) residency training – but creates a staffing need. By creating a pathway for highly-qualified IMGs to work 2-year stints as attending physicians – almost certainly for salaries less than an experienced U.S. graduate would command, and with near-zero recruiting costs – HCA and Tennessee’s big academic medical centers may have found an ingenious solution.

PUSH: Other states.

Will other states follow Tennessee’s lead and allow licensure for experienced IMGs without U.S. residency training? Will the American Medical Association or other entities eventually begin to advocate against such proposals? Who knows – but over the next few years, many eyes will be on the Volunteer State as the tradeoffs inherent in this new law play out.

Image by 1981 Rustic Studio kan / Shutterstock

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