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IOM Identifies GME Problems, Calls for Finance Changes

 |  By cclark@healthleadersmedia.com  
   July 30, 2014

Downplaying the physician shortage, an IOM report's recommendations for improving the graduate medical education system include refocusing areas of clinical emphasis and changing how GME is financed.

Hospital groups bridled at far-reaching recommendations issued Tuesday by an Institute of Medicine committee on graduate medical education. It said residency training programs do not need more federal money, but do require major reform and accountability if this country is to have enough doctors in the right specialties.

The report calls out dozens of problems in the current GME system, which uses Medicare funds from taxpayers to support what the report says are 117,000 residency slots per year. Key among the IOM committee's recommendations are several having to do with how GME is funded.

The IOM proposal, which would require Congressional approval, "would threaten the world's best training program for health professionals and jeopardize patients, particularly those who are the most medically vulnerable," said The Association of American Medical Colleges said in a statement issued Tuesday.

The American Hospital Association, in a statement of its own, said, "The IOM report "is the wrong prescription…(because it) proposes phasing out the current Medicare GME funding provided to hospitals and offering it to other entities that do not treat Medicare patients."

Because the report advocates training programs taking place in settings such as health centers and clinics rather than hospitals, the IOM strategy "would weaken the critical, diverse training students receive in hospitals where they learn to care for America's seniors," the AHA said.

Among the major issues highlighted in the IOM report:

  • The report does not see a shortage of physicians as dire as some groups have suggested, saying that physician assistants, advanced practice registered nurses, care delivery redesigns, telemedicine, electronic communication and other innovations "may ultimately lessen the demand for physicians despite the added pressures of the aging population and coverage expansions."
  • The GME system has been producing more physicians—17.5% more per year in 2012 than in 2002—but "has not produced an increasing proportion of physicians who choose to practice primary care, to provide care to the underserved populations, or to locate in rural or other underserved areas."
    For example, there is a great need for more primary care physicians but residents choosing that field have dropped "precipitously," from 54% of those in the third year of residency in 1998 to 21% in 2011.
  • Nearly all GME training now occurs in hospitals, "in spite of the fact that most physicians will ultimately spend much of their careers in ambulatory, community-based settings."
  • There's "worrisome evidence that newly-trained physicians in some specialties have difficulty performing simple office-based procedures and managing routine conditions." The report cited a study that mentioned as examples, "care of minor depression and anxiety, minor chronic pain, basic dermatological conditions, and headaches) and performing simple procedures provided in outpatient settings."
  • Today's GME curricula don't sufficiently emphasize "care coordination, team-based care, cost of care, health information technology, cultural competence, and quality improvement."
  • Residents and faculty "know little about the costs of diagnostic procedures." And, residents "feel unprepared to provide culturally competent care."
  • Though 90% of the $15 billion spent on GME funding comes through the Medicare and Medicaid programs, physicians are not required to provide services to Medicare or Medicaid patients after graduation from a Medicare or Medicare-supported residency program.
  • Today's GME system "does not yield useful data on program outcomes and performance" and there is "no mechanism for tying payments to the workforce needs of the healthcare delivery system." The IOM recommends that a system that ties payments to performance be created.

The 205-page IOM report was written by 21 healthcare policy, hospital system, and physician leaders including former Centers for Medicare & Medicaid Services acting administrator Donald Berwick, MD.

Funding Concerns
While the IOM report recommends level funding for GME programs from federal sources, it notes that in 1997, Congress capped the number of Medicare-supported physician training slots. Hospitals can add to those, but they just can't get more Medicare funding for those trainees.

The cap is regarded as regionally discriminatory, however, because the level is set to the number of hospital's residents in 1996, "essentially freezing the geographic distribution" of residencies "without regard for future changes in local or regional health workforce priorities, or the geography and demography of the U.S. population.

Committee member David Asprey, Assistant Dean of the Office of Student Affairs at Carver College of Medicine at the University of Iowa, he said, the committee's message is clear that more efficiency is the goal.

"It's more to say that the dollars flow to these entities, who are not necessarily being held accountable for an outcome, such as producing a certain specialty or whatever the case may be," he says. Residency schools "obviously have to remain accredited, but aside from that, there's not a lot of teeth now to affect a desired outcome."

Not all professional organizations were unhappy with the report.

The Surgical Coalition, representing 20 professional societies with 250,000 surgeons and anesthesiologists, was neutral, merely highlighting its estimate that the workforce shortage of doctors would grow to 130,600, including 64,800 specialists including surgeons, by the year 2025.

"At a minimum," the coalition wrote in a statement, "Congress should bolster the U.S. surgical workforce by lifting the cap." The Josiah Macy Jr. Foundation, a national group that strives to advance education and training of health professionals, said in a statement that it welcomed the call for a more "publically accountable" GME program.

Funding Recommendations

The IOM made the following funding recommendations:

1. Maintain Medicare GME support at the current aggregate amount (i.e., the total of indirect medical education and direct graduate medical education expenditures in an agreed-on base year, adjusted annually for inflation) while taking essential steps to modernize GME payment methods based on performance, to ensure program oversight and accountability, and to incentivize innovation in the content and financing of GME. The current Medicare GME payment system should be phased out.

2. Build a GME policy and financing infrastructure.

2a. Create a GME Policy Council in the Office of the Secretary of the U.S. Department of Health and Human Services. Council members should be appointed by the Secretary and provided with sufficient funding, staff, and technical resources to fulfill (certain) responsibilities, such as development and oversight of a strategic plan for Medicare GME financing.

2b. Establish a GME Center within CMS in accordance with and fully responsive to the ongoing guidance of the GME Council.

3. Create one Medicare GME fund with two subsidiary funds:

3a. A GME Operational Fundto distribute ongoing support for residency training positions that are currently approved and funded.

3b. A GME Transformation Fundto finance initiatives to develop and evaluate innovative GME programs, to determine and validate appropriate GME performance measures, to pilot alternative GME payment methods, and to award new Medicare-funded GME training positions in priority disciplines and geographic areas.

4. Modernize Medicare GME payment methodology.

4a. Replace the separate indirect medical education and direct GME funding streams with one payment to organizations sponsoring GME programs, based on a national per-resident amount (PRA) with a geographic adjustment.

4b. Set the PRA to equal the total value of the GME Operational Fund divided by the current number of full-time equivalent Medicare-funded training slots.

4c. Redirect the funding stream so that GME operational funds are distributed directly to GME sponsoring organizations.

4d. Implement performance-based payments using information from Transformation Fund pilot payments.

5. Medicaid GME funding should remain at the state's discretion. However, Congress should mandate the same level of transparency and accountability in Medicaid GME as it will require under the changes in Medicare GME contained in these recommendations.

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