Would an Osteopathic
Residency Program Benefit My
Hospital?
Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a GME
program?
 The basics: The relationship between medical schools,
Graduate Medical Education and hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits of
sponsoring Graduate Medical Education
 Next steps

Why You Should Consider GME
in Your Hospital
A
Growing National Issue
– Need for primary care providers
– Insufficient residency training positions
 Your
hospital, medical staff and community will
benefit
Increasing Need for
Primary Care Providers
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Aging physician workforce
Imbalance of specialty-trained physicians
compared to primary care physicians
Projected increase in demand from health
insurance mandate in Patient Protection and
Affordable Care Act
Accountable Care Organizations will enhance
the demand for primary care physicians to
coordinate and manage patient care
Insufficient Residency Training
Positions
 Increased
number of AOA COM’s
 Increased number of COM graduates
 Increased number of allopathic medical school
graduates
 Steady inflow of IMG’s
 Inadequate number of residency positions for all
of the graduates/potential graduates
Benefits of GME
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Hospital Benefits
Medical Staff Benefits
Recruiting Benefits
Patient Care Benefits
Bottom Line Benefits
Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a
GME program?
 The basics: The relationship between medical schools,
Graduate Medical Education and hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits of
sponsoring Graduate Medical Education
 Next steps

Why the AOA is Interested
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The number of Osteopathic Colleges of Medicine has
increased from 17 COM’s ten years ago to 29 COM’s
offering study in 37 locations today
The number of osteopathic medical school graduates has
increased from 2500 ten years ago to a projected 5600+
by 2015
The number of graduates from allopathic medical schools
is also increasing
Bottom Line: The AOA wants to ensure that graduates of
osteopathic colleges of medicine will have the
opportunity to go to a residency training program in this
country
The AOA
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Professional Association Representing 78,000
Osteopathic Physicians & >20,000 Medical
Students
Primary Certifying Body for DOs
Accrediting Agency for Osteopathic GME,
Colleges of Osteopathic Medicine, Hospitals &
Other Health Care Facilities
Osteopathic Medicine
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Founded in 1874 by Andrew Taylor Still,
MD, DO
Focused on the Whole Person
- Unity of Mind, Body, Spirit
- Structure Influences Function
- Innate Ability of the Body to Health Itself
Osteopathic GME
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Primary Care Focus + 23 Medical Specialties
Community-Based Clinical Education
1 in 5 Medical Students attends 1 of 29 Colleges
of Osteopathic Medicine in 37 Locations
Osteopathic Medicine is One of the Fastest
Growing Health Professions
OGME Development Initiative
A Ready Source of Information and Expert
Assistance for Starting an Osteopathic
Graduate Medical Education Program in
Your Hospital
Trends Affecting Hospitals
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Physician Workforce Shortages
New Colleges of Osteopathic Medicine &
Medical Schools
Increasing Number of Medical Graduates
Increased Interest in Starting GME Programs
= New Hospital Opportunities
Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a GME
program?
 The basics: The relationship between medical
schools, Graduate Medical Education and
hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits of
sponsoring Graduate Medical Education
 Next steps

Training to Be a Physician
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College graduate
Medical school (4 years)
– Allopathic (M.D.)
– Osteopathic (D.O.)
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Postgraduate training (GME)
– Residency (3-5 years)
– Fellowship (1-2 years for subspecialty training)
– Both the AOA and the ACGME independently approve
GME programs
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CME (Continuing Medical Education)
– Annual requirement of 50-100 hours of medical education
courses
Medical Education and
Hospitals
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Medical School (Traditional Model)
– First two years: on campus
– Third & Fourth year: In hospital or outpatient setting on
rotation
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Graduate Medical Education (Residency)
– 3+ years depending on specialty
– Funding is hospital-based
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Fellowships
– 1+ years for subspecialty training
– Funding is hospital-based (usually large teaching
hospitals)
How Does a Hospital
Support Medical Students?
 Liaison
with medical school
 Arrange/Facilitate student rotations with
medical staff
 Administrative support
 “Home Base” for the year, but students still
“belong” to their medical school
How Does a Hospital Support a
Medical Residency?
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Residents are hospital employees
– Salary and benefits
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Hospital provides training infrastructure
– Program accreditation
– Employs Director of Medical Education, Program
Directors, administrative staff
– Coordinates faculty
– Provides facilities and other support
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Residents provide patient care
Residents Provide Services
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Year 1
Year 2
Year 3
Inpatient rotations
Inpatient coverage
Outpatient clinics
– Continuity clinic
– Community benefit clinics
– Specialty clinics
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Supervise other residents
Who Pays for Medical
Education?
Medical/osteopathic school- the student pays tuition
– $20-50K per year for 4 years
– Most students have debts upon graduation
– 93% in debt (average for those > $200K)
 Residency & Fellowship- Medicare reimburses hospitals
for direct and indirect costs of residency training.
 CME- self or employer paid
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Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a GME
program?
 The basics: The relationship between medical schools,
Graduate Medical Education and hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits of
sponsoring Graduate Medical Education
 Next steps

