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The conversation around The Match has been artificially flattened into a false binary. That we can either keep the system as is, or dismantle it entirely. But that’s not how labor markets work. It’s also not how reform happens.
What’s actually at stake is whether we continue to tolerate a system that centralizes power and suppresses competition, or we begin to introduce targeted friction. No one is calling for lawlessness, just enough change to restore agency to residents without collapsing coordination.
Because right now, the core critique is clear:
- The Match functions as a highly centralized labor allocation system
- It limits negotiation, mobility, and wage discovery
- And, per recent Congressional reporting, may exert monopolistic control that constrains the physician workforce and suppresses competition
Meaningful change to the current system will likely take years, but this is the time that we should be organizing and advocating for better alternatives. Let’s consider some of them.
1. Early Offer Windows With Guardrails
What it is:
A limited pre-Match period where programs can extend offers outside the algorithm, similar to early decision in college admissions.
What it does:
Right now, every applicant is artificially synchronized into a single decision point. That suppresses leverage.
Allowing early offers (with caps and transparency requirements) would:
- Reward high-signal applicants
- Force programs to compete earlier
- Introduce real-time price discovery (salary, benefits, culture)
Risk: Advantage for insiders + “early pressure creep”
- Well-connected applicants (home programs, top schools) may disproportionately benefit
- Programs may start informally signaling or pressuring applicants before the official window
- Could recreate a quieter version of the same inequities we already see
Guardrails could include:
- Limits on % of positions filled early (e.g. 20–30%)
- Mandatory offer windows (no “exploding offers”)
- Public reporting of terms
This preserves coordination while injecting competition upstream.
2. Non-Binding Match (College Sports Recruiting Model)
What it is:
The Match becomes advisory rather than binding. Applicants can receive multiple offers and choose over a defined period, similar to college sports recruiting.
What it does:
The current binding system eliminates negotiation before it begins.
A non-binding system would:
- Allow applicants to hold multiple offers
- Enable real negotiation on salary, benefits, and structure
- Force programs to compete, not just rank
Risk: Decision chaos + prolonged uncertainty
- Applicants may feel overwhelmed managing multiple offers
- Programs may over-offer to hedge
- Decision timelines may stretch and create anxiety
Guardrails could include:
- Standardized acceptance deadlines
- Tiered offer rounds
- Clear communication expectations
This version would definitely be less clean, but far more reflective of a true labor market.
3. Standardized Contracts With Introduced Negotiable Components
What it is:
A universal baseline contract (salary floor & benefits) with defined areas for negotiation.
What it does:
Current contracts are effectively non-negotiable.
Standardization with flexibility would:
- Protect residents at baseline
- Allow differentiation through:
- Signing bonuses
- Housing stipends
- Research time
- Schedule flexibility
- Loan pay-backs
Risk: Two-tiered system
- Top applicants secure better terms
- Others remain at baseline
- Perceived inequities may widen
Guardrails could include:
- Strong baseline protections
- Transparency around negotiated components
This introduces variation, but also makes the system more honest.
4. Mobility Pathways Between Programs & Specialties
What it is:
Structured pathways for residents to transfer programs, switch specialties, or exit misaligned environments. A standard transfer portal that is easy to navigate and transparent.
What it does:
Current mobility is limited, opaque, and often discouraged. Residents who start looking (or subtly interviewing) at other programs, or requesting letters of recommendation, are at real risk of retaliation from their current departments without any guarantee of successful transfer. There is incomplete, fragmented information about open opportunities nationally.
Improved mobility via standardized transfer portal would:
- Increase accountability for programs - they’re incentivized to improve working conditions if they don’t want to lose their best trainees
- Reduce fear-based compliance or resignation to feeling trapped
- Allow better long-term alignment between trainees and programs
Risk: Instability + “transfer culture”
- Programs may struggle with retention
- Residents may “trade up” mid-training
- Continuity of training may be disrupted
Guardrails could include:
- Defined transfer windows
- Clear policies and caps
- Protections against retaliation
Mobility creates accountability from programs. It can also introduce some instability, but with strict training requirements in place, should not affect quality of training. If anything, diversity of training from different institutions would be expected to breed innovation and more well-rounded physicians.
5. Regional or Specialty-Based Matching Systems
What it is:
Decentralizing the Match into smaller, regional or specialty-specific systems.
What it does:
A single national system maximizes coordination, but also centralizes control.
Decentralization would:
- Allow for experimentation
- Introduce variation in compensation and structure
- Reduce systemic rigidity
Risk: Fragmentation + geographic inequity
- Wealthier regions may outcompete others
- Physician distribution disparities may worsen
Guardrails could include:
- Federal/accreditation oversight
- Incentives for underserved areas
Decentralization increases innovation, but could result in long term inequity based on geographic and economic factors.
6. Parallel Direct-Hire Pathways
What it is:
Allow programs to fill a portion of positions outside the Match through direct hiring.
What it does:
Right now, participation in the Match is functionally mandatory. To receive funding, programs must fill resident positions through the NRMP.
A parallel pathway would:
- Introduce real competition
- Allow programs to differentiate
- Provide an alternative route for applicants
Risk: System bifurcation
- Top candidates may bypass the Match entirely
- A two-track system could emerge
Guardrails could include:
- Caps on direct-hire positions
- Maintaining a strong central Match alongside it
Why not both a Match and Direct-Hire? Competition only strengthens the system.
An Important Note About GME Funding
The economics of teaching hospitals and institutions are quite complex, and also quite obscure. As most residents should know, residency programs are federally funded. But residents are not paid directly from federal funds. Instead, the institutions are funded, and in turn pass on a portion of that funding to residents. It is easy to think that “the hospital pays me.” But that’s actually not true.
Understanding how residents are currently paid is critical to understanding the flaws in the current system.
Institutions receive 2 forms of payment from the federal government (primarily funded through Medicare): DGME (Direct Graduate Medical Education) and IME (Indirect Medical Education).
DGME covers salary and benefits, faculty teaching time and administrative and program costs. The formula for determining this amount is referred to as PRA, per-resident-amount, and adjusted by the number of residents and Medicare patient load. But here is the important part, per the CMS.gov website. “[M]ethodology for the determination of a hospital-specific, base-period per resident amount (PRA) that is calculated by dividing a hospital's allowable costs of GME for a base period by its number of residents in the base period. The base period is, for most hospitals, the hospital's cost reporting period beginning in FY 1984 (that is, the period of beginning between October 1, 1983, through September 30, 1984).”
The PRA is calculated based on a fiscal year 1984 reporting period. This is not market-based. It is a legacy calculation, from over 40 years ago.
IME is the part that most people do not understand, and it is actually the more important one. IME is paid to hospitals to account for ‘higher costs’ of teaching hospitals, more complex patients, and inefficiencies of training environments. It is not tied to resident salaries and it is much larger than GME. Approximately 70% of GME funding is IME.
This means that most of the money tied to residency programs are not required to be spent on residents. IME flows directly to institutions, can boost hospital revenue, and is justified simply because residents exist. There are strikingly few studies reliably showcasing the monetary benefit that residents provide for a hospital system, but even a conservative estimate from this study in 2016 concludes that, “The total estimated financial contribution per resident per year was $94,871.89.” This means institutions not only derive real economic value from each resident, but also receive substantial additional funding through IME.
In FY2015, Medicare provided funding of $112,000 - $129,000 per resident (Medicaid does not require states to report their data). Per the AMA in November of 2025, the average first-year resident physician makes about $60,000. Even using data that is over 10 years old, it would appear that institutions are passing on just about half of the funding that they receive to residents, if not less in many cases. This structure allows institutions to capture significant surplus value, keeping resident physician salaries suppressed, while denying residents the ability to negotiate.
The ‘Fixed Years of Funding’ Myth
Residents are told that they only have X years of funding. This is partially true, but also misleading. DGME reimbursement is only provided for the ‘Initial Residency Period’, or the amount of years it should take to complete a residency in a specific specialty (typically 3 or 5 years). During that ‘IRP’, institutions receive 100% of the DGME and IME for the individual resident. After the IRP, DGME drops to 50%, while IME continues at 100%.
If a resident completes an unrequired prelim year or changes specialties, they will likely exceed the IRP. Yet if the institution receives $130,000 to fund this resident’s position during the IRP, they would still receive $110,500 post-IRP (100% of $91,000 or 70% of the total GME funding per IME, and 50% of $39,000, the DGME portion). Considering average resident salaries are far less than $110,000, there should be no issue providing funding beyond the IRP.
This means that while it is slightly more expensive for hospitals to take residents who have exceeded their IRP, it is by no means a serious financial burden or even a net-loss. In fact, institutions should still greatly benefit from the arrangement.
So while this GME funding system is deeply flawed and absolutely needs to change, it should not be used as an argument against resident mobility or wage improvements. Resident physicians are highly valuable to hospital systems, yet the deck has been stacked against them. They are forced into the system through a blatantly monopolistic program, denied market value rates through a funding calculation established nearly a half-century ago, and given no ability to negotiate or seek alternative paths.
The current model of physician training is not equitable. Do not let anyone tell you otherwise.
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