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The number of residency slots (a legal requirement to be a doctor) is limited because it's funded by Medicare and only Congress can increase it. AMA (American Medical Association) has lobbied to keep it that way.

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Is there some legal obstacle to some entity other than Medicare funding it?

not really, but private funding is generally pretty controversial with weird incentives (e.g. a company may only fund for positions that will create demand for their products--like a skincare company only funding dermatologists) [1]

don't think many other entities besides the federal government have a ton of incentive to fund residency. and the federal government does have caps on residency slots

[1] https://slate.com/technology/2005/06/private-funding-for-res...

What about state governments?

States do fund residency. This site says that state matching of federal Medicaid funds is ~12% of the total funding: https://mostpolicyinitiative.org/science-note/state-supporte....

Interesting related thread: https://www.reddit.com/r/Residency/comments/a01cfr/funding_y...

they contribute already, but it's more challenging than federal. many residents do not stick around in the state they train in, so states have less incentive to fund this

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