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Internists Recommend Ways to Better Align GME Financing with Workforce Needs

New Policy Paper from Alliance for Academic Internal Medicine and American College of Physicians

Washington, May 3, 2016 -- The Alliance for Academic Internal Medicine (AAIM) and the American College of Physicians (ACP) today released a new policy paper calling for changes that better align funding for Graduate Medical Education (GME) with the nation’s health care workforce needs. The paper, Financing U.S. Graduate Medical Education, was published in Annals of Internal Medicine.

“Our current system of GME financing is disconnected from the nation’s pressing health care workforce needs,” said Wayne J. Riley, MD, MPH, MBA, MACP, president of ACP. “At the local, state and national levels if GME funds are meant to develop the future physician workforce, we need better coordination and approaches to make sure that we have an adequate workforce to serve the American public.”

GME plays a major role in addressing the nation’s workforce needs, as GME is the ultimate determinant of the output of practicing physicians. The federal government is the largest explicit provider of GME funding, with the majority of support coming from Medicare, which currently provides approximately $10 billion annually. The costs of GME are recognized by Medicare under 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. The number of Medicare-supported positions at institutions is capped at 1996 levels. The existing caps on the number of Medicare-funded GME positions have been criticized as not allowing GME training positions to increase by the numbers needed to slow or reverse growing shortages of physicians in primary care and other specialties.

“GME funding should be used in ways that meet the nation's physician needs both in numbers of physicians and their focus,” noted AAIM President D. Craig Brater, MD. “Attaining this goal requires defining the numbers and types of physicians who need to be trained, accountability of training programs to meet nationally and locally defined goals, flexibility in how these programs meet those goals, and transparency in how GME funds are used.”

The new paper offers a series of recommendations aimed at addressing the current problems with GME financing.

  • Medicare GME funds should be linked to meeting the nation’s health care workforce needs.
  • All payers, public and private, should be required to contribute to a financing pool to support residencies.
  • A thorough evaluation of the true cost of training physicians is required before any decisions are made regarding how GME funds are distributed.
  • Medicare’s direct graduate medical education (DGME) payments to hospitals and the indirect medical education (IME) adjustment should be combined into a single, per resident amount with a geographic adjustment.
  • GME funding should follow trainees across training setting, minimizing barriers to residents training in sites that would broaden their experience and expose them to a greater variety of practice settings.
  • GME caps should be lifted in order to allow for the training of an adequate number of primary care physicians, including internal medicine specialties and other specialties facing shortages.
  • The concept of a performance-based GME payment system should be explored, but it would need to be achieved without destabilizing the system of physician training.
  • Pilot projects should be used to evaluate potential changes to GME funding and to promote innovation.
  • Internal medicine and internal medicine-pediatrics residents should receive primary care training in well-functioning ambulatory settings that are financially supported for providing training.

“We need to ensure that tomorrow’s physicians enter the workforce prepared to provide the highest-quality care,” concluded Dr. Riley. “These changes will help them meet the challenges of our ever-evolving health care delivery system.”

About the Alliance for Academic Internal Medicine

The Alliance for Academic Internal Medicine is a consortium of five academically focused specialty organizations that represents department chairs and chiefs; clerkship, residency, and fellowship program directors; division chiefs; and academic and business administrators as well as other faculty and staff in departments of internal medicine and their divisions at medical schools and teaching hospitals in the United States and Canada. The Alliance empowers academic internal medicine professionals and enhances health care through professional development, research, and advocacy.

About the American College of Physicians

The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include 143,000 internal medicine physicians (internists), related subspecialists, and medical students. Internal medicine physicians are specialists who apply scientific knowledge and clinical expertise to the diagnosis, treatment, and compassionate care of adults across the spectrum from health to complex illness. Follow ACP on Twitter and Facebook.