Ever since 1997, when the federal Balanced Budget Act froze Medicare’s overall funding for graduate medical education, debates have flared regularly over whether and how the U.S. government should support medical resident training.
Discussions about the possible redistribution of billions of dollars are bound to make people nervous, but the controversy reached a fever pitch in 2014 when the Institute of Medicine released a report penned by a 21-member committee that recommended significant—and contentious—changes to the existing graduate medical education (GME) financing and governance structure to “address current deficiencies and better shape the physician workforce for the future.”
Should Medicare shake up the system to redistribute existing training slots to where they’re needed most, as the report recommends? Should it instead lift its funding cap to avert a potential bottleneck in the physician pipeline, as several medical associations have requested? One year later, the report has gained little traction amid a largely unchanged status quo that few experts believe is ultimately sustainable. The continuing debate, however, has prompted fresh questions about whether the current GME structure is adequately supporting the nation’s healthcare needs and has spurred widespread agreement on the need for greater transparency, accountability, and innovation.
Deborah Powell, MD, dean emerita of the University of Minnesota Medical School and one of the report’s co-authors, says she has seen firsthand the challenges arising from a lack of physicians in multiple specialties, especially in rural areas. “We believed that simply adding new money to a system that is outdated would not solve the issues in physician education and physician workforce,” she says.
Some HM leaders and other physicians’ groups have cautiously welcomed the report’s focus on better equipping doctors for a rapidly changing reality.
“It wasn’t wrong for them to look at this,” says Darlene B. Tad-y, MD, FHM, chair of the SHM Physicians in Training Committee and assistant professor of medicine at the University of Colorado in Denver. “And it’s probably not wrong for them to propose new ways to think about how we fund GME.”
In fact, she says, efforts to align such funding with healthcare funding in general could be timely in the face of added pressures like ensuring that new insurance beneficiaries have access to primary care.
Scott Sears, MD, FACP, MBA, chief clinical officer of Tacoma, Wash.-based hospitalist management firm Sound Physicians, says healthcare is also moving rapidly toward managing populations as part of team-based care that increases quality while lowering costs. So why not better align GME with innovative Medicare initiatives like bundled payments, he asks, and then use the savings to reward those training programs that accept the risk and achieve results?
“Shifting some of our education to match what Medicare is trying to drive out in the real world, I think, is long overdue,” Dr. Sears says.
Other groups, such as the Association of American Medical Colleges, however, contend that the report’s prescriptions are far less helpful than its diagnoses. “Politically, there’s just stuff in there for everybody to hate,” says Atul Grover, MD, PhD, FACP, FCCP, the AAMC’s chief public policy officer. “I think [the IOM report] did a decent job of pointing out some of the things that we want to improve moving forward, but I’m not sure that the answers are quite right.”
An Uneven Funding Landscape
The strong opinions engendered by the topic underscore the high stakes involved in GME. Every year, the federal government doles out about $15 billion for residency training, including about $10 billion from Medicare coffers. Medicare’s share is divided into two main funding streams that flow primarily to academic medical centers: direct graduate medical education (DGME) and indirect medical education (IME) payments. The first covers training expenses, while the second reimburses teaching hospitals that care for Medicare patients while training residents.