The Financing of Graduate Medical Education in the US –
A position of the Council of Medical Specialty Societies

Recommendation:

The Council of Medical Specialty Societies (CMSS) recommends that increased financial support for Graduate Medical Education (GME) and expansion of the number of GME trainee positions be based on the needs of the US population for its physician workforce, with the allocation of positions across regions and specialties in alignment with physician workforce needs.

Preamble:

With the implementation of the Affordable Care Act in 2014, bringing more than 30 million additional Americans into the health insurance and health care delivery system, coupled with the needs of a growing aging population, now is the time to bolster, rather than undercut, the system of GME financing which supports the training of physicians to serve the people of the US.

Having established a National Workforce Commission, Congress should support that Commission to do the work Congress has requested of it, and should not act on GME financing until that Commission has had the opportunity to report to and advise Congress.

Having asked the Institute of Medicine (IOM) of the National Academy of Sciences (NAS) to study Graduate Medical Education in the US, Congress should await that IOM Committee’s report, anticipated in May of 2013, before acting on GME Financing.

Having established the Council on Graduate Medical Education (COGME), which has created more than twenty reports, Congress should seek advice from COGME before acting on GME financing.

When Congress considers the financing of Graduate Medical Education in the US, all payers of health care services, not just Medicare, should be considered to fund necessary GME to produce the physician workforce needed by the US population.

Background:

Proceedings of the May 10, 2012 Conference on the Financing of Graduate

Medical Education (GME) in the United States

INTRODUCTION

In January of 2012, interviews were conducted with the member organizations of the Council of Medical

Specialty Societies (CMSS), revealing that Graduate Medical Education (GME) financing was an important issue to address in 2012. This information was brought to the attention of the Workforce Leads of the CMSS Member Organizations and the Organization of Program Directors Associations (OPDA). Both groups collaborated on a GME Financing Conference, held on May 10, 2012, in the SAX Hotel, Chicago, Illinois.

The conference addressed the following objectives:

  • Provide specialty society representatives with the latest information on the current issues in GME financing
  • Discuss GME financing and its relationship to the nation’s physician workforce
  • Identify an action plan and outcomes to have a positive influence on the future state of GME funding

To address those three objectives, conference participants used a workshop format to move toward the creation of a series of “talking points” that would:

  • Serve as a call-to-action
  • Clarify the issues and concerns of both the medical community and public
  • Serve as a blueprint for the future of GME funding
  • Provide a case for continued public support for GME

BACKGROUND

The current system of GME funding in the US is based on a limited number of sources for payment. The primary sources presently include:

  • Medicare – the largest portion of GME costs are paid by directly reimbursing teaching hospitals a pro-rata share of those costs (over $9 billion annually)
  • Medicaid – although voluntary, many states fund some level of GME costs often using Medicare methodology and linking funds to state workforce policy goals (over $3 billion annually). Funding varies drastically by state, while the recession has caused a number of states to either reduce their contributions to GME or to end contributions entirely.

Other entities contribute some funding each year to support GME, including:

  • Department of Defense – military residency programs
  • Veteran Affairs – residency education based in VA hospitals and clinics
  • Health Resources and Services Administration (HRSA) – supports programs through the Public

Health Service Act

o  Children’s Hospitals Graduate Medical Education Payment Program
o  Teaching Health Centers GME Program (section 5508 of the Affordable Care Act)
o  Title VII, Section 747 – Primary Care Education

  • National Institutes of Health (NIH) – sponsors a limited number of subspecialty programs and some residents’ research activities
  • (Some) Third party payers – indirect GME support through higher reimbursement for teaching hospitals
  • Teaching hospitals and/or faculty practice plans – cover the balance of unreimbursed GME costs
  • Pharmaceutical companies – support a small number of sub-specialty fellowship positions
  • Specialty societies and foundations – support a small number of fellowship positions
  • The majority of insurers, while benefitting from the nation’s GME enterprise, do not contribute directly to the financing of it.

Medicare financing for GME is made in two payment vehicles. Direct GME payments (DGME) partially compensate for the direct costs of GME that can be captured, including resident and faculty salaries and benefits ($3 billion).  Indirect Medical Education (IME) payments partially compensate for higher patient care costs in teaching hospitals ($6 billion).  The number of resident positions funded by Medicare (DGME) was “capped” in 1997 by the Balanced Budget Act (Public Law 105-83). The amount of funding provided to teaching hospitals through Medicare IME has been steadily reduced since its initiation, while current Medicare Payment Advisory Committee (MedPAC) recommendations suggest that it be further cut by 50%.

There presently exists a diversity of perspectives on how GME funding should be changed in the future. The federal Council on Graduate Medical Education (COGME) recommended in its last report that current levels of GME funding be preserved, and an additional 3,000 new GME positions be created to address rural and urban underserved communities and unmet needs in primary care, surgery and psychiatry. The Association of American Medical Colleges (AAMC) recommends an additional 15,000

GME positions with no limitations. A review of the positions of a variety of CMSS member organizations revealed that many concur that health care is a public good, that GME financing is too focused on Medicare as the major payer, and that financial support for GME must be expanded. While the nation continues to struggle with unmet needs in health care access, quality and cost control, no cohesive message from the medical education community yet resonates with the public at large.

