EDITORIAL
Rationalizing Funding of Graduate Medical Education
I
n late July, the Institute of Medicine issued its report on the federal government funding of Graduate Medical Education (GME) in the United States. The committee, headed by Donald Berwick and Gail Wilensky (former and current heads of the Centers for Medicare and Medicaid Services, widely known as the CMMS), noted that the federal government in 2012 paid $13 billion for GME through CMMS, and another $2 billion through the VA and other federal health systems. Given the background of the co-chairs it is no surprise that they concluded that the main problem with this system is that the trainees "have no obligation to practice in specialties and geographic areas where they are needed or to accept Medicare or Medicaid patients once they enter practice." The prescribed fix is to gradually move over the next 10 years to a system where the federal government flattens the payment per resident (which notoriously varies across the US), and adjusts payments to incent programs to train more residents for underserved parts of the US, and in underserved specialties, using government assigned measures of “performance.” The report recommends that a GME Council operating from the Department of Health and Human Services should determine policy for GME funding during that time, and a GME Center within CMMS should administer the program. Thus the measures of “performance” that would pay for GME for the next ten years would be driven by a group of CMMS bureaucrats, rather than professionals with decades of experience in training residents. The GME Council would then decide whether funding of GME should continue at all after the first 10 years. The hubris in this top-down prescription is staggering, but the effects on medical education in general, and on our own field of neurology in particular, are likely to be even more overwhelming. So, it is imperative for academic neurologists to understand what is going on here, and why it is so wrong. To understand how we got backed into the current system, which no one is happy with, one needs to know a bit of history. Since its inception, Medicare has not permitted payments for the services provided by residents as professional fees. Instead support for residency programs is folded into the payments to hospitals, and even though it is proportional to care the hospital provides for
CMMS patients, not actual education, this support is marked as “GME”. Because some hospitals have larger or more residency training programs than others, the payments were based on a per-resident formula. However, some hospitals were in areas where cost of living was greater, and the ratios of time spent in learning vs. service were also quite disparate. As a result, the payment per resident varied enormously across this system. These payments are further divided into Direct Medical Education (DME) payments, which cover some of the costs of salaries for residents and their teachers, and Indirect Medical Education (IME), which compensates for the anticipated greater costs for taking care of patients in a teaching environment, e.g., because residents would be less efficient in their workups than fully trained physicians, thus requiring longer and more expensive hospital stays. In addition, in 1996 CMMS capped the number of residency slots they would cover at any hospital based on their then-current allotment. Over the years, many teaching hospitals have exceeded this cap, but CMMS has not paid for any of their GME costs. This approach has raised a number of legitimate questions which were outlined in the IOM report. First, the payment system is focused on hospital-based services. While this may have been appropriate in 1965 when Medicare was new, a half century later we are seeing more of our services shift to the outpatient setting. The payment system for GME, however, is not structured to pay for time spent in non-hospital settings, such as outpatient offices in the community. Therefore it encourages training of residents in the inpatient environment, while the work of many clinicians, including neurologists, shifts out of that setting. A second problem identified by the IOM report is that the current GME system is not geographically aligned with the need for new physicians. The GME system is based upon the distribution of teaching hospitals in 1996, which for historical reasons has been skewed toward cities in the northeast. There are relatively few training sites in rural areas, and as the population of the US shifts from the “rustbelt” to the “sunbelt” the CMMS support for GME has not followed. This is in part because the residency caps have locked the US into the 1996 distribution of residency positions. On the other hand, it is not clear that doctors in training will C 2014 American Neurological Association V 467
ANNALS
of Neurology
necessarily be geographically bound to future practice sites in the areas where they trained. Many are attracted by the same geographic features (weather, housing costs, recreational opportunities) that are redistributing the entire US population, but others are attracted by academic opportunities in research-intensive medical centers. So, there is no a priori reason to believe that shifting training dollars to underserved areas will necessarily shift practicing doctors to those sites. It will, however, make it difficult for the current high quality programs to maintain as many training opportunities, and thus limit the choices of applicants. For academic neurologists, who train the residents in our field, this discussion has serious implications. It takes decades to build a first-rate training program, with a dedicated faculty, research opportunities, and highly capable clinical programs that will draw a wide variety of patients with the entire spectrum of neurological disease. It would take generations to move our clinical training sites, which are admittedly unevenly distributed, to other locations, and it is not clear what this would accomplish. The plan for flattening the payments for teaching, so that they are the same across the country, would also disadvantage the parts of the country where living expenses are high. In addition, it would devalue the programs that have made a larger investment in resident education, as opposed to service. The ultimate question raised is whether the federal government ought to be paying for education of residents at all. After all, they do not pay for training of medical students, or most other professions, and physicians will go on to earn adequate livings. While an argument could be made that the federal subsidy for GME should be curtailed, we would make the argument that this is the wrong focus in the first place. Residents are physicians who provide numerous and valuable (we would say invaluable) services. It is true that they spend a portion of their 80 hour work week in didactic training, but on the whole they probably spend more than 60 hours per week on direct patient service. We would argue that the problem here is that the system is being supported from the education side, while denying payment for what are obvious medical services that are not available at nonteaching hospitals. Our solution, then, would be to move toward a system where the services of residents are billed by the hospitals that employ them. The services could be paid at a rate that was less than that of fully trained physicians, and could be adjusted to be revenue-neutral to the federal government with respect to the current system. The cap on resident positions could also be eliminated, as the amount of service provided, not the number of bodies providing those services, would become the operative
