GME Funding To Be Cut

The Obama administration and some members of Congress want to cut back on graduate medical education (GME) funding.

As the largest single funder of GME in the country, each year, the federal government contributes about $9.5 billion in Medicare funds, and approximately $2 billion in Medicaid dollars, to help pay for GME. The federal government also funds GME in children’s hospitals through a program called Teaching Health Centers and through contributions from other agencies.

There are approximately 115,000 physicians currently in residency programs which translates to about $100,000 per resident per year in Federal support. Adding in state Medicaid payments, and considering the length of time that residents spend in training, the public investment per physician in training comes to half a million dollars or more.
In late 2011, the Resident Physician Shortage Reduction Act was introduced in Congress to increase the number of Medicare-funded residency positions by 15 percent. Although the bill was debated in the Senate in late 2011, it did not pass.

Despite broad agreement on the need for growth in the primary care workforce, the number of specialist physicians still outweighs the number of primary care doctors by about two to one. This contrasts with the situation in many other countries, where numbers of primary care physicians and specialists are roughly equal. The relatively weak role of primary care in U.S. healthcare may help explain why other countries achieve better and more cost-effective health outcomes than the United States. Reasons that contribute to the disparity include specialists’ higher pay as well as the perception that the work they do for patients is more complex and intellectually challenging than primary care.

In part in response to lack of interest in physician-led primary care, some of the newer federal efforts to fund GME make funding available for primary care training of nurse practitioners and physician assistants. What’s more, in its proposed 2013 budget, the Obama administration proposed cutting Medicare GME payments but slightly expanding funds to train these primary care providers.

In late July 2012 the Department of Health and Human Services, announced that it would award about $200 million to five hospitals to help train additional advanced practice registered nurses, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives into the workforce.

Under the budget law enacted in August 2011, Congress faces a deadline of January 1, 2013, for making major cuts in all sectors of federal spending or faces automatic cuts, known as “sequestration.”

As excerpted from the Aug. 16 “Health Policy Brief” from HealthAffairs.

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