Specialty Society Concerns Regarding GME Financing

Among the member societies of CMSS there exists a substantial commonality among the policies that address GME financing.  Those commonalities can be summarized in a statement of concerns identified during the CMSS GME Financing Conference of May 10, 2012:

1. Healthcare is a public good, requiring an investment in training to produce physicians who practice high quality, patient centered care as effective members of inter-professional team

The medical community views health care as a public good to be nurtured and preserved. The medical education community aspires to produce proficient physicians who practice high quality care and make their patients’ needs a priority. Inter-professional collaboration is appreciated as the most cost-effective and efficient approach to health care delivery using the unique strengths of each health profession to form high-performing health care teams.

2. Collaboration among the specialties is needed to effectively address the nation’s physician workforce needs and GME financing.

The nation needs a stable GME financing mechanism in order to effectively address the unmet needs of the population. The current physician workforce is characterized by overt shortages in multiple specialties that are further exacerbated by the geographic mal-distribution of physicians in general, and by some specialties in particular.  The workforce analyses of all the medical and surgical specialties address the unique needs and challenges of their disciplines, yet differ widely. Hence, collaboration is necessary to achieve the full spectrum of workforce to meet the nation’s needs.

3. GME training enhances access to care for underserved populations, and the workforce produced through GME enhances access to care for society.

In those regions and institutions where graduate medical education takes place, it is the training programs and the clinical services that they provide that become the primary access points to the health care system for the poor and/or disenfranchised populations of the area. These underserved populations rely heavily on the service of teaching institutions for the high quality care they need. It is not just the local community that relies on GME programs and teaching institutions for access to care; indeed, all of society benefits from enhanced access to primary care and specialty care services as a direct result of GME training and the highly qualified physician workforce created by GME training. As the U.S. population grows and ages, GME financing is essential to ensure that a robust physician workforce can continue to meet societal needs for healthcare services. Cuts in GME financing will put this equilibrium at risk, reducing GME training opportunities and reducing access to care for underserved populations in the short term, and to the broader population thereafter.

4. Medical societies (and other GME stakeholders) should contribute to and support the ACGME and the AOA Council on Postgraduate Training (CPT) in the development of outcome metrics to assess the quality of GME.

The ACGME and AOA Council of Postgraduate Training (CPT) are leading efforts to develop metrics that will measure the patient-care quality and safety of GME learning environments for resident physicians and have been actively seeking input from specialty societies and other GME stakeholders in this process. Since the ACGME and CPT bear primary responsibility for assuring the quality of GME in allopathic and osteopathic programs, medical societies (and other GME stakeholders) should contribute to and support these efforts so that the quality metrics for GME will reflect the unique contributions each specialty provides to its patient population. Medical society contribution to and support of these efforts is essential to assure that the quality and safety metrics developed by the ACGME and CPT are congruent with the highest standards of quality and safety in the practice of each specialty.

5. The current mechanism of financing GME is too focused on Medicare as a payer; financial support for GME should be expanded to include all payers of health care.

Although other entities provide some support for GME, Medicare is by far the dominant current contributor. All payers of health care reap the benefits that GME brings to health care delivery, and so all payers should contribute to the support of GME. The recent recession and resultant federal budget cuts are a sober reminder of the weaknesses inherent in the current GME funding system.

6. CMSS should collaborate with groups representing the public interest in health care to maintain financial support for GME.

Given the acknowledgement that health care is a public good, and knowing that multiple groups exist representing the public interest in health care, it is logical to conclude that collaboration between those groups and the medical education community would be based on a common interest. The majority of current financing support for GME is made up of public funds (Medicare/Medicaid/etc.). If those funds are to continue to be used for GME support, the public represents the most influential group to advocate for their maintenance. The medical community needs to be involved to ensure that decisions are evidence-based and supported by accurate information.

7. The current hospital-based GME financing mechanism does not adequately reflect the diversity of training needs of the different specialties.

Health care delivery is shifting to non-acute settings and yet the current financing methodology ties support to metrics reflecting inpatient teaching intensity. These new outpatient training sites may include innovative care delivery models such as the patient centered medical home or community based settings (i.e. public health clinics and outpatient hospice). GME financing in the future should acknowledge the costs of developing and sustaining these new training venues that will optimally be used to train medical professionals from all backgrounds in team based skills required for the future. Ideally, the physician community and the hospital community can work together to ensure this shift results in continued high-quality care for patients.

CMSS believes that it is in the best interests of the public that graduate medical education (GME) in the United States be supported to meet the nation’s needs for its physician workforce. Therefore, the Council of Medical Specialty Societies (CMSS) recommends that increased financial support for Graduate Medical Education (GME) and expansion of the number of GME trainee positions be based on the needs of the US population for its physician workforce, with the allocation of positions across regions and specialties in alignment with physician workforce needs.