In a newly released report, the Institute of Medicine urges the government to significantly reform the system for funding graduate medical education to address deficiencies and better shape the physician workforce for the future.
A 21-member IOM committee released its report, Graduate Medical Education That Meets the Nation's Health Needs, on Tuesday. Here are 10 things to know about the report's findings and recommendations as well as reactions from some professional organizations.
1. Even though GME is publicly supported through Medicare — to the tune of $9.7 billion in 2012 — and Medicaid ($3.9 billion), "there is a striking absence of transparency and accountability for producing the types of physicians that today's healthcare system requires," according to the report. For example, the formula-driven nature of GME funding means programs are paid regardless of whether it produces physicians that reflect local, national or regional health needs. Additionally, the only current mechanism for accountability is that the residency programs be accredited. Further, there is no guarantee that a physician, once through his or her residency, will serve patients from the Medicare or Medicaid population despite being funded through those programs.
2. The IOM committee also found fault with current GME payment methods, calling them outdated and based on a time when hospitals were the central site for physician training. "By distributing funds directly to teaching hospitals, the Medicare payment system discourages physician training outside the hospital, in clinical settings where most healthcare is delivered," according to the report. The report also notes that because GME payments are linked to a hospital's Medicare inpatient volume, children's hospitals, safety-net hospitals and other facilities that don't care for a high proportion of elderly people are disadvantaged. "Non-clinical, population-based specialties, such as public health and preventative medicine, are similarly affected."
To fix these problems and modernize GME funding, the IOM committee issued five recommendations, detailed below.
3. The first recommendation calls for keeping the level of GME funding stagnant (but adjusted for inflation) but to modernize payment methods, basing them on performance and incentivizing innovation in GME financing. "The current Medicare GME payment system should be phased out," the committee wrote.
4. In order to truly transform Medicare GME funding, the committee recommended building a new GME policy and financing infrastructure. It called for the creation of a GME Policy Council in the Office of the Secretary of the Department of Health and Human Services, which would develop a strategic plan for Medicare GME financing and develop future policies around the distribution and use of Medicare funds, among other duties. Under this recommendation, a GME Center within CMS would also be created to manage the operational aspects of GME funding from Medicare.
5. Perhaps the biggest change outlined in the report would be to create a two-part Medicare GME fund. The operational fund would support the continuation of current GME programs at teaching hospitals and other facilities. A GME Transformation Fund would determine GME performance measures, pilot alternative payment methods and award new Medicare-funded training positions based on discipline and geographic priorities. It would be overseen by the GME Policy Council mentioned above.
6. To modernize current payment methodology, the committee recommended replacing the indirect medical education and direct GME funding streams with one payment to organizations with GME programs based on a national per-resident amount.
7. The final recommendation is for Medicaid GME funding, which the committee said should "remain at the state's discretion." However, it does call for Congress to make Medicaid funding as transparent as Medicare funding would be under the changes proposed in the report.
8. The IOM committee recognized that its proposed changes would mean major change for many healthcare organizations, especially teaching hospitals. For that reason, it recommended these changes occur over a 10-year rollout period.
9. Not everyone is pleased with the IOM committee's recommendations, especially the American Hospital Association, which called it "the wrong prescription for training tomorrow's physicians" in a statement from Linda Fishman, senior vice president of public policy analysis and development. The AHA took fault with the recommendation to offer GME funding to entities other than hospitals, and also that the proposal "uncouples Medicare payments for GME from care for seniors at a time when 10,000 Americans a day become eligible for Medicare."
10. The Association of American Medical Colleges is also displeased with the IOM report, as President and CEO Darrell Kirch, MD, said the recommendations "will slash funding for vital care and services available almost exclusively at teaching hospitals…In addition to hurting patient care, these cuts will limit critical training settings for future physicians, nurses and other health professionals." He also noted the recommendations would worsen the physician shortage "as teaching hospitals will be forced to make difficult choices between training more physicians…and maintaining life-saving clinical services for their communities."