EXECUTIVE SUMMARY

• National Resident Matching Program (NRMP) matches medical students to residency programs at teaching hospitals for clinical training programs.

• After a 2002 lawsuit, NRMP was granted an antitrust exemption which denied any bargaining rights to residents.

• While dismantling the whole of The Match system is not feasible, it is essential to rethink the antitrust immunity provided to The Match’s program.

INTRODUCTION

A medical residency, as defined by the American Medical Association (AMA), is a supervised clinical training period, which provides physicians/residents with hands-on experience and increasing autonomy in delivering health care under the guidance of experienced attending physicians. One cannot practice clinical medicine or treat patients independently without completing a residency program in most circumstances. For the United States, the National Resident Matching Program (NRMP) matches medical students to residency programs at teaching hospitals for clinical training programs as part of their residency. While the NRMP does a great job of matching labor demand with labor supply, it comes with a trade-off in terms of loss of bargaining power by the residents. This trade-off was the subject of Jung v. Associations of American Medical Colleges, a 2002 class-action lawsuit alleging The Match suppressed the bargaining power of resident, a case that ended not on its merits but through an antitrust exemption granted by Congress.

UNDERSTANDING THE MATCHING ALGORITHM

The NRMP uses an applicant-proposing computerized mathematical algorithm, where applicants rank programs in their order of preference, while hospitals rank applicants based on their preferences. The algorithm then attempts to place each applicant to their highest-ranked program that can accommodate them, taking into consideration the hospital’s ranking and available positions. If the applicant matches the program while the algorithm is working, it is considered a “tentative” match. The matches do not become final until the algorithm has finished working. This creates a coordinated allocation process rather than applicants and hospitals negotiating independently.

ANTITRUST EXEMPTION: Jung vs Association of American Medical Colleges (AAMC)

An antitrust exemption is a legal provision that immunizes specific industries or practices from standard antitrust laws, shielding them from prosecution for coordination or market control relating to that practice. It leads to market inefficiency, causing prices to remain high and quality low. In May 2002, three physicians filed a class action lawsuit against dozens of other teaching hospitals and medical organization (NRMP and AAMC), arguing that the organizations and the hospitals were engaged in anticompetitive behaviors that violated the Section 1 of the Sherman Antitrust Act by forcing applicants into a single, legally binding employment contact without the eligibility to negotiate. Restricting the ability to negotiate left residents with artificially suppressed salaries, locked physicians into grueling work hours, and eliminated free-market job mobility. While the case progressed in the federal court, Congress intervened and passed the Pension Funding Equity Act of 2004, a bill meant to update the interest rates used to calculate employer pension contributions. Tucked into it was Section 207, a rider that had nothing to do with pensions: a blanket antitrust exemption for graduate medical residency matching programs. The provision was lobbied for by the Association of American Medical Colleges (AAMC), a named defendant in the very lawsuit the exemption would end, together with the American Hospital Association creating a federal statutory antitrust exemption for graduate medical matching program, resulting in the federal case being dismissed.

THE CASE FOR GREATER ANTITRUST SCRUTINY

While a centralized structure reduces uncertainty by allocating positions efficiently, it does not necessarily translate into competition in the labor market. Residents essentially do not have any bargaining power under the current terms and conditions of entering The Match. According to the American Medical Association’s national data, the average salary for a first-year resident doctor (PGY-1) in the United States is approximately $68,166 per year in 2025. The nominal salary growth from 2024 was 2.2%, whereas inflation increased by 2.7%, which means there is a dip in real wage annual impact resulting in average hourly wages, and potentially less than the minimum wage of certain states when you factor in the 80 hours per week worked by the residents. The following table shows a comparison of an average nominal income earned by a first-year resident (yearly), nominal wage growth for the typical worker in the United States, and the inflation rate.

Year	Average PGY-1 Salary (Nominal)	Nominal Salary Growth rate PGY-1	Nominal wage growth ratefor average worker	US Inflation Rate (CPI-U)
2022	$60,942	+2.8%	+5.3%	+8.0%
2023	$63,806	+4.7%	+4.4%	+4.1%
2024	$66,741	+4.6%	+4.8%	+3.4%
2025	$68,166	+2.2%	+3.8%	+2.7%

Source: Salary Metrics from annual AAMC survey of resident/Fellow resident and Social Security Administration; Inflation statistics from US Bureau of Labor Statistics

Salaries are gross yearly, and the inflation rate is average yearly.

It is, however, uncertain whether The Match itself is entirely responsible for the depressed wages of residents. In a 2015 paper, economist Nikhil Agarwal finds that even under a competitive wage equilibrium, residents’ willingness to accept lower wages in exchange for desirable training opportunities, combined with capacity constraints, can result in wages lower than their marginal product of labor. Nonetheless, in any condition, retaining broad protection without examining its implications for competition risks overlooking the bargaining disadvantages residents are facing.

CONCLUSION

While dismantling the whole of The Match system is not feasible, it is essential to re-think the antitrust immunity provided to The Match’s program. An antitrust exemption which creates inefficiency in the market by creating wage distortion is not the best option.  A modification which allows the residents to have some sort of bargaining power is the way ahead.