Criteria for a Good “Fit”
 General
guidelines: Few specific Pass or Fail
criteria
 Funding requisite: meet Medicare criteria for
reimbursement
 Educational requisite: support of
– Medical staff
– Hospital leadership
 You
will need a “Physician Champion”
Medicare Criteria for
Reimbursement
• Balanced Budget Act of 1997
– Hospitals which were conducting GME
residency training at that time are capped at
that number of residents for reimbursement
purposes
– If a hospital residency count falls below that
number, the new lower number of residents
becomes the new cap
FTE Cap
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Hospitals will only be reimbursed by Medicare
for APPROVED positions
The Medicare FTE Cap establishes a limit on
the number of trainees which Medicare will
reimburse
Cap Necessitates Advance Planning &
a Strategic Approach to Developing a
GME Program
“New” Teaching Hospital
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Hospital with a GME Program Established On
or After January 1, 1995
Resident “Cap” is Set Based on the Number of
Residents in All Specialty Programs in the Third
Year After Training Begins
Once Caps are Set, Urban Hospitals Generally
Cannot Add Medicare-Funded Positions
Rural Hospitals Can Add New Specialties but
Cannot Expand Existing Programs
Medical Staff Support is
Critical
 Willingness
to participate in an educational
environment
– Teaching, sharing and scrutiny
 Willingness
to work with residents
 Willingness to sponsor medical students, and
 The
time to act upon this willingness
Other Criteria for a Good “Fit”
 Sufficient
inpatient and outpatient volume
– “Sufficient” depends on which GME programs are
to be started
 Higher
percentage of Medicare (both FFS and
Medicare Advantage) patients is better
Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a GME
program?
 The basics: The relationship between medical schools,
Graduate Medical Education and hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits
of sponsoring Graduate Medical Education
 Next steps

A Word about Costs
Start-Up Costs Include:
• Resident Salaries & Benefits
• Faculty Salaries
- DME & Program Director(s)
- Inpatient & Ambulatory Teaching Faculty
- Support Staff
• Capital & Equipment Costs (call rooms, library,
computers, intern/resident lounge)
A Word about Payment
 Medicare
pays teaching hospitals
– Direct Graduate Medical Education (DGME)
Payments
– Indirect Medical Education (IME) Adjustment
 Based
on Formulas, Statutory Factors &
Certain Hospital-Specific Data
DGME Payment
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Payment for Medicare’s Share of the Costs of
Training Interns & Residents
- Resident Salaries & Benefits
- Faculty Compensation
- Program Administration & Overhead Costs
Calculated using Hospital-Specific Per Resident
Amount, Medicare Utilization Rate & Number
of Full Time Equivalent Residents
IME Adjustment
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Recognizes Teaching Hospitals Have Higher
Patient Care Costs due to Presence of Trainees
- Treating Sicker Patients
- Offering More Services, Tests & Technology
Calculated using Hospital-Specific Teaching
Intensity (ratio of residents to beds), DRG
Payments and Statutory IME Adjustment Factor
for the Current Year
Costs: Medical Students
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You will have some costs for medical students
– Costs for medical students are not reimbursable
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Why support medical students?
– Some of them will become your residents
– Excellent recruiting mechanism
– Opportunity to evaluate potential residents
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What costs might I have?
– Administrative support
– Many hospitals provide meals
– Some hospitals provide lodging
What Are the Real Benefits of
Sponsoring GME?
 Benefits
to hospital
 Benefits to medical staff
 Benefits to patient care
 Benefits to recruiting program
 Benefit to hospital bottom line
Hospital Benefits
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Physician Recruitment
Culture of Education
In-House Physician Coverage
Educational & Technical Expertise
Enhanced Service to the Community
Competitive Advantage
Revenue Stream
Medical Staff Benefits
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Environment of Life-Long Learning
Expanded Referral Network
Prestige in the Community
Tighter Bonds Among Medical Staff & Among
Attendings, House Staff & Nursing
Enhanced CME Opportunities
Succession Planning
Mentoring and Molding Future Physicians
More about Osteopathic
Physicians
 Approximately
60% of practicing osteopathic
physicians practice in the primary care specialties
of family medicine, general internal medicine,
pediatrics, and obstetrics and gynecology.
 Many DO’s fill a critical need for physicians by
practicing in rural and other medically
underserved communities.
Recruiting Benefits
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Ability to “Grow Your Own” Medical Staff
Reduced Physician Recruiting Expenses
Caliber of Training is a Known Quantity
Trainees are Already Known & At Home in the
Community
Interns & Residents Tend to Remain in the Area
Where They Train
Patient Care Benefits
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Access to Care
Enhanced Coverage & Quality
Enhanced Ability to Meet Community Needs
Expanded Scope of Services
Presence of Residents 24/7
More Patient Contact with Physicians
Increased Comfort Level for Nursing
Opportunity for Clinical Trials & Research
Bottom Line Benefits
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Medicare Direct & Indirect GME Payments
Reduced Medical Staff Coverage Expenses
Increase in Physician Referral Base
Financial Support also may be available from
Medicaid, the Veterans Administration and
Other Federal or State Programs
Overview
Why you should consider Graduate Medical Education?
 Why the AOA is interested in helping you start a GME
program?
 The basics: The relationship between medical schools,
Graduate Medical Education and hospitals
 Is your hospital a good “fit” for GME?
 Costs, reimbursement and non-monetary benefits of
sponsoring Graduate Medical Education
 Next steps

