Graduate Medical Education (GME) Policy Mark D Schwartz MD

US Graduate Medical Education GME in the US is the envy of the world, graduating >100,000 new physicians for practice annually However, there is broad consensus* that current GME policy and practice are not well aligned with the needs of the US healthcare system in the 21st century *Inglehart JK. Financing Graduate Medical Education — Mounting Pressure for Reform. N Engl J Med 2012; 366:1562-1563.

GME Policy Problems Poor alignment of GME funding policy and US workforce needs Inadequate accountability by hospitals and GME programs for outcomes No transparency regarding use of funds by hospitals Inadequate curricular focus on competencies needed for healthcare reform

GME Policy History Pre 1965, hospitals had professional and financial responsibility for GME Medicare founded inappropriate to pay for GME with health care funds Founders reluctantly decided Medicare would temporarily pay its share as educational activities enhance value of patient care Medicare GME funding securely ensconced, with payments from the Medicare trust fund (Part A) 1984 GME incorporated into IPPS (DRG)

GME (CMS): Direct and Indirect Since 1984, GME funding has been split into Direct (DGME) and Indirect (IME) payments DGME: Partially offsets costs of resident and faculty salary/benefits and administrative costs for training IME: Adds a percentage to the DRG payment to account for higher costs incurred by teaching hospitals from caring for sicker-than-average patients and inefficiencies of care by trainees

DGME = # Residents * PRA * Medicare Share # of Residents: 3-year rolling average/hospital Aggregate residency FTEs capped at 1996 levels PRA: Per-Resident Amount from 1984 base year, updated annually by Consumer Price Index 1.0 FTE for initial residency period (IRP), minimum required for board eligibility, usually first 3 years 0.5 FTE beyond IRP (subspecialty fellowship) Medicare Share: proportion of Medicare beneficiary inpatient/total inpatient days

IME = c * [(1 + IRB ratio) 0.405 -1] Percentage add-on to Medicare DRG payment to adjust for teaching intensity IRB: intern/resident to bed ratio C is an IME multiplier set by policy; c=1.34  5.5% 5.5% increase in IME adjustment for every 10% increase in IRB ~1,100 hospitals get IME adjustments to IPPS payments ranging from <1% to 48% ~200 hospitals get 2/3 of the funds MedPAC’s calculation is that across all hospitals, a 10% increase in teaching intensity (IRB) is associated with only a 2.7% increase in Medicare costs per discharge

Stewardship of GME

Core Policy Questions Is GME a public good or a hospital cost? Is GME an educational or patient care expense? What is the appropriate role for Medicare in supporting GME? Should Medicare GME shape the physician workforce? Should Medicare GME remain mandatory spending (Part A) vs. discretionary spending?

GME Policy Strategies Market-based approach Regulatory approach Government hands off educational policy and workforce distribution Regulatory approach Government drives GME outcomes Incentive-based approach Influence GME via funding policy

GME Constituencies Advisory Organizations MedPAC COGME NAM (IOM) Stakeholders AAMC (& AHA) ACGME Every specialty society…

Advisory Organizations MedPAC - Medicare Payment Advisory Commission Independent agency established by the Balanced Budget Act of 1997 to advise Congress on Medicare COGME - Council on Graduate Medical Education (HRSA) Authorized by Congress (1986) to assess physician workforce trends, training issues and financing policies NAM – National Academy of Medicine (NAS) Established 1970 as IOM, non-partisan, independent advisor to the US (“Supreme Court of Science”)

MedPAC Hold back $3.5B and pay out via pay for performance program as per Secretary’s standards and metrics HHS should collect data and publish annual report GME funding, costs, and use per institution HHS to report on financial impact of GME on institutions with focus on variable impact by specialty Conduct workforce analysis number and mix of physicians needed in US

COGME Increase PC physicians in the US to 40% (from 32%) Increase reimbursement for PC physicians from 54% to 70% of that for all other physicians (as in 1990s) Medical schools should develop an accountable mission statement and measures of social responsibility … to foster a physician workforce of 40% PC Increase # of PC training slots (Title VII) and move more training into ambulatory, community practice environment Expand focus on geographic and socioeconomic distribution – NHSC, Title VII, and CHC funds

Stakeholders AAMC - Association of American Medical Colleges (1876) Private, independent, non-profit representing all medical schools and teaching hospitals Hospital Community AHA – American Hospital Association (non-profits) FAH - Federation American Hospitals (for-profits, 20%) ACGME - Accreditation Council for Graduate Medical Education Private, independent, non-profit responsible for GME accreditation

AAMC We need more docs! Lift the GME cap “Cutting physician training at a time when our nation faces a critical shortage of doctors would threaten the health of all Americans” Atul Grover

ACGME Evaluates and accredits more than 9,000 GME programs in 135 specialties and subspecialties CEO Tom Nasca ACGME will transform GME Self-regulation > federal funding policy

Recent GME Activity Budget Control Act of 2011 Sequestration: 2% cut in Medicare payment to hospitals President Obama’s FY14-17 budgets for HHS 10% cut in IME over 10 years ($9.7B) President Trump’s FY19 budget Consolidate GME in Medicare, Medicaid, and Children’s GME into a capped grant program

Resident Physician Shortage Reduction Act of 2017 S. 1148: Sen. Bill Nelson (D-FL) – 4 bipartisan cosponsors (Sen. Schumer) H.R.2267: Rep. Joseph Crowley (D-NY) – 73 bipartisan cosponsors Increase by 15,000 slots/5 years ½ for shortage specialties (HRSA?) Prioritize teaching hospitals In states with new med schools/branches Over GME cap Emphasizing ambulatory training

$3.5B in empirically unjustified IME Physician shortage – desire to raise GME cap by hospital community Desire to increase accountability and transparency of GME by MedPAC, CMS, and policy-makers  trade increased $/GME for P4P

Pay for Performance in GME Hold back a portion of payment and distribute in pay for performance policy Phase in… Pay for reporting structure/process outcomes Teaching environment – ambulatory/community sites, multi-professional teams, PCMH practice model, meaningful use of EHR Curriculum content – ACGME competencies, team (microsystem) skills, evidence-based medicine, care coordination skills, practice-based learning Specialty mix – favoring fields in shortage (PC)

Who to hold accountable? Who should be on the hook? Hospitals Programs Trainees