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Is the Teaching Health Center Graduate Medical Education Program a Model for GME Reform?

I n this issue of the Journal of Graduate Medical Education, Regenstein et al describe the financial reporting instrument developed for the Teaching Health Center Graduate Medical Education (THCGME) program as a model for transparent, accountable graduate medical education (GME) financing that could inform a fiscally accountable national GME financing system. Most federal funding for GME is through the Medicare program, which uses outdated cost data and analyses to determine Medicare’s share of GME costs incurred by hospitals for residency training. The authors suggest that the THCGME Costing Instrument could be used by other residency programs to estimate the current costs of residency training and ultimately might replace Medicare’s formula-driven GME funding streams. Widespread systematic data collection that builds on the THCGME financial reporting instrument could inform issues regarding variation in ambulatory training costs across different specialties, training sites, and years of training. However, more fundamental GME reform is needed to bring greater accountability and transparency in the use of federal funds to meet future physician workforce needs. The THCGME program is targeted toward nonhospital, community-based training sites for selected specialties (family medicine, internal medicine, pediatrics, obstetrics and gynecology, geriatrics, psychiatry, and dentistry) in rural and underserved areas. Early findings indicate that the program is meeting its intended objectives. Yet the THCGME program, which in 2015–2016 had 210 physicians and dentists completing training, represents only a very small part of residency training and lacks stable funding that would make scalability feasible to meet the nation’s projected physician workforce shortages in these specialties. Programs accredited by the Accreditation Council for Graduate Medical Education (ACGME) had 12 936 physicians who completed training in THCGME-targeted medical specialties. Stabilizing the funding stream for the THCGME program is important, but increasing the output of generalist physicians by traditional residency training programs is more critical because they account for 98% of the potential pool of generalist physicians. Increasing the number of physicians in traditional programs who elect to become generalists by 5 percentage points will produce more generalists than doubling the THCGME program. Progress toward this objective could be made either through a fundamental structuring of GME federal funding, along the lines recommended in the Institute of Medicine’s 2014 report, or through updating the Medicare payment methodologies and incentivizing teaching hospitals (the current recipients of Medicare funding) to increase residency output in the targeted specialties. While fundamental reform is desirable from a policy perspective, revamping the Medicare payment methodologies may have greater feasibility. The Medicare payment methodologies are shaped in a statutory framework that requires program funds to flow to hospitals and other medical providers for services provided to Medicare beneficiaries. Unlike the Health Resources and Services Administration (HRSA) funding programs, Medicare GME funding is mandatory spending that does not require periodic appropriations. Given the current budgetary environment, it is likely that any financial incentives to promote generalist training will need to occur within current Medicare funding outlays and retain the concept of Medicare paying for its share of GME costs. Medicare limits the total number of residency positions that it will fund at a particular teaching hospital to the number of full-time equivalent residents training at the institution in 1996. Periodically, there have been reallocations of unused positions consistent with workforce needs. For example, the Affordable Care Act redistributed 599 unused positions for indirect medical education (IME) payments and 692 unused positions for direct graduate medical education (DGME) payments; 70% of the positions were allocated to hospitals in states with resident-to-population ratios in the lowest quartile, and 30% were allocated to hospitals in rural or health professional shortage areas. A hospital receiving the slots cannot reduce its predistribution average number of primary care residents for at least 5 years and must allocate at least 75% of the redistributed slots for primary care or general surgery. DOI: http://dx.doi.org/10.4300/JGME-D-18-00098.1