US panel calls for sweeping changes to funding of graduate medical education

The US system for funding physician training should be overhauled to ensure that it produces a workforce better matched to the nation’s needs, says a new report from the Institute of Medicine.1

Currently, US taxpayers provide $15bn (£8.9bn; €11.2bn) a year, primarily through Medicare, to pay for postgraduate medical training. Most of that money goes to teaching hospitals, with few strings attached. “This funding is essentially guaranteed—regardless of whether the funded programs reflect local, regional, or national healthcare priorities,” the 21 member panel wrote.

This has resulted in a physician workforce with too many specialists and too few doctors who were prepared to work in primary care or in underserved communities, the panel said. It added that hospital based training left many physicians unprepared to practice in the ambulatory care settings where most of them would work.

“There is worrisome evidence that newly trained physicians in some specialties have difficulty performing simple office based procedures and managing routine conditions,” the panel noted. Moreover, it said, the current practice of distributing funds directly to teaching hospitals on the basis of the number of Medicare patients they saw not only discouraged training in settings outside of hospitals but “systematically disadvantages children’s hospitals, safety net hospitals, and other institutions that care for non-elderly patients.” It added, “Non-clinical, population based specialties, such as public health and preventive medicine, are similarly affected.”

The panel did not report on predicted physician shortages; it cited analyses showing that changes in healthcare provision—such as the increased role of advanced practice registered nurses, team based medicine, and other innovations—may successfully tackle the growing demand for health services.

In its recommendations the panel called for Medicare support to go to two distinct funds: one to support existing residency programs that would remain fixed at the current level, adjusted for inflation; and a second “transformational” fund to finance new training slots in required specialties and underserved communities and to support innovative pilot programs. Such funds would go directly to the institutions providing this training and not necessarily through a teaching hospital, and they would not be linked to the institution’s volume of Medicare patients. Over time the proportion of Medicare funds going to transformational programs would grow, under the Institute of Medicine’s plan.

The panel also called for the reform to be implemented over 10 years and to be overseen by a Graduate Medical Education Policy Council, based at the office of the Secretary of Health and Human Services. Implementing the funding changes proposed by the panel would require congressional action.

The institute’s proposal was quickly rejected by a number of US medical groups. Darrell G Kirch, president and CEO of the Association of American Medical Colleges, argued that doctors in training needed experience of working with the wide range of patients that teaching hospitals provide. “While the current system can [be] and is being improved to train more doctors in non-hospital settings, these immediate cuts will destabilize a system that has produced high quality doctors and other health professionals for more than 50 years and is widely regarded as the best in the world,” he said.

The American College of Physicians, which represents US internists, said that it was “particularly concerned” that the panel did not make recommendations to deal with the nation’s “looming physician shortage,” said the college’s president, David A Fleming.

But the American Academy of Family Physicians embraced the panel’s recommendations. The academy’s president, Reid Blackwelder, said that it especially approved the institute’s recommendations that graduate medical education payments should no longer be linked to the volume of Medicare patients treated and that funding should be shifted away from the longstanding, hospital based system.

“As family physicians, we practice on the front lines of healthcare and see most of our patients outside of a hospital in an ambulatory office based setting. Ensuring that more training takes place in these environments is key to preparing our future physician workforce,” said Blackwelder.