Graduate Medical Education Needs Significant Overhaul: IOM

Megan Brooks

July 29, 2014

It is time to overhaul how graduate medical education (GME) is financed and implemented in the United States to ensure that the public's $15 billion annual investment is producing the physicians the nation needs, according to a report released today by the Institute of Medicine (IOM).

"America's health care system is undergoing profound change as a result of new technologies, and the recent implementation of the Affordable Care Act will further increase the focus on primary and preventive care," Gail Wilensky, cochair of the IOM's Committee on the Governance and Financing of Graduate Medical Education, said in a news release.

"It's time to modernize how graduate medical education is financed so that physicians are trained to meet today's needs for high-quality, patient-centered, affordable health care," she added.

Outdated System

The US government provides roughly $15 billion annually to help fund graduate medical education, with Medicare providing the largest chunk, at $9.7 billion per year.

The report says public financing for GME should remain at its current level, but it calls on Congress to amend how Medicare funds physician training during the next decade to move to a system that rewards performance and spurs innovation.

The report notes that the current financing system requires little accountability, allocates funds independent of workforce needs or educational outcomes, and offers insufficient opportunities to train physicians in the healthcare settings now used by most Americans, such as clinics or community-based settings.

This report "proposes significant revisions to rectify current shortcomings and create a GME system with greater transparency, accountability, strategic direction, and capacity to innovate," IOM President Harvey V. Fineberg, MD, PhD, said in a forward to the report.

"I hope it will provide useful and principled guidance for policy makers and program administrators alike as we work toward a GME system that better contributes to achieving the nation's health goals," he said.

The report notes that although physician training programs must meet accreditation and certification standards, they do not address broader national objectives such as the makeup of the physician workforce or the geographic distribution of resources.

The mix of available physician training slots may be more driven by the needs or priorities of individual teaching hospitals, which receive the bulk of GME funding provided by Medicare, rather than the healthcare needs of the nation, the report notes.

New Governance Infrastructure

For example, the report notes that in recent years, there has been a disproportionate increase of physicians being trained as specialists despite a greater demand for generalists. Also, training opportunities are concentrated in specific geographic regions and urban areas, and the training system is not increasing the number of physicians willing to locate to rural areas with underserved populations.

Although some "stakeholders and policymakers" warn of a looming physician shortage and advocate for additional Medicare funding for residency and fellowship slots, this would do little to resolve workforce shortages in regions of the country where shortages are most acute or ensure a proper balance of specialties or adequate staffing of changing care settings, the report notes.

There is also "worrisome evidence that newly trained physicians in some specialties have difficulty performing simple office-based procedures and managing routine conditions. In addition, medical educators report that GME curriculums lack sufficient emphasis on care coordination, team-based care, costs of care, health information technology, cultural competence, and quality improvement — competencies that are essential to contemporary medical practice," the report warns.

2-Part System

To address these and other concerns, the report calls on the US Department of Health and Human Services (HHS) to establish a 2-part governance infrastructure: a Graduate Medical Education Policy Council within the HHS Secretary's Office to oversee policy and decision making, and an office within the Centers for Medicare & Medicaid Services to oversee fund distribution.

The report also says Medicare support should be provided through 2 distinct funds: an operational fund to finance ongoing residency training activities, and a transformational fund to finance new training slots where needed, provide technical support, and support much needed research and innovative pilot programs.

To encourage training at a variety of sites, funds should be distributed directly to the organizations that sponsor physician training programs, including hospitals, clinics, and universities, and the payment methodology should be replaced with a single national, per resident amount, the report says.

The report suggests a 10-year transition period to fully implement its recommendations, followed by a reassessment of the need for continuing Medicare funding.

The report was funded by the Josiah Macy Jr. Foundation, American Board of Internal Medicine Foundation, Aetna Foundation, California Endowment, California HealthCare Foundation, Commonwealth Fund, East Bay Community Foundation, Jewish Healthcare Foundation, Kaiser Permanente Institution for Health Policy, Missouri Foundation for Health, Robert Wood Johnson Foundation, UnitedHealth Group Foundation, Health Resources and Services Administration, and the US Department of Veterans Affairs.

"Graduate Medical Education That Meets the Nation's Health Needs." IOM. July 29, 2014. Overview

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