468
parameter. The site of service would also be flexible, so that services of residents in outpatient settings could also be billed just as they are for fully trained physicians. This would allow adjusting resident schedules to prepare them for a future of increased ambulatory care. In addition, communities with strong training opportunities, but few residency positions under the CMMS cap, would be able to expand those programs. We would propose that hospitals likewise be able to charge for the professional inpatient time of midlevels (nurse practitioners and physician assistants), with this cost being set to be cost-neutral with the current hospital billing for inpatient care. This would put residency positions on an equal footing with midlevel positions in terms of providing inpatient care, and allow hospitals to hire the number of workers they need to provide care, while apportioning these positions to residents, as opposed to midlevels, based upon the educational opportunities available. Note that this proposal would be revenue-neutral to CMMS, but would move the payments for residents and other advanced professionals out from the current GME and hospital DRG budget, and into separate budgets that would be proportional to their services. Once the payments from CMMS for residents and midlevels is based upon service, we will then have a GME system that can be based upon the training opportunities, rather than raw need for hospital manpower or arbitrary and antiquated CMMS rules for training payment. The training time would be the part of a resident’s salary that would be uncompensated, as is other training time that physicians undertake throughout their careers. Hospitals would continue to want to train residents because they provide an especially high level of care for their salary level. Hospitals that provide complex services, which require that higher level of care, would want the best residents, and would be incented to attract them with the quality of their training programs. By contrast, putting in place the alternative rules proposed by the IOM would be even more arbitrary than the current situation. It would create an entire new bureaucracy to administer the new “performance based” strategies for paying for residency programs. Meanwhile, the defunding of the current training environment would destroy an educational system that has taken decades to build, and which, judging by the number of international graduates trying to enter our system, is widely acknowledged as one of the best in the world. Clifford B. Saper, MD, PhD Editor-in-chief
DOI: 10.1002/ana.24278
Volume 76, No. 4
Rationalizing Funding of Graduate Medical Education
I
n late July, the Institute of Medicine issued its report on the federal government funding of Graduate Medical Education (GME) in the United States. The committee, headed by Donald Berwick and Gail Wilensky (former and current heads of the Centers for Medicare and Medicaid Services, widely known as the CMMS), noted that the federal government in 2012 paid $13 billion for GME through CMMS, and another $2 billion through the VA and other federal health systems. Given the background of the co-chairs it is no surprise that they concluded that the main problem with this system is that the trainees "have no obligation to practice in specialties and geographic areas where they are needed or to accept Medicare or Medicaid patients once they enter practice." The prescribed fix is to gradually move over the next 10 years to a system where the federal government flattens the payment per resident (which notoriously varies across the US), and adjusts payments to incent programs to train more residents for underserved parts of the US, and in underserved specialties, using government assigned measures of “performance.” The report recommends that a GME Council operating from the Department of Health and Human Services should determine policy for GME funding during that time, and a GME Center within CMMS should administer the program. Thus the measures of “performance” that would pay for GME for the next ten years would be driven by a group of CMMS bureaucrats, rather than professionals with decades of experience in training residents. The GME Council would then decide whether funding of GME should continue at all after the first 10 years. The hubris in this top-down prescription is staggering, but the effects on medical education in general, and on our own field of neurology in particular, are likely to be even more overwhelming. So, it is imperative for academic neurologists to understand what is going on here, and why it is so wrong. To understand how we got backed into the current system, which no one is happy with, one needs to know a bit of history. Since its inception, Medicare has not permitted payments for the services provided by residents as professional fees. Instead support for residency programs is folded into the payments to hospitals, and even though it is proportional to care the hospital provides for
CMMS patients, not actual education, this support is marked as “GME”. Because some hospitals have larger or more residency training programs than others, the payments were based on a per-resident formula. However, some hospitals were in areas where cost of living was greater, and the ratios of time spent in learning vs. service were also quite disparate. As a result, the payment per resident varied enormously across this system. These payments are further divided into Direct Medical Education (DME) payments, which cover some of the costs of salaries for residents and their teachers, and Indirect Medical Education (IME), which compensates for the anticipated greater costs for taking care of patients in a teaching environment, e.g., because residents would be less efficient in their workups than fully trained physicians, thus requiring longer and more expensive hospital stays. In addition, in 1996 CMMS capped the number of residency slots they would cover at any hospital based on their then-current allotment. Over the years, many teaching hospitals