The NRMP Match & Federal Antitrust Laws
The National Resident Matching Program (NRMP) arguably functions as an unlawful monopsony that violates federal antitrust laws, undermining fair labor practices at the expense of resident physicians' well-being. Federal antitrust laws, such as the Sherman Act, are designed to prevent companies from colluding to fix prices or salaries, suppress competition, or trap employees in unfair contracts. These laws encourage employers to compete for talented individuals while allowing employees to negotiate wages, benefits, and working conditions. Subsequently, if an employer mistreats an employee, the employee is free to leave for a better opportunity.
The NRMP was established in 1952 to provide an organized system for placing medical school graduates into residency programs. It emerged in response to the challenges posed by many graduates competing for limited internship slots at that time, often leading to chaotic negotiations.
Inspired by the work of economist Lloyd Shapley and mathematician David Gale, the NRMP employs a "deferred acceptance" algorithm. This system allows applicants and residency programs to submit rank-order lists, resulting in stable matches that prevent preference conflicts. Today, the NRMP has expanded to manage over 90% of residency slots in the United States, becoming the primary mechanism for matching physicians with specialty training programs.
After the interview season, residency candidates and training programs submit confidential rank-order lists through the NRMP's R3® system, indicating their preferences. The algorithm then matches applicants to programs.
Consequently, the NRMP traps resident physicians in unfair contracts, creating a power imbalance that heavily favors training programs. This centralized and flawed hiring system eliminates competitive market pressure, leaving resident physicians unable to negotiate salary or benefits, choose freely between multiple programs, or easily leave a toxic program after being matched without jeopardizing their careers. Residents are compelled to accept these binding contracts at their own expense or risk becoming jobless, as very few programs operate outside the match system. This situation is arguably a form of collusion, which would typically violate federal antitrust laws.
In 2002, several resident physicians filed the case of Jung vs. AAMC against the NRMP, the Association of American Medical Colleges (AAMC), and multiple hospitals. The plaintiffs alleged an illegal conspiracy to restrict residents' labor rights and wages. They argued that the matching process eliminates free market competition for medical residents, suppresses wages, and diminishes residents' bargaining power, ultimately violating federal antitrust laws. This case gained significant attention and could have delivered a major blow to the flawed NRMP matching system.
However, in 2004, Congress controversially passed legislation embedded within the Pension Funding Equity Act, following aggressive lobbying from the AAMC and American Hospital Association (AHA) and intense pressure from NRMP leadership. This legislation granted the NRMP Match immunity from federal antitrust laws.
While classified as a nonprofit, the NRMP has revenue of $14.9 million and a profit of approximately $3.6 million, resulting in a 24% profit margin—higher than many for-profit companies. In 2021, the CEO earned $530,000, with many other executives making over $200,000. The NRMP generates revenue from residency applicants and programs each application cycle. Medical students are pressured into this currently unavoidable system, as the Accreditation Council for Graduate Medical Education (ACGME) and AAMC compel training programs to participate in the match. "Match violations" can lead to sanctions threatening the programs' credibility.
Regulatory oversight of the NRMP is limited despite its significant control over residency placements. As a private nonprofit organization, the NRMP operates with indirect oversight from the ACGME and specialty boards that require match participation for accreditation. However, direct federal oversight from agencies like the Federal Trade Commission (FTC) or the Department of Justice (DOJ) has been minimal. The NRMP has largely avoided antitrust scrutiny due to the previously passed exemption buried in the Pension Funding Equity Act.
Increased oversight of NRMP practices by the FTC is essential. A review of NRMP policies under the Sherman Act would evaluate whether current rules restrict competition in the residency labor market, thus adding a vital layer of accountability. Introducing competitive mechanisms, such as optional parallel matching platforms and structured negotiation periods, could provide alternatives to NRMP's binding placements. These options would empower residents to negotiate for fair compensation and better working conditions.
The NRMP's residency match system currently acts as a monopsony, potentially unlawfully limiting competition and resident physician career mobility. This anti-competitive structure leads to inadequate compensation and fosters toxic work environments. It contributes to physician burnout and depression, ultimately jeopardizing patient care. To address these issues, we must unite policymakers, resident physicians, and medical institutions to challenge this flawed and outdated system through research, litigation, and legislative advocacy. By doing so, we can create a residency system that prioritizes the rights and well-being of resident physicians.