1. MERC: MEDICAL EDUCATION & RESEARCH COSTS MINNESOTA’S CLINICAL TRAINING SUPPORT PROGRAM Mark Schoenbaum Minnesota Department of Health September 22, 2014

2. Original MERC Principles Medical education benefits society at large, not just direct health care stakeholders. The cost of medical education should not be borne by only a few hospitals or medical centers, but fairly allocated across the health care system.

3. 1995 MERC Task Force Teaching institutions should be responsive to evolving workforce needs related to specialty, profession and skill mix; Health workforce should support cost, access and quality goals; Public policy incentives should be developed to promote training of generalists, resolve maldistributions, and influence gender/diversity mix.

4. MERC Formula Timeline MERC 1998-2003:100% Cost per FTE PMAP 2001-2003:50% Cost per FTE 50% MA volume 2004-2007:67% cost per FTE, 33% MA volume 10% discretionary fund 2007-2013: 100% MA volume 20% bonus for high volume 2014 - on: 100% MA volume 10% bonus, ends in 2016 Roughly $600M distributed since 1998

5. MERC Sources and Uses

6. MERC Funds outside the formula Public program funds from DHS: $2,157,000 to the University of Minnesota Board of Regents for the purposes in sections 137.38 to 137.40; $1,035,360 to Hennepin County Medical Center for clinical medical education; $17,400,000 to University of Minnesota for purposes of medical education; $1,121,640 to clinical education dental innovation grants Health Care Access Fund: $1,000,000 to family medicine residency programs outside the 7-county metro area focused on training of family medicine physicians to serve non-metro communities.

7. MERC Formula Funds – 2014 base

8. MERC Formula 2014 - present Training site must be a Medicaid provider Funds divided based on relative Medicaid volume among all applicants Outlier limiters: Site must have at least.1 trainee FTE No sites shall receive a grant per FTE trainee that is in excess of the 95th percentile grant per FTE across all sites No site can receive more than its reported expenditures Bonus to largest sites phased out 20% through FY 13, 10% in FY 14 & 15, 0% thereafter

9. MERC Eligibility Accredited clinical education programs for: Site must be funded in part by patient care revenues and be a Medicaid site PhysiciansPharmacists DentistsChiropractors Advanced Practice RNsPhysician Assistants PsychologistsDental therapists and advanced dental therapists Clinical social workersCommunity paramedics Community health workers

10. Use of MERC Funds Funds flow from MDH –> Sponsoring Institution –> Training Site Funds must be spent on clinical training Sites must report their expenses

11. 2014 MERC Distribution 369 distinct sites received MERC funds 83.9% of funding to hospitals 10.9% to physician clinics 2.5% to Pharmacies 1.1% to Federally Qualified Health Centers 0.1% to Dental Clinics 71.1% of grant to Hennepin/Ramsey counties

13. 2014 MERC Distribution Top 20 Grant Recipients Clinical Training FacilityLocationMHCP Provider TypeFTEsGrant HENNEPIN COUNTY MEDICAL CENTERMINNEAPOLISHOSPITAL403.0$11,123,229 UMMC FAIRVIEWMINNEAPOLISHOSPITAL466.6$4,811,309 REGIONS HOSPITALST PAULHOSPITAL176.0$4,394,591 CHILDRENS HEALTH CARE MINNEAPOLISMINNEAPOLISHOSPITAL46.2$3,155,302 ABBOTT NORTHWESTERN HOSPITALMINNEAPOLISHOSPITAL78.4$2,208,541 NORTH MEMORIAL HEALTH CAREROBBINSDALEHOSPITAL40.0$2,077,248 MAYO CLINIC HOSPITAL ROCHESTERROCHESTERHOSPITAL450.3$2,001,856 ST CLOUD HOSPITALST CLOUDHOSPITAL13.5$1,999,411 CHILDRENS HOSPITALS & CLINICS OF MNST PAULHOSPITAL51.4$1,741,437 UNITED HOSPITAL INCST PAULHOSPITAL16.4$1,728,344 HEALTHEAST ST JOSEPHS HOSPITALST PAULHOSPITAL25.7$1,114,428 HEALTHEAST ST JOHNS HOSPITALMAPLEWOODHOSPITAL7.8$993,652 GILLETTE CHILDRENS SPEC HOSPST PAULHOSPITAL15.9$961,707 ESSENTIA HLTH ST MARYS MEDICAL CNTRDULUTHHOSPITAL28.9$958,830 PARK NICOLLET METHODIST HOSPST LOUIS PARKHOSPITAL30.7$891,551 MAYO CLINICROCHESTERPHYSICIAN434.5$798,072 MERCY HOSPITALCOON RAPIDSHOSPITAL6.8$666,858 PARK NICOLLET CLINICSST LOUIS PARKPHYSICIAN8.8$542,276 FAIRVIEW SOUTHDALE HOSPