GME Funding

GME financing system needs overhaul: IOM report

Lauren Rees , News Writer

A long-awaited report from the Institute of Medicine (IOM) calls for transitioning the current graduate medical education (GME) system to a transparent, performance-based system.  Adding additional funds to the system, however, isn’t one of the recommendations—a fact that concerns the AMA.

“Despite the fact that workforce experts predict a shortage of more than 45,000 primary care and 46,000 specialty physicians in the U.S. by 2020, the report provides no clear solution to increasing the overall number of graduate medical education positions to ensure there are enough physicians to meet actual workforce needs,” AMA Immediate-Past President Ardis Dee Hoven, MD, said in a statement.

While the IOM report does not address increasing the number of residency slots, it makes five significant recommendations that would be part of the decade-long overhaul:

  • Maintain current Medicare GME funding while modernizing payment methods to reward performance, ensure accountability and create incentive for innovation, eventually phasing out the current system. Roughly $15 billion in public funding supports GME, and two-thirds of that—about $9.7 billion—comes from Medicare, with an additional $4 billion coming from Medicaid.
  • Rebuild the GME policy and financing infrastructure with a two-pronged approach:
    • Create a GME policy council in the U.S. Department of Health and Human Services to develop a strategic plan for Medicare GME financing, research sufficiency of workforce and geographic or specialty issues, develop future federal policies, coordinate among stakeholders, and provide annual progress reports to Congress and the president on the state of GME.
    • Create a GME center within the Centers for Medicare & Medicaid Services to manage the operational aspects of GME funding, manage the new GME transformation fund, and collect and report on data to ensure transparency in the use of those funds.
  • Create one Medicare GME fund with two subsidiary funds:
    • An operational fund to distribute funds for residency training positions that are currently approved and funded.
    • A transformation fund to finance initiatives to develop and evaluate innovative GME programs, pilot alternative payment methods, and award new positions in priority areas, among other opportunities.
  • Modernize the GME payment methodology. This proposal would shift from the current two independent funding streams, made up of direct GME payments and indirect medical education adjustments. Instead, organizations sponsoring GME programs would receive one payment based on a national per-resident amount. Payments would eventually be performance-based, using information from the transformation fund pilot studies.
  • Ensure the same level of transparency and accountability in Medicaid GME funding.

Although the committee that developed the report noted that it didn’t find “credible evidence” to support claims of a looming physician shortage, it did say that evidence suggests a worsening imbalance of the proportions between primary care, specialty and subspecialty physicians.

The AMA points to the predicted physician shortage in continuing to advocate for increased residency slots. “The AMA believes the number of residency slots must be increased to produce an appropriately sized and geographically distributed physician workforce to accommodate our country’s future health care needs,” Dr. Hoven said.

In July, the AMA sent a letter urging support for the Creating Access to Residency Education Act of 2014, which would expand the physician workforce by authorizing grants for GME positions in states that have a low rate of residents relative to the general population.

Recently, the AMA House of Delegates passed policy to investigate new solutions for GME funding and workforce expansion and to continue advocating for additional federal GME funding.

“The AMA will continue to encourage the federal and state government, along with private payers, to fund graduate medical education to protect access to care and address physician shortages in undersupplied specialties and underserved areas,” Dr. Hoven said.