Indiana ranks 42nd in physician supply and trains residents and fellows at barely half the national rate; report urges greater state investment and stronger physician retention efforts

Indiana is experiencing a physician shortage that is projected to worsen and further limit access to necessary medical care unless there is significant investment and expansion in physician residency training and efforts to retain doctors who train in the state, according to a new report from the Indiana Business Health Collaborative (IBHC). 

The report – A Strategy for Strengthening Indiana’s Physician Workforce – finds that Indiana ranks 42nd nationally in physician supply, with just 239 active physicians per 100,000 residents compared with the national average of 304. Federal workforce projections estimate that Indiana currently has a shortage of approximately 6,380 full-time-equivalent physicians relative to modeled demand, a gap projected to be approximately 7,150 by 2032. 

Indiana also substantially lags behind the nation and neighboring states in physician residency training. During the 2024-25 academic year, approximately 1,542 physician residents and 267 physician fellows trained in Indiana, equivalent to just 26 per 100,000 population – barely half the national rate of 49. Every neighboring state trains more physicians relative to its population with rates ranging from 37 per 100,000 in Kentucky to 77 per 100,000 in Michigan. 
This report warns that the existing shortage could worsen as competition with other states to recruit and retain future physicians increases as states work to address the ongoing national shortage. 

“Without substantially increasing the number of physicians Indiana trains and retains, 
Hoosiers will face increased limitations in access to medical services. The ripple effect is long-term consequences to community health outcomes, health care affordability, and economic competitiveness,” said Beth Lock, CEO/Executive Director of the IBHC. 

A Multifaceted Strategy to Address Physician Workforce Supply 
Graduate medical education (GME) is the hands-on, specialty-specific, supervised clinical training that physician residents complete after graduating from medical school. The cost to train a physician is approximately $200,000 annually, putting the current estimated direct cost of residency training for 1,540 residents statewide at more than $300 million a year. 

Hospitals and health systems contribute substantially to physician training. An IBHC analysis estimates that Indiana hospitals and health systems contribute between $170 million to $200 million annually towards these direct costs, while state and federal sources of funding cover the balance. 

Since 2017, the state has invested more than $49.5 million in GME grants, supporting nearly 15 new GME programs and 309 resident physician training slots. However, demand for support has outpaced available state funding, particularly in recent years as medical schools continue to increase the number of graduates, institutions work to continue existing programs, and new programs are developed. 

The Indiana GME Board estimates that nearly $36 million is needed annually to sustain ongoing residency programs and expand new programs, compared to historical biennial appropriations of approximately $14 million. The report recommends, as a first step to in a multi-year strategy to increase the number of physicians in Indiana, increasing the GME appropriation in the state 2027-2029 biennium budget to narrow the funding gap and support necessary physician resident training programs across the state. 

“There is no silver bullet to eliminating the physician shortage, but urgency is required and meaningful work can be done now to prevent further erosion of health care access in the state,” said Lock. 

Other recommendations in the report include: 

• Targeting GME investment and expansion to programs and areas where physicians are most needed, including primary care; emerging specialty shortages; and rural or underserved communities.
• Improving retention efforts through enhanced loan repayment incentives, recruiting residents with Indiana ties, supporting international medical graduates who want to practice in Indiana, and expanding stipends for physicians to practice in underserved areas.
• Tracking and analyzing metrics to inform future funding decisions that keep pace with medical school expansion, demographic trends, physician retirements, areas of need, specialty shortages, and the success of retention incentives.
• Evaluating complementary strategies to more effectively utilize physicians, including team-based care, expanded use of advanced practices clinicians, AI-enabled productivity tools, and clinical innovations.