The physician shortage isn’t what you think it is.

Every conversation about the physician shortage eventually lands on the same set of solutions. More residency slots. Expanded medical school capacity. Faster pathways for internationally trained doctors. These are real levers, and they should be pulled. But there’s a second problem running alongside the supply problem that almost nobody talks about. And unlike the pipeline, it’s solvable right now.

The number everyone knows

The AAMC projects a shortage of up to 86,000 physicians in the United States by 2036. The National Center for Health Workforce Analysis puts the current gap at over 96,000 FTE physicians in 2026. Those numbers travel through every healthcare conference, every workforce policy brief, every hospital board presentation about access to care. The response is predictable: we need to train more doctors. And that’s true. But training a physician takes a decade. The shortage is compounding today, through a mechanism that has nothing to do with the pipeline.

The number almost nobody talks about

Once a physician completes training and accepts an offer, the clock starts. What most people outside healthcare administration don’t realize is what that clock actually measures. It doesn’t measure when the physician sees their first patient. It measures when the paperwork begins.

A recruited physician spends 90 to 120 days unable to bill or see patients while credentialing and payer enrollment run their separate clocks. Those clocks don’t synchronize. Primary source verification takes 30 to 60 days. Payer enrollment runs another 60 to 120 days on top of that. State licensure boards add another 30 to 90. Hospital privileging committees meet on their own schedules and can add weeks at a single stage. Every step restarts from scratch at every institution, for every payer, in every state.

According to 2026 revenue cycle data from Medallion’s State of Payer Enrollment and Medical Credentialing report, 69% of health systems report losing $1,000 to $5,000 per provider per day due to payer enrollment delays. A hospital onboarding five new providers simultaneously is looking at roughly $250,000 per month in revenue gaps during that window. One in five hospitals loses more than $1 million annually to credentialing delays, per a 2025 industry survey of over 500 provider-based organizations cited by Neolytix and corroborated by Qualigenix’s 2026 analysis.

The physician is ready. The system keeps them idle.

You are paying locum rates to cover a credentialing backlog

This is the part that tends to land hard in the room.

When organizations can’t get a permanent physician through credentialing fast enough, they extend locum coverage to maintain service levels. The locum tenens market reached $10.2 billion globally in 2025, according to Mordor Intelligence, and North America accounts for more than half of that spend. A meaningful portion of it exists because administrative inefficiency is delaying the permanent providers who were already recruited, already licensed, already ready to work.

The locum bill is the credentialing delay made legible on a balance sheet. Organizations rarely attribute it that way in operational reviews, which is why the connection between administrative throughput and staffing cost stays invisible.

This is a throughput problem

Here’s the reframe: a portion of what presents as a supply shortage is actually a credentialing throughput problem.

The physicians exist. They’ve been trained and recruited. They’re sitting in onboarding workflows, waiting for committees to meet and payers to process applications containing information that was already verified somewhere else in the system. The AAMC shortage is structural and won’t be fixed fast. But the throughput problem is operational, and the throughput problem is happening today.

There are roughly 1 million licensed physicians in the United States. When a physician changes health systems, picks up a locum assignment, adds a new payer relationship, or begins seeing patients across state lines via telehealth, the credentialing cycle restarts. Industry data and credentialing process research consistently document that a physician re-verifies credentials at ten or more institutions across the course of a career transition, not because the credential changes, but because nothing in the current stack gives the credential a persistent identifier, a tamper-evident trail, and a life of its own across systems.

The Interstate Medical Licensure Compact now lets a physician be licensed in 40-plus states, which is a genuine structural improvement. That same physician still needs to file 40 to 80 separate payer applications per common industry estimates, each running 90 to 150 days.

The compact solved the license. The credential still doesn’t travel.

Why the system keeps producing this result

The credentialing model was built for a different era of medicine. Physicians stayed at institutions for careers. Payer relationships were stable. Verifying credentials once, at one place, for one network made sense for that world.

That world is structurally different now. Physicians move, take telehealth assignments across multiple states, work multiple payer networks simultaneously, and pick up locum shifts between permanent positions. But the verification infrastructure didn’t change when the practice patterns did.

Every new institution, every new payer, every new state assignment triggers a full re-verification cycle because there is no shared layer that lets organizations trust work that another organization already did. CAQH operates as a centralized database, not a portable record. It holds credentials in one place, but a hospital querying CAQH still receives data it then re-verifies itself, because the credential has no persistent chain of custody that follows the physician from source through every downstream use. Prior authorization denials were up 31% year-over-year in 2026, per revenue cycle analysts at Medonix and Medical Billers and Coders, while the underlying verification infrastructure that could reduce those denials has seen no comparable structural improvement.

The bottleneck isn’t bad intent. It’s the absence of a record architecture designed for a mobile physician workforce.

What this signals to operators and investors

For operators: the exposure is quantifiable and it’s in your current workflow. 61% of practices carry an active credentialing lapse right now, and 78% of those lapses go undetected for more than 60 days. That’s not a process inefficiency sitting off to the side. That’s a revenue and compliance risk inside most health systems today.

For investors: the credentialing market is large, broken in a documented way, and structurally resistant to point solutions. The reason it hasn’t been solved is that it requires infrastructure, not software. Nobody has built the portable, verifiable record layer that lets a credential travel with a physician the way a passport travels with a person. EHRs weren’t designed for portability. Credentialing software vendors automate the existing workflow without changing the underlying verification model. That’s why revenue cycle data keeps showing the same losses year after year while the software stack around it keeps growing.

The architecture that fixes it

CREDxID™ is UMxID™’s physician and employee credentialing vertical. The model is straightforward: a physician’s credential, once verified, is wrapped in a cryptographically sealed record with a persistent identifier. That record travels with the physician. A new institution, a new payer, a new state assignment doesn’t trigger a full re-verification cycle. It triggers a confirmation that the record exists, is current, and is valid. Primary source verification happened. The results are portable.

The record travels. The source system stays.

Non-custodial. The physician controls the record. The institution accesses what it needs with selective disclosure. No central repository. Regulation-aligned from the first design decision. We have 9 working prototypes, an active institutional engagement with a top 20 U.S. regional health system at the CMO and IT leadership level, and a non-provisional patent family spanning 40-plus verticals, patents pending.

The race is already underway

TEFCA went live. The 21st Century Cures Act is now enforceable. Regulatory tailwinds that were theoretical two years ago are now operational requirements.

Organizations that move first on portable credential infrastructure will have a structural advantage in provider onboarding speed, payer enrollment timelines, compliance posture, and locum cost reduction. The ones that wait will keep solving the same throughput problem the same way, at the same cost, against a workforce that’s increasingly mobile and a regulatory environment that’s increasingly demanding.

The physician shortage is real. The pipeline solution takes a decade. The throughput problem is also real, and it’s solvable now.