On Tuesday, the Institute of Medicine issued a report that calls for major restructuring of Graduate Medical Education (GME) financing “to allow a transition to an accountable, performance-based system” to fund graduate medical education over the next ten years. The report, coming from a prestigious and highly influential 21-person committee of experts, has created a firestorm of reaction—ranging from the American Association of Medical College’s dire warning that the IOM would “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” to the American Academy of Family Physicians (AAFP) applauding the IOM for its recommended overhaul even though “AAFP has advocated for quicker change on a larger scale.” ACP, in a statement issued today, found elements of the IOM report that it likes—and elements of concern.
This is what the fuss is all about:
1. The IOM would keep the aggregate amount of GME financing flat for a decade (with only adjustments for inflation). Physician organizations (including ACP and AMA), the AAMC, and many outside experts believe that GME funding needs to be increased, across the board (AAMC and AMA) or selectively and strategically (ACP), to fund more residency positions in fields where there is a documented shortage, especially in primary care.
2. The IOM’s call for flat funding reflects its views that:
a. Current GME dollars are not being spent wisely or effectively: “Advocating for increased federal GME funding would be irresponsible without evidence that the public’s current level of investment is helping to produce the workforce needed in the 21st century. At the same time, Medicare GME funding should not be reduced from current levels if it can be leveraged for greater public benefit.”
b. There is “no credible data” that there will be a physician shortage, especially in primary care. The IOM suggests that increased use of telemedicine, relying more on non-physicians including NPs and PAs, and changing primary care physicians’ roles “from being central to a more consultative role” could eliminate the shortage projected by other studies of anticipated supply and demand.
While ACP and many others in medicine would agree that current GME dollars could be spent more effectively and strategically, we strongly disagree with the IOM’s surprising conclusion that there is “no credible data” of a shortage of primary care physicians, or in other specialties. From ACP’s statement on the IOM report:
“ACP is very concerned, however, that the IOM did not make recommendations that address the nation’s looming physician workforce crisis. We are particularly concerned that the IOM stated that it ‘did not find credible evidence’ to support claims that the nation is facing a looming physician shortage, particularly in primary care specialties. Paradoxically, the IOM also suggested that ‘GME funds might be used to finance new incentives for choosing a primary care career,’ even as it questioned whether a primary care shortage exists. Although we concur with the IOM that more research is needed to guide physician workforce policies and that incentives, including payment reform, are needed to encourage careers in primary care, we believe there is credible evidence of a real and growing shortage of primary care physicians for adults warranting immediate action. It is estimated by highly credible analyses that the nation will need 44,000 – 46,000 additional primary care physicians by 2025. This figure does not take into account the increasing demand for primary care services as an estimated 25 million uninsured Americans will obtain coverage through the reforms in the Affordable Care Act.”
3. The IOM would divide the flat aggregate dollar amount of GME funding into two pools, the Operational Fund, which would fund traditional GME programs, and a new Transformation Fund, which would “finance initiatives to develop and evaluate innovative GME programs, to determine and validate appropriate GME performance measures, to pilot alternative GME payment methods, and to award new Medicare-funded GME training positions in priority disciplines and geographic areas.” Because overall GME funding would be budget neutral, money would be taken away from traditional GME programs funded by the Operational Fund to pay for the new Transformation Fund.
The result would be a redistribution from traditional teaching programs and affiliated hospitals, paid out of the Operational Fund, to grant-funded “innovative programs” paid out of the Transformation Fund.
(The Operational Fund allocations begin at 90 percent of the total Medicare GME fund, decrease to 70 percent over roughly 3 years and remain at that level for several years, and then return to 90 percent by the 10th year. The Transformation Fund would be allocated the balance of the funds - thus starting at 10 percent of the total, moving up to 30 percent as GME pilots and activities gear up and then returning to the 10 percent allocation as successful pilots and research establish the basis for broad application of GME improvement initiatives, including additional slots.)
It is this redistribution that has AAMC warning about “destabilization” of a GME system that is “widely regarded as the best in the world.” ACP, for its part, stated that it “joins with the IOM in its call for innovation and transformation in GME, including a greater emphasis on training in community-based settings, but we are very concerned that reducing GME payments to existing programs to fund innovation and transformation could do great harm to the educational mission of many teaching hospitals and the patients they serve.”
4. The IOM states that GME is a public good— it benefits all of society, not just those who directly purchase or receive it. Yet the IOM rejected the idea of establishing an all-payer fund to finance GME, arguing that Medicare funding provided more stability. Advocates for all-payer funding, ACP included, argue that because GME is a public good, all payers should pay into it—and that spreading the pool of financing to include public and private payers would be less risky than relying mostly on Medicare.
Still, much of what the IOM recommends resonates with the ACP policy that “Payment of Medicare GME funds to hospitals and training programs should be tied to the nation’s health care workforce needs. Payments should be used to meet policy goals to ensure an adequate supply, specialty mix, and site of training.” Going forward, ACP plans to analyze the IOM report further, “offering our suggestions in the spirit of building upon the many imaginative reforms recommended in the report. We will also continue to advocate for policies to ensure an adequate supply of physicians to meet the nation’s health care needs, including strategic increases in the number of Medicare-funded GME positions in primary care and other specialties facing shortages.”
Today’s question: What is your reaction to the IOM report?