A suggested reason why doctors get paid so much more in the US as opposed to other developed countries is that the American Medical Association (AMA) artificially limits the physician supply in order to drive up salaries. I found this article which blames the AMA, but gives as its only source Milton Friedman's book from 1962.

A more recent article dates from 1986. Lew Rockwell also blames the AMA, but he also doesn't cite too many sources nor go into specifics.

So, does the AMA limit doctor certifications in order to increase salaries?

EDIT: At Cos's suggestion, I would like to remark that it is unlikely that you will find an interview with the head of the AMA saying "we want to screw over new doctors so existing ones get paid more." So the standard of evidence is something like:

  • Has the AMA (since 1962) had policies (or taken action) to restrict the expansion of existing medical schools or discourage the creation of new medical schools?
  • Are doctors in short supply? If so, can this be explained independently of the AMA policies?

3 Answers 3


This USA today article from 2005 confirms that the AMA and other organizations were indeed actively seeking to limit the number of new physicians being trained to prevent a projected surplus.

For the past quarter-century, the American Medical Association and other industry groups have predicted a glut of doctors and worked to limit the number of new physicians. In 1994, the Journal of the American Medical Association predicted a surplus of 165,000 doctors by 2000.

However once the looming shortage became apparent, these efforts were reversed. For example the American Association of Medical Colleges (AAMC) set the goal of increasing medical school enrollment by 30% from 2002 levels by 2015. Unfortunately they are already behind on this goal.

More importantly, medical school itself is not the rate-limiting step in training new physicians. As a recent, excellent article in the Seattle Times points out,

In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

The article goes on:

The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.

The article also includes a fairly in-depth account of the mid-00's reversal of fears from surplus to shortage which I won't bother to blockquote here. It's worth reading if you're really interested.

In summary, while this claim may have had some truth in the past, it is certainly not true now as the major professional organizations are actively lobbying to expand medical education. Unfortunately at the moment the major limiting factor in that expansion is federal health spending, which in the current political environment is a hard sell even for the powerful AMA lobby.

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    Why do "graduates must complete at least three years of residency training"? Did the AMA have anything to do with imposing such requirements? Commented Aug 7, 2016 at 23:12
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    @jaysonvirissimo because attending lectures and passing tests is not enough. You have to do the things you're supposed to be able to do, and there are such a variety of things in that list, three years is probably not even enough to get them all checked for every doctor. Just long enough for most to do most, and the important stuff.
    – Nij
    Commented Aug 14, 2016 at 3:33
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    Makes sense @Nij, but some countries have more/less required residency than the US does. Do countries that require 1 or 2 years residency have unqualified doctors practicing medicine? Commented Aug 14, 2016 at 20:20
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    @jaysonvirissimo Depends on what else they do, and to what extent they cover it. It's a lot easier to have experienced something when there are 2 chances for 2 people, than it is with 10 chances for 12 people, for example.
    – Nij
    Commented Aug 14, 2016 at 21:18

Given the dearth of answers, I tried to do some more research. I found the following suggestive statistic:

In 2002, there was a baseline of 16,488 annual admissions to LCME medical schools; by 2009, the number of medical students enrolled had increased by 11.6 percent to 18,393... From 2002 to 2009 there was a 62.2 percent increase in annual enrollment [of osteopathic schools] - CGME 20th report

Given that allopathic and osteopathic degrees are legally equivalent, we might expect demand to be equivalent. So it is suggestive that AMA-accredited schools have much smaller growth in enrollment than non-AMA-accredited schools.

In fact, from 2002-2013, there will be 3k more DOs (an increase of 99%) and 3.5k more MDs (an increase of 30%). So again, unless there is just a huge shift in preference for DO vs. MD, it seems unlikely that this is the result of a free market.

EDIT: As far as I can tell, DO and MD are quite similar:

Osteopathic physicians, known as DOs, are licensed to practice medicine and surgery in all 50 states and have full scope of medical practice in over 50 countries... “We now find ourselves living at a time when osteopathic and allopathic graduates are both sought after by many of the same residency programs; are in most instances both licensed by the same licensing boards; are both privileged by many of the same hospitals; and are found in appreciable numbers on the faculties of each other's medical schools." - wikipedia

DOs are allowed to prescribe meds, do surgeries etc. the same as MDs. Further certifications (e.g. anesthesiology) are open to them just as if they were MDs. I don't think that DO is exactly equivalent to MD, but they seem similar enough that we would expect demand to be approximately the same.

The LCME accredits allopathic schools; it's made up of the AMA and the AAMC.

EDIT 2: this paper is more recent (from 2003) and claims that the AMA engages in rent-seeking behavior. It also gives as one of the reasons for the shortage a minimum wage requirement for residents:

The ACGME historically has required that teaching hospitals pay residents a reasonable wage and pay residents in all specialties the same amount. However, the wage that clears the market for residents in pediatrics or family practice may be too high to clear the market for surgical residents... I estimate that medical students would be willing to pay teaching hospitals for residency training in dermatology, general surgery, orthopedic surgery, and radiology. [As opposed to the hospitals paying residents]

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    -1 Your answer depends on DO vs MD being "legally equivalent" which is true in the US but which I'm not sure is relevant.
    – ChrisW
    Commented Jun 17, 2011 at 3:57
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    Could you please explain in the answer what DOs and MDs and LCMRs are? (And medical and osteopathic degrees are legally equivalent in the USA? Can an osteopath prescribe medication?)
    – Oddthinking
    Commented Jun 17, 2011 at 6:26
  • @Oddthinking: I've tried to add more - the point I (unsuccessfully) was trying to make is not that DOs are exactly the same as MDs, but rather that they're so close we would expect demand to be strongly correlated.
    – Xodarap
    Commented Jun 17, 2011 at 13:08
  • @ChrisW: Could you elaborate more? I'm not a medical professional, so I could be wrong, but they sound similar enough that I would expect demand to be approximately the same.
    – Xodarap
    Commented Jun 17, 2011 at 13:08

This issue of the AMA and their dominant role in the LCME is one of a few cornerstones upon which the poor function of America's not-so-free healthcare marketplace rests.

The AMA and the American Assoc. of Med. Colleges essentially control the nomination process of members of the LCME. https://www2.ed.gov/admins/finaid/accred/accreditation_pg7.html#health

Here, two associations with an obvious financial interest in limiting supply hold the reins to a crucial link in the physician supply chain. This is US Dept. of Education policy, not law. It should therefore be able to be fixed at the stroke of the president's pen.

A Washington Post article from the 1970's notes the the Federal Trade Commission's Bureau of Competition went after this issue for basic economic reasons stated above.

The FTC was fought off by the AMA. https://www.consumer.ftc.gov/sites/default/files/100moment_dan-schwartz-2.html?width=500&height=300&iframe=true

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