What Can States Do For
Graduate Medical Education?
ORGANIZATION OF STATE MEDICAL ASSOCIATION
PRESIDENTS
June 6, 2014
Paul H. Rockey, MD, MPH
Scholar in Residence
Accreditation Council for Graduate Medical Education
U.S. Spends $2.7 Trillion
Per Year on Health Care
• $8,400 per person per year
• Median household income $51K
• Enough money to invest in the healthcare workforce, including physicians
• How should we pay for GME?
GME Funding Issues
• Need more GME positions to keep up with
population growth, aging, chronic diseases and
medical school expansion
• Need new training venues to meet community
health needs
• Need GME positions in new models of health
care (medical homes/chronic care models)
• Need to fund emerging costs (accreditation,
technology, simulation, faculty, duty hours, etc.)
Projected shortages of physicians,
2008 to 2020
91,500
With ACA
Without ACA
58,000
64,100
30,200
7,400
2008
2010
2012
Projections prepared by the Lewin Group for the AAMC.
2014
2016
2018
2020
Medicare funding of Graduate
Medical Education
• Medicare is funded by a payroll tax
• Spends $525 Billion/year on medical services
• Pays $9.5 Billion/year to teaching hospitals for
GME as part B (hospital revenue)
• Less than 2% of Medicare is spent on GME
• GME payments are tied to hospital beds
occupied by Medicare patients
• Medicare funding of GME “capped” in 1997
Explicit Payments for GME
• Total as much as $15 Billion from all
sources: Medicare, Medicaid, VA, DOD,
CHGME, HRSA, direct state support, other...
• GME spending is only 0.56 percent of the
2.7 Trillion spent on health care
• Fundamental to future medical workforce
What’s the problem?
• “Public good” vs. “subsidy to professional
education”
Projected U.S. Medical School Graduates
and First-Year GME
Approximately 7,000 IMGs also entered first-year GME in 2009.
Projects 1% annual growth in number of first-year GME positions.
Data compiled by AAMC Center for Workforce Studies, 7/2009 from 2008 AACOM and AAMC sources.
Most GME funds go to teaching hospitals
Most data on GME are
national.
Why look at states?
State Governments in the U.S.
Control the Delivery of Health Care
States determine
• who can deliver health care through
professional licensing boards and scope of
practice legislation
• what services are paid for by Medicaid and
private insurers through insurance regulations
and legislated benefits
• how care is provided through regulations of
health-care facilities
States’ Roles are Expanding
• States fund public medical schools and several
are funding new medical schools.
• The Affordable Care Act (ACA) strengthens
States’ roles by vesting in them authority to
expand Medicaid and/or to create statebased insurance exchanges.
• There is a high degree of variability among the
States.
Resident physicians per 100,000 state population
10 or fewer residents
11 – 20 residents
21 – 30 residents
31 – 40 residents
41 – 50 residents
60 or more residents
What States Can Do
• Develop sustainable all payer funding
• Assess health care workforce regularly
• Train in settings accountable to populations
• Create new state-wide structures to allocate
GME among specialties, geographies and sites
• Target GME expansion to high priority needs
What States Can Do
• Tap private insurance as a sustainable source for
GME funding:
– Bill in the California Assembly would levy an insurance
surcharge to fund $100 M/year for Graduate Medical
Education
• Appropriate funds to initiate new (or expand
existing) GME programs:
– Georgia is creating new residency programs in “virgin”
hospitals that will qualify for Medicare funding
– North Dakota, Florida and Wisconsin have appropriated
funds to expand residency training
What States Can Do
• Award GME funds to teaching sites in non-hospital
settings:
– Kansas, Minnesota, Missouri, and West Virginia
– States with large rural populations
• Target Medicaid GME funding toward State
workforce needs:
– Most States already fund residency training, either through
appropriations and/or Medicaid
– GME funding by Medicaid totals nearly $4B per year
– States could shape GME with their Medicaid funds
Why Use Medicaid to finance GME?
• States control Medicaid expansion under the ACA
• States could link health workforce training to
innovative models of care for Medicaid recipients,
for example, in Teaching Health Centers (THCs)
• Medicaid has the advantage of Federal matching
• 1115 Medicaid Waiver application:
– Illinois waiver would restore Medicaid GME, targeted to
shortages and THCs
• Caution: Contracting Medicaid to for-profit
insurance companies may exclude GME funds
National “Game Changers”
• Institute of Medicine Report on the Governance
and Financing of Graduate Medical Education
– to be released June 19
• Single GME Accreditation System
– ACGME and AOA have agreed to work together
• Congressional Action may still happen
– Several Bills would lift Medicare cap on GME funding,
(with conditions)
– For details, check out the AAMC website at:
www.aamc.org
What Can States Do For
Graduate Medical Education?
ORGANIZATION OF STATE MEDICAL ASSOCIATION
PRESIDENTS
June 6, 2014
Paul H. Rockey, MD, MPH
Scholar in Residence
Accreditation Council for Graduate Medical Education