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Primary Care Advocates Call for Realignment of GME Funding

News  |  By John Commins  
   May 03, 2016

The American College of Physicians and the Alliance for Academic Internal Medicine have issued a list of reforms that include exploring a performance-based GME payment system.

Primary care advocates, including two physicians groups, are calling for a realignment of funding for Graduate Medical Education that better responds to the nation's urgent and growing need for primary care physicians.

The American College of Physicians and the Alliance for Academic Internal Medicine issued a list of reforms in a joint policy paper published Monday in Annals of Internal Medicine.

ACP President Wayne J. Riley, MD, a clinical professor of medicine at Vanderbilt University, says calls for GME reforms have for years "been floated from various quarters," but with little success.

"The view of the ACP and the Alliance is that those discussions have been disconnected from the real workforce issues we have," Riley says. "The real issues are the number of physicians that we're projecting for the changing demographics of the country and the fact that GME is the ultimate determinative factor in the number of physicians who actually practice."

One of the most glaring problems is the simple lack of residency slots, a number that was capped by Congress at 1996 levels under the Balanced Budget Act. Since then, more than 20 medical schools have opened or expanded class sizes, creating a bottleneck in the physician supply at the residency level. 

For example, in St. Petersburg, FL, All Children's Hospital, " has a new medical residency program that recently attracted 1,400 applicants for 12 slots."

It's not clear if creating more primary care residency slots would come at the expense of other specialties. Riley says that there needs to be a balanced view of the number of specialists versus primary care physicians, although he concedes that may be more difficult that it sounds.

"There may be a perverse incentive to tilt toward specialty training programs that is not cognizant of the fact that we have a significant mal-distribution of primary care physicians in particular and a projected shortage of physicians in general over the next 25 years at a time when Americans are living longer, but consuming more healthcare," he says.

"The demographics and the utilization of healthcare services continues to increase. Expanded insurance has made healthcare more accessible, and therefore in need of more physicians.  We have reached the point where this needs to be brought front-and-center to the policymakers in Washington, DC, and the state capitals."

Lack of Coordination, Coherency

Another problem, Riley says, is the lack of a coordinating body at the federal level to determine workforce needs. Medicare pays about $10 billion each year to fund residency slots, but has little oversight for how that money is directed or spent at individual residency programs.

"The heterogeneity of the residency programs contributes to the confusion and lack of coherency," Riley says. "Bringing rationality into the GME program and the way it is funded will help create some more hegemony around the GME that would better serve the nation and the public well."

Riley says the Affordable Care Act created a workforce commission to determine how many physicians, nurses, and other providers are needed, what specialties are needed, and what regions need them.

Congress has yet to fund it.

"The commission would do that very hard analytic work," he says, "looking at the data and trends and making recommendations to Congress and the executive branch about how best to assign resources. But it has not been funded. That is another part of the conundrum."

Riley says the ACP/Alliance doesn't believe the federal government should have to shoulder all the cost for GME.

"It should be an all-payer situation where providers, insurers, etc., contribute to a common fund for GME because they do benefit by having well-trained physicians," Riley says.

On the other extreme, the ACP has rejected calls to end Medicare funding for GME.

"The reason Medicare got into the business of GME is to drive quality into the healthcare system," Riley says. "Pre-Medicare paying for it, residency trainings were of very low quality. Because Medicare is such a big contributor to GME, the quality has gone up significantly. It has been a key driver to improve training and competency of physicians. It should never be abandoned, but it should be reformed and better linked to the clear workforce demands we have going forward."

Riley says that doesn't mean that Medicare's funding mechanism for GME should not be reformed. Medicare now uses two mechanisms: direct graduate medical education payments (DGME) to hospitals for residents' stipends, faculty salaries, administrative costs, and institutional overhead; and an indirect medical education (IME) adjustment developed to compensate teaching hospitals for the higher costs associated with teaching.

"We are saying, 'homogenize it into one single per-resident fee that follows the resident,'" Riley says. "So, if for a period of your training you are in an urban hospital, but you would prefer to work in a rural hospital, that payment will follow you to a rural training hospital."

"Now, under the rules, that's pretty much precluded at a time when we want to better distribute physicians and encourage young residents toward careers in rural areas. The structure of GME prevents them from getting training experience in different environments."

Even with these reforms, Riley says residency programs will still have to struggle with a perceived bias against primary care specialties that is not-so-subtly reinforced by the huge discrepancies in compensation between primary care physicians and specialists earning two and three times as much.

The ACP/Alliance paper also called for

  • Exploring a performance-based GME payment system that would need to be achieved without destabilizing the system of physician training;
  • Pilot projects to evaluate potential changes to GME funding and to promote innovation;
  • Payments for "well-functioning ambulatory settings" that provide training for internal medicine-pediatrics residents.

"There is a conscious and unconscious bias against pursuing primary care careers because of differential in pay," Riley says. "The other driver is that medical students are coming out $150,000 to $200,000 in debt. That contributes to a perverse incentive that unwittingly entices medical students who may be inclined to choose primary care to something else because of the debt loads and the salary differentials."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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