Healthcare Workforce Crisis: Federal and State Policy Responses to Shortages and H-1B Visa Restrictions

Healthcare workforce shortages are critically impacting multiple healthcare professions and geographies, threatening access to care and straining existing providers. Pipeline challenges are being increasingly affected by changes to the immigration landscape, including H-1B visa restrictions and increased fees that limit international medical graduate (IMG) recruitment through Graduate Medical Education (GME) programs. Policymakers at the federal and state levels are pursuing varied strategies including expanded training capacity, scope of practice reforms, loan repayment programs and immigration pathway improvements.

Key Takeaways

• The United States faces projected shortages of 86,000 physicians and 200,000+ nurses by 2036.
• Emergency medicine, primary care, psychiatry and rural practice areas face particularly acute shortages.
• H-1B visa restrictions and fee increases have reduced IMG physician recruitment, exacerbating shortages.
• States are pursuing scope of practice expansions for nurse practitioners, physician assistants and other advanced practice providers.
• Federal policies including GME expansion, loan repayment, and visa reforms are in legislative consideration.

Scale and Scope of Healthcare Workforce Shortages

The Association of American Medical Colleges projects a shortage of between 54,100 and 139,000 physicians by 2036, with primary care facing shortages of 17,800 to 48,000 physicians. Emergency medicine is experiencing significant workforce strain, with emergency department visit volumes exceeding capacity while fewer medical students choose emergency medicine careers. Nursing shortages are projected at over 200,000 RNs by 2036, with intensive care, emergency and and perioperative nursing particularly affected.

Geographic disparities are also compounding overall shortages:  rural areas have approximately 68 primary care physicians per 100,000 persons compared to 84 per 100,000 in urban areas. Many rural communities also lack specialty services entirely, particularly obstetrics, psychiatry and surgical subspecialties.

Contributing factors include physician retirement with a significant portion approaching retirement age, training capacity constraints with GME positions and nursing school slots limiting graduate numbers, clinical burnout and attrition accelerated by the COVID pandemic and maldistribution, with the workforce concentrating in certain specialties and geographies.

From a clinical operations perspective, workforce shortages create dangerous conditions: emergency departments experience prolonged wait times and increased rates of patients leaving without being seen, hospitals close units or limit admissions due to inadequate nursing staff and remaining clinicians face unsustainable workloads contributing to burnout, errors and further attrition.

Immigration Policy Impact: H-1B Visa Restrictions and IMG Recruitment

International medical graduates constitute approximately 25% of the U.S. physician workforce and are disproportionately represented in primary care, underserved areas and shortage specialties. Many IMGs enter practice through H-1B temporary work visas, eventually transitioning to permanent residency.

Recent H-1B policy changes have created challenging recruitment headwinds:  a proclamation signed by the President on September 19, 2025 has imposed a new H-1B visa fee of $100,000 for every new H-1B petition for beneficiaries located abroad. Additionally, cap limitations restrict H-1B visas to 85,000 annually across all industries, with healthcare competing against technology and other sectors. Delays in visa processing have also extended timeline uncertainty, all of which is creating difficulty in the healthcare sector.  These restrictions disproportionately affect rural hospitals that rely heavily on IMG physicians, safety-net systems in urban areas dependent on IMGs for primary care and specialty services, academic medical centers recruiting IMG faculty and researchers and facilities in states with smaller IMG populations. These health systems often operate on very low or negative margins, which may prohibit absorbing the increased fee. The American Hospital Association and other interest groups have called on the Administration to exempt health care personnel from the proclamation.

Healthcare organizations employing H-1B physicians should plan ahead for visa application timelines and cap limitations, budget for increased legal costs and explore alternative visa categories, including J-1 Conrad 30 waiver programs for medically underserved areas.

Graduate Medical Education Expansion and Funding

Graduate medical education—physician residency and fellowship training—is funded primarily through Medicare GME payments. Medicare GME caps, established in 1997, have limited expansion of training positions. The Balanced Budget Act of 1997 capped Medicare-funded residency positions at 1996 levels, creating a structural constraint on physician supply.

The Consolidated Appropriations Act of 2021 added 1,000 Medicare-funded residency positions over five years, distributed with priority for hospitals in rural areas, underserved areas and training primary care and psychiatry residents. However, this increase falls short of projected workforce needs.  Federal legislative proposals to further expand GME include the Resident Physician Shortage Reduction Act, which would add 14,000 Medicare-funded residency positions over seven years. The legislation has bipartisan support but faces budgetary concerns.

State-level GME funding has emerged as an alternative. Several states have created state-funded GME programs, including New York's Doctors Across New York program providing $1.5 billion over 10 years, California's Song-Brown Program funding primary care residencies and Texas programs supporting GME expansion in underserved areas.

Scope of Practice Reforms and Advanced Practice Provider Utilization

States regulate scope of practice for healthcare professionals, creating variation in what services different providers can deliver independently. Approximately 25 states have enacted full practice authority for nurse practitioners (NPs), allowing independent practice without physician supervision. Other states require physician collaboration or supervision.