What Keeps CEOs Up at Night
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Competition for Well-Reimbursed Patient
Services
Increased Cost of Physician Services
Emphasis on Cost Containment
Quality Oversight/Ties to Payment
Shortage of Skilled Healthcare Workers
Shortage of Physicians – Especially Primary
Care Physicians
How will an Osteopathic
Graduate Medical Education
program fit into your
hospital’s Strategic Plan?
Some Strategic
Considerations
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Your mission: Why does your hospital exist?
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Patient Care & Physician Services?
Service to the Community?
Quality & Safety?
Education?
Research?
Your vision: What image in your community do
you wish to portray as you fulfill your mission?
Some Strategic
Considerations
 Your
values: What are the guiding principles that
drive your work?
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Planning for the future?
Improving Community Health?
Providing Care for Those in Need?
Providing a Resource for Physicians?
Some Strategic
Considerations
 Your
competitive position: How would GME
affect your SWOT analysis?
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Build on Internal Strengths
Fix Internal Weaknesses
Take advantage of External Opportunities
Counter External Threats
“OK, you convinced me.
When do I start?”
Next Steps
 The
approval process
 How AOA can help
The Approval Process
 OPTI
(Osteopathic Postgraduate Training
Institution)
 AOA
approvals
 CMS
Fiscal Intermediary
Osteopathic Postgraduate
Training Institution (OPTI)
Osteopathic graduate medical education (OGME)
programs differ from allopathic training programs
 To foster collaboration in OGME’s predominately
community-based training programs, the AOA
initiated OPTI’s in 2000
 Every hospital offering OGME programs belongs
to an OPTI
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– Academic sponsorship
– Program support
More on OPTI’s
 Every
OPTI is affiliated with an osteopathic
school of medicine
 OPTI’s vary in scope of services provided
– Some OPTI’s provide extensive services, such as
web-based instruction
– Others provide fewer services
– All OPTI’s will assist you through the AOA
program approval process
 You
will have your choice of OPTI’s
OGME Development Initiative
Marshalls the Resources of the AOA & the
Osteopathic Profession to Help Hospitals
Interested in Starting New Osteopathic
GME Programs
OGME Development Initiative
Employs –
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A Strategic Approach
Expert Consultants
Useful Materials on Starting and Operating
High Quality OGME Programs
OGME Development Initiative
Answers such Practical Questions as –
• What are the Benefits of an OGME Program?
• What Assistance & Information are Available?
• How to Move Forward from Interest to
Program Approval?
• Where to Call for Complimentary In-Person
Assistance from Experienced Consultants?
OGME Development Initiative
Provides Support to Assist You in –
• Adding an OGME Program to Your Hospital’s
Strategic Plan
• Reaping the Benefits of an OGME Program
- To the Hospital
- To Patients
- To the Community
- To the Medical Staff
Knowledgeable Consultants
Initiative Corps of Consultants includes
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Seasoned Teaching Hospital CEOs & Senior
Administrative Staff, Directors of Medical
Education, Deans, Program Directors & Other
Medical Educators
Knowledgeable Consultants
Provide Peer-to-Peer Assistance, by
Conference Call & On Site, to • Answer Your Questions
• Work One-on-One with Colleagues
• Share their Expertise & Experience
• Estimate Start-Up Costs & Medicare Payment
• Guide You Through the Accreditation Process
Knowledgeable Consultants
Help You Identify the Keys to Success –
• Local Champions
• Physician Leadership
• Medical Staff
• Hospital & System Administration
• Hospital & System Boards
• The Community
• OPTIs
Knowledgeable Consultants
Focus on Critical Components • Faculty Resources
• Community Needs
• Adequate Medicare Percentage for Reasonable
Payment
• Sufficient Patient Load
• Scope, Variety & Volume of Trainee
Experiences
Information & Materials
Provide You with Easy Access to Web-Based
Resources on –
• Medicare Financing
• Program Approval & Accreditation
• Educational Standards & Policies
• Physician, Hospital & Trainee Agreements
• Templates, Models & Forms Designed to Help
Smooth Your Way to a Quality Program
For Further Information
OGME Development Initiative
(800) 621-1773, ext. 8010
OGMEdevelopment@osteopathic.org