COMMENTARY
Reconsidering GME funding
BY JOHN C. JENNINGS, MD With predictions of significant fu- ture physician workforce shortages, Texas has increased the number of medical school graduates through approval of new medical schools and increases in existing schools’ class sizes. However, the number of graduate medical education (GME) residency slots has not increased proportionately. This year, more than 20,000 graduates of U.S. medical schools applied to the National Resident Matching Program, and hundreds of U.S. graduates were left without residency positions. One basic problem is funding mechanisms are not in place to produce the GME positions to accommodate the growing numbers of medical students. Addressing the physician workforce shortage goes beyond graduating more medical students. It’s also a mat- ter of providing appropriately trained numbers of specialists and primary care physicians to meet population needs through GME.
John C. Jennings, MD
Medical schools can help by direct- ing students into areas of practice in which the student’s individual inter- ests and talents can be maximized to fulfill health care needs. Our medical education system has produced large numbers of specialists and fewer pri- mary care physicians. Compounding the problem is a geo- graphic maldistribution, with four of five new physicians going into practice areas already oversupplied with physicians. Beyond medical school, GME is abso- lutely necessary to generate the finished- product physicians who practice high- quality, patient-centered care, perform ef- fectively in multidisciplinary teams, and extend access to areas of need. Our cur- rent system of GME is dependent upon a limited number of resources for financing. Medicare pays the largest portion of GME costs by directly reimbursing teaching hospitals a pro rata share of those costs. Medicaid funding for GME costs links
to state workforce policy goals and varies dramatically from state to state. Other lesser sources include the Department of Defense, Veterans Affairs, the Health Resources and Services Administration, and the National Institutes of Health. Some third-party payers give indirect GME support through higher reimbursement for teaching hospitals, but the majority of in- surers, while benefitting from the GME pipeline, do not con- tribute directly to financing GME.
The Balanced Budget Act of 1997 capped the number of
resident positions funded by Medicare. The direct GME pay- ments for residency are intended to compensate for costs, in- cluding resident and faculty salaries. Indirect medical education (IME)
The time has come
to reengineer GME funding.
payments are partial compensation to teaching hospitals for higher pa- tient care costs associated with medi- cal education. Although the amount of funding provided through Medi- care IME has been steadily declin- ing, the current Medicare Payment Advisory Commission now suggests a 50-percent cut.
The rationale for cuts in IME is based upon decreasing the uninsured population through the Affordable Care Act, with a resultant increase in
patient revenue for teaching hospitals. The increase in patient revenue supposedly diminishes the need for designated IME. A large number of the accredited sponsoring institutions of U.S. residency programs, however, are not hospitals but rather uni- versities or other educational entities, all of which necessarily contract with the teaching hospitals for GME funds. The increased patient revenue from the previously unin-
sured goes into the general operational hospital revenue, rath- er than being designated for support of teaching programs. The lack of specifically labeled educational funds puts GME support in direct competition with other operational needs of hospitals. The potential unintended consequences of this change in funding streams can create less incentive for teach- ing hospitals to cover the balance of unreimbursed GME costs and a negative incentive to create new resident positions.
September 2014 TEXAS MEDICINE 53
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