7 questions about med school funding and reform, answered

While it might not be on every physician’s daily radar, graduate medical education (GME) funding is still key to quality healthcare and has implications for both academic centers and private practices. 

“Adequate resources are critical to support a sustainable workforce so that radiology can continue its position as the vanguards of medical imaging,” Mark E. Mullins, MD, PhD, and colleagues wrote in a Journal of the American College of Radiology report. “Although we rely on professionals to represent us in advocacy and government relations, it is the grassroots influence that is most effective with our legislators.”

Mullins and co-authors explored both the challenges GME is facing and the viability of a host of proposed solutions. These are the takeaways.

Where did our GME funding system originate?

GME’s modern structure is rooted in the 1965 passage of the Medicare program, Mullins et al. explained. The plan was intended to be a temporary fix decades ago, but with modifications and amendments it’s survived more than 40 years.

Where does the money come from?

Largely the federal government. The government funneled $9.5 billion into Medicare in 2010, plus an additional $2 billion in matched Medicare dollars to help subsidize GME programs. Mullins and colleagues said there are other, more minor sources of funding, like from the Department of Veterans Affairs, Public Health Service and Department of Defense. Some states also have local programs dedicated to helping fund GME.

What’s the difference between direct (DME) and indirect (IME) medical education? 

DME payments, which comprised $3 billion of Medicare funds in 2010, focus on supporting residents and their faculty members, including their salaries, institutional costs associated with providing GME programs and overhead. IME payments are, on average, twice as high—$6.5 billion in 2010—and compensate teaching hospitals for the increased costs associated with training residents. IME payments take into account the decreased productivity of faculty members who also teach, as well as higher case mix indices.

So, what’s wrong with the current system?

In 2014, the National Academy of Medicine (NAM) commissioned a study to review GME funding in the U.S. Mullins and co-authors said the NAM committee “determined that the system had significant flaws and lacked transparency and accountability,” so members drafted a report identifying six goals that could improve the GME system. Among the recommended initiatives were better training the physician workforce to provide improved care at lower costs, encouraging innovation, providing transparency and accountability, strengthening public policy planning, maximizing the value of funds invested in GME funding and mitigating unintended consequences during the transition period.

Does NAM have a game plan?

It does. NAM’s committee outlined a new program in its recommendations—one that’s clear but contested among entities as influential as the American Medical Association. NAM suggested establishing a two-part governance infrastructure, which would create a GME Policy Council in the Department of Health and Human Services for decision-making and a GME Center with CMS as an operational unit to administer payment reforms. While total GME funding would continue at its current levels for about a decade, the new plan would abolish funding for both DME and IME, and payments would be based on a basic per-resident amount, with geographic adjustments. Those payments would then be directed to the institutions responsible for the actual educational content of GME.

What are people upset about?

The AMA, Association of American Medical Colleges and the American Hospital Association have all expressed concern about NAM’s plan—mostly the fact that the proposed 35 percent reduction in Medicare GME payments would “jeopardize services unique to teaching hospitals.”

“The Medicare funds would be siphoned off at a time when the solvency of the program was in jeopardy,” Mullins and colleagues said. “The (NAM) recommendations are another manifestation of ‘big government’ controlling healthcare.”

Also, with the American Heart Association predicting a 130,000-strong physician shortage by 2025, some critics believe current caps on Medicare-funded GME positions should be lifted to create more slots for the projected shortage. 

What are the implications for radiology?

Substantial ones, Mullins and colleagues said. 

“If the concepts in the (NAM) report make their way into legislation, it is likely that the number of radiology slots would be cut to redistribute funding for training primary care physicians in community and other alternative settings,” the authors wrote. “With a decreasing number of radiologists entering the workforce, we as a speciality may now have the capacity to meet future demands.”