GME Modernization Bill Primary Care Workforce Access Improvement Act (HR 487) Regina Bray, MD VCU – Fairfax family medicine

History of GME Medicare started paying for GME in the 1960s Medicare paid for GME based on the cost needed to train residents, as dictated by the hospital Hospitals continued to increase the amount charged to Medicare for GME expenses In 1983 those costs were fixed with some allowance for inflation Since the 1960’s, Medicare has provided the majority of funding to support Graduate Medical Education (GME), the training that follows graduation from medical school. Funding comes in two forms, direct payments, which provide funds for salaries (both resident and attending physician) and indirect, which provide the funds for unforeseen costs of training such as longer hospital stays and higher number of tests ordered. Due to lack of accountability of funds, costs became fixed in the 1980s.

History of GME After 1983, the number of residency positions greatly increased, so instead of charging more per resident, hospitals increased the number of residents In 1997, Medicare placed a cap on the number of residents it would fund Between 1997 and now, new residency slots created by hospitals are not funded by Medicare, most are specialty based as specialties generate more revenue for the hospital compared to primary care residencies Given lack of accountability, after a monetary limit was placed per resident, hospitals increased the number of residents in programs to increase GME funds. The Balanced Budget Act of 1997 limited the number of residents funded by GME, therefore if hospitals were expanding programs, they were more likely to do so with higher revenue specialties in mind.

Residency Growth Cumulative change in the number of first-year residency positions by specialty from 1998 to 2008. Graham Center Policy One-Pager Loss of Primary Care Residency Positions Amidst Growth in Other Specialties NICHOLAS A. WEIDA, BA; ROBERT L. PHILLIPS, Jr., MD, MSPH; ANDREW W. BAZEMORE, MD, MPH;, MARTEY S. DODOO, PhD; STEPHEN M. PETTERSON, PhD; IMAM XIERALI, PhD; and BRIDGET TEEVAN, MS Am Fam Physician. 2010 Jul 15;82(2):121.

Residency Growth Correlating residency growth with income for specialty.

Why does GME need to be changed? Medicare funds per year for GME total $9.5 billion/yr Averages approx $100K per resident but varies widely Currently, there is a lack of accountability in use of funds No requirement to train the number of physicians that your community needs No requirement that they practice primary care

Why does GME need to be changed? Payment directly to hospitals to cover medical education expenses and additional patient care costs associated with training Incentives to treat acute illness which encourages hospitals to focus resources on specialization Minimal incentive for hospitals to consider the needs of the society Currently, the funding structure is centered around the hospital. Unfortunately, incentive for prevention and outpatient medicine is low (for the time being), and resources are focused on specialization. With the current model, the hospital controls funding to any outpatient centers/primary care offices offering educational services for the residency program.

Why does GME need to be changed? Between 2002 and 2007, hospitals increased residency positions by 7754 88.3% of these positions in specialty care1 Anticipated shortage of primary care physicians by 2020: 35,0002 We are not training primary care physicians in outpatient settings where 90% of health care occurs As previously stated, the push for creation of primary care residency positions is not there. Hospitals create specialty care positions due to increased revenue. This is a problem for multiple reasons. Most importantly the anticipated health care shortage which expects a shortage of 35,000 primary care doctors by 2020. Another issue is the setting in which most primary care residents are trained. Most spend the majority of their residency in the hospital, concentrating on acute issues and sickness, when the majority of healthcare takes place in the outpatient setting. Saslberg E, et al. US residency training before and after the 1997 Balanced Budget Act. JAMA. 2008 Sept 10; 300(10):1174-1180 Weida N, et al. Graham Center Policy One-Pager. American Family Physician. Vol. 82/No2(July 15,2010).

What can be done? Vast majority of patients are seeking care in the community, though the training is hospital dominated and the funding hospital dependent This bill proposes a shift in funding, directly to outpatient centers for training, instead of through hospitals The modernization bill seeks to change the GME structure with several goals in mind. GME payments will be directed to the outpatient centers responsible for training where primary care education is the mission. It will also increase funding for these primary care programs to support any added costs of training in the community, as the current formula does not adequately compensate for training in a nonhospital setting. Extra funds can be used to provide incentives for training in underserved or rural areas. Modernizing Primary Care Graduate Medical Education, Family Medicine Congressional Congress, May, 2013

GME Modernization Pilot Budget neutral Shift of $70 million a year (0.7% of the annual GME budget) 4 primary care residency models, 2 programs per model tested This pilot aims to shift monies already allotted for GME to these programs, making it “budget neutral”. 4 Residency Models (From Modernizing Primary Care Graduate Medical Education, Family Medicine Congressional Congress, May, 2013): Community based independent corporation working with 2 or more hospitals in running 1 or more residency program(s) Primary care residency program established by 2 or more hospitals with community representatives present on the governing board Corporation independently operating a residency program for the hospital with community participation in governing board Independent residency program collaborating with a hospital for education of its residents

GME Modernization Pilot Important Numbers Mean # of residents/program = 22 – plan to increase enrollment up to 50% (33 residents/program) Allow $268,000 per resident x 33  $8.8 million $8.8 million x 8 programs = $70.4 million/yr $70.4 million x 5 years = $352 million total It is, unfortunately, a numbers game.

GME Modernization Pilot Important Concepts Budget Neutral Redirection of funds Gives primary care residencies more freedom to use funds as they see fit; increase salaries or offer incentives to recruit more primary care physicians Facilitates unique training of primary care physicians to meet the needs of patients in the community The current GME system facilitates training inconsistent with the needs of society today. As our population grows and health care needs expand, emphasizing education in a setting consistent with current “real-life” practice is imperative to prepare high quality, competent physicians.

Goals “Reforming medical education will be a key component to transforming the nation’s health care delivery system from one that historically has focused on care for acute illness to one that values patient-centered care, quality improvement, and resource conservation” – Medicare Payment Advisory Commission (MedPAC)