Speaker of the House John

Funding for Graduate Medical Education

A number of issues have emerged in the debate over how federal and state funds should be used to subsidize physician training. Among key questions are whether the nation is training enough doctors and, if so, of the types that are needed; whether federal support overall for graduate medical education is too costly; whether some federal support should be directed to funding training of other types of health care professionals; and whether federal support should be tied to achieving certain outcomes, such as achieving a higher level of competence among trainees.

GME FUNDING IS COSTLY: There are approximately 115, 000 physicians currently in residency programs. Federal support translates to about $100, 000 per resident per year. Adding in state Medicaid payments, and considering the length of time that residents spend in training, the public investment per physician in training comes to half a million dollars or more. Earlier deficit reduction efforts sought to constrain federal GME expenses. For example, the Balanced Budget Act of 1997 placed a limit on the number of Medicare-supported residency slots, tied to the number of residents hospitals reported having in 1996. This freeze, or cap, on Medicare-supported residency slots has remained in place ever since, even though exemptions and exceptions have permitted steady growth.

Several recent proposals have been made to lower federal contributions to GME. In 2010 the National Commission on Fiscal Responsibility and Reform (the Simpson-Bowles Commission) recommended reducing both direct and indirect GME payments. Under the commission's proposal, direct GME payments would be reduced to equal 120 percent of the national average of a resident's salary, with subsequent adjustments based on inflation. Indirect GME payments would be cut to reflect actual costs more accurately. Total savings in direct and indirect GME costs would be $6 billion in 2015 and up to $60 billion by 2020. In 2011 President Barack Obama proposed reducing Medicare indirect GME support and cutting in half GME funding for children's hospitals. Congress has not acted on either of these proposals.

GME FUNDING AND PHYSICIAN SUPPLY: The number of physicians and the ratio of physicians to general population have increased over the past several decades. However, with the expansion of insurance coverage under the Affordable Care Act, there are concerns about whether the number of physicians will be sufficient to meet the needs of newly covered individuals (Exhibit 1). This topic is highly controversial, however, because of conflicting views about how the number of providers needed is calculated and how the workforce is defined, particularly because nurse practitioners and physician assistants are increasingly performing work traditionally done by physicians. Concerns also have been raised that the greater the number of physicians, the more health care is supplied to people, including much care that is unnecessary or even harmful.

Exhibit 1

Those who are concerned that the supply of doctors may be insufficient worry that decreased GME funding would conflict with efforts to expand the nation's physician supply, including plans to open up 18 new US medical schools. Combined with...

Needed: More Doctors in America  — New York Times
The A.M.A. has fought diligently over the years to mitigate physician shortages on a number of fronts, including efforts to expand funding for graduate medical education and to advocate for more residency slots to train physicians in needed specialties ..

Opinion: Right On, IOM -- Reform Needed in GME  — MedPage Today
.. slamming U.S. medical educators for failing to meet minimal training standards for new physicians, which recommended a major overhaul of government funding for graduate medical education. In addition, NEJM published Perspectives pieces on the topic.

Amer Medical Assn Graduate Medical Education Directory 2011-2012
Book (Amer Medical Assn)
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