Proponents of expanded scope argue that NP independent practice increases access to care, particularly in rural and underserved areas, reduces costs by enabling advanced practice providers, including NPs and physician assistants, to practice to the full extent of their training and addresses physician shortages by leveraging existing workforce.

Physician organizations have expressed concerns, however, about training differences, patient safety implications without physician oversight and care coordination challenges. Research on scope of practice effects shows mixed results, with some studies finding comparable outcomes for certain primary care conditions, while other research identifies differences in care patterns and diagnostic testing.

Loan Repayment and Financial Incentive Programs

The National Health Service Corps (NHSC) provides loan repayment of up to $50,000 for clinicians committing to multi-year service in federally designated Health Professional Shortage Areas (HPSAs). State loan repayment programs often match NHSC funding, with some states offering additional incentives.

Public Service Loan Forgiveness (PSLF) provides loan forgiveness for individuals working in qualifying public service jobs, including nonprofit healthcare organizations. After 120 qualifying payments, the remaining federal student loans are forgiven. Recent reforms have streamlined the program and increased successful forgiveness applications.

Rural Healthcare Workforce Strategies

Rural healthcare workforce challenges are particularly acute, with recruitment and retention difficulties stemming from professional isolation, limited subspecialty support, fewer spousal employment opportunities and cultural adjustments.

Federal and state policies addressing rural workforce include Rural Health Clinic designation, providing enhanced Medicare and Medicaid reimbursement, Critical Access Hospital status providing cost-based Medicare reimbursement and HRSA Rural Health programs including recruitment and retention grants.  Telemedicine has emerged as a workforce multiplier for rural areas, enabling rural facilities to access specialist consultation without recruiting specialists locally, though permanent federal telehealth reimbursement policies are still under consideration.

Rural healthcare organizations should leverage federal and state rural health programs, develop partnerships with academic medical centers for telemedicine and clinical support, create pipeline programs recruiting students from rural areas more likely to practice in rural areas and consider comprehensive compensation packages including loan repayment and housing assistance.

Nursing Workforce Challenges and Policy Responses

Nursing shortages affect all care settings but are particularly acute in hospitals, long-term care facilities and home health. Contributing factors include nursing school enrollment capacity limits due to faculty shortages, high turnover rates driven by burnout and inadequate staffing, an aging workforce with significant impending retirements and competition from non-clinical nursing roles.

Policy responses include nursing school capacity expansion through federal grants, faculty development programs to address nursing educator shortages, apprenticeship and career ladder programs, mandatory staffing ratios in some states, workplace safety regulations addressing violence and injury risks and immigration pathways for internationally educated nurses.

Healthcare organizations face immediate staffing challenges requiring operational responses including retention programs with competitive compensation and scheduling flexibility, travel and contract nursing to fill gaps (though at higher cost), internal talent development including tuition assistance, workflow optimization and technology to reduce non-clinical burden, and workplace culture initiatives addressing burnout.

Immigration Reform Proposals: Beyond H-1B

Beyond H-1B visa issues, broader immigration reforms could address healthcare workforce needs. Proposals include exempting physicians from immigrant visa caps, creating a healthcare-specific visa category with expedited processing and streamlining J-1 waiver processes for international medical graduates.

The Healthcare Workforce Resilience Act, introduced in recent Congresses, would recapture unused immigrant visas and allocate 40,000 to physicians and 25,000 to nurses. The legislation had bipartisan support when it was first introduced but has not been enacted and currently has only a few co-sponsors in Congress.

Healthcare organizations and professional associations should engage in immigration policy advocacy emphasizing workforce needs and documenting the stories of IMG physicians serving underserved communities.

Looking Forward:  Implications for Healthcare Stakeholders

• Healthcare Organizations and Health Systems: Develop comprehensive workforce plans addressing recruitment, retention and pipeline development while efficiently utilizing advanced practice providers within the scope of practice regulations. It is also critical to leverage loan repayment and financial incentive programs to recruit new physicians while investing in retention strategies to address burnout over time.
• Medical Schools and Teaching Hospitals: Expand residency training capacity where GME funding allows and develop an advocacy strategy to expand GME training slots with rural and underserved training tracks. State-level GME funding opportunities represent a growing area of interest and potential funding source.  Distributed training models with community hospitals are likely to be an area of increased GME reform in the future.

• Professional Associations: Advocate for workforce policies supporting members' practice needs and develop evidence on workforce shortages and policy solutions. Engage in scope of practice debates with a focus on patient access and safety, and evaluate pipeline development through scholarships and mentorship opportunities.

Healthcare workforce challenges threaten access to care and quality of services across the United States. Addressing shortages requires coordinated action across multiple policy domains, including medical education, immigration, scope of practice and financial incentives.  Akin's healthcare policy and regulatory practices can advise clients on legislative advocacy and operational responses to these workforce shortages and changes in immigration policy.