have exceeded this cap, but CMMS has not paid for any of their GME costs. This approach has raised a number of legitimate questions which were outlined in the IOM report. First, the payment system is focused on hospital-based services. While this may have been appropriate in 1965 when Medicare was new, a half century later we are seeing more of our services shift to the outpatient setting. The payment system for GME, however, is not structured to pay for time spent in non-hospital settings, such as outpatient offices in the community. Therefore it encourages training of residents in the inpatient environment, while the work of many clinicians, including neurologists, shifts out of that setting. A second problem identified by the IOM report is that the current GME system is not geographically aligned with the need for new physicians. The GME system is based upon the distribution of teaching hospitals in 1996, which for historical reasons has been skewed toward cities in the northeast. There are relatively few training sites in rural areas, and as the population of the US shifts from the “rustbelt” to the “sunbelt” the CMMS support for GME has not followed. This is in part because the residency caps have locked the US into the 1996 distribution of residency positions. On the other hand, it is not clear that doctors in training will C 2014 American Neurological Association V 467
ANNALS
of Neurology
necessarily be geographically bound to future practice sites in the areas where they trained. Many are attracted by the same geographic features (weather, housing costs, recreational opportunities) that are redistributing the entire US population, but others are attracted by academic opportunities in research-intensive medical centers. So, there is no a priori reason to believe that shifting training dollars to underserved areas will necessarily shift practicing doctors to those sites. It will, however, make it difficult for the current high quality programs to maintain as many training opportunities, and thus limit the choices of applicants. For academic neurologists, who train the residents in our field, this discussion has serious implications. It takes decades to build a first-rate training program, with a dedicated faculty, research opportunities, and highly capable clinical programs that will draw a wide variety of patients with the entire spectrum of neurological disease. It would take generations to move our clinical training sites, which are admittedly unevenly distributed, to other locations, and it is not clear what this would accomplish. The plan for flattening the payments for teaching, so that they are the same across the country, would also disadvantage the parts of the country where living expenses are high. In addition, it would devalue the programs that have made a larger investment in resident education, as opposed to service. The ultimate question raised is whether the federal government ought to be paying for education of residents at all. After all, they do not pay for training of medical students, or most other professions, and physicians will go on to earn adequate livings. While an argument could be made that the federal subsidy for GME should be curtailed, we would make the argument that this is the wrong focus in the first place. Residents are physicians who provide numerous and valuable (we would say invaluable) services. It is true that they spend a portion of their 80 hour work week in didactic training, but on the whole they probably spend more than 60 hours per week on direct patient service. We would argue that the problem here is that the system is being supported from the education side, while denying payment for what are obvious medical services that are not available at nonteaching hospitals. Our solution, then, would be to move toward a system where the services of residents are billed by the hospitals that employ them. The services could be paid at a rate that was less than that of fully trained physicians, and could be adjusted to be revenue-neutral to the federal government with respect to the current system. The cap on resident positions could also be eliminated, as the amount of service provided, not the number of bodies providing those services, would become the operative
468
parameter. The site of service would also be flexible, so that services of residents in outpatient settings could also be billed just as they are for fully trained physicians. This would allow adjusting resident schedules to prepare them for a future of increased ambulatory care. In addition, communities with strong training opportunities, but few residency positions under the CMMS cap, would be able to expand those programs. We would propose that hospitals likewise be able to charge for the professional inpatient time of midlevels (nurse practitioners and physician assistants), with this cost being set to be cost-neutral with the current hospital billing for inpatient care. This would put residency positions on an equal footing with midlevel positions in terms of providing inpatient care, and allow hospitals to hire the number of workers they need to provide care, while apportioning these positions to residents, as opposed to midlevels, based upon the educational opportunities available. Note that this proposal would be revenue-neutral to CMMS, but would move the payments for residents and other advanced professionals out from the current GME and hospital DRG budget, and into separate budgets that would be proportional to their services. Once the payments from CMMS for residents and midlevels is based upon service, we will then have a GME system that can be based upon the training opportunities, rather than raw need for hospital manpower or arbitrary and antiquated CMMS rules for training payment. The training time would be the part of a resident’s salary that would be uncompensated, as is other training time that physicians undertake throughout their careers. Hospitals would continue to want to train residents because they provide an especially high level of care for their salary level. Hospitals that provide complex services, which require that higher level of care, would want the best residents, and would be incented to attract them with the quality of their training programs. By contrast, putting in place the alternative rules proposed by the IOM would be even more arbitrary than the current situation. It would create an entire new bureaucracy to administer the new “performance based” strategies for paying for residency programs. Meanwhile, the defunding of the current training environment would destroy an educational system that has taken decades to build, and which, judging by the number of international graduates trying to enter our system, is widely acknowledged as one of the best in the world. Clifford B. Saper, MD, PhD Editor-in-chief
DOI: 10.1002/ana.24278
Volume 76, No. 4
