Physician Competition: Entry and Substitution

Joshua D. Gottlieb () and Sean Nicholson ()
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Joshua D. Gottlieb: University of Chicago
Sean Nicholson: Cornell University

No 2026-48, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We describe competition in the physician market, focusing on how entry barriers and substitution possibilities have changed in recent decades. Regulatory caps on medical school seats and residency slots—especially for high-paying specialties—continue to ration entry, generate high returns for those who gain these slots, and direct the most academically accomplished trainees toward lucrative fields. But trained physicians increasingly compete with nurse practitioners, physician assistants, and other mid-level practitioners in the market for patients. Training of these substitutes has expanded far more rapidly than physician supply. We present key facts about the physician pipeline, a conceptual framework linking specialty earnings to entry barriers, and describe the rise of mid-level providers. These facts mean that effective competition policy in physician markets must look beyond conventional concentration measures and focus on the institutions and laws that govern who can provide medical care. Length: 35 pages

JEL-codes: I11 J44 L13 L50 (search for similar items in EconPapers)
Date: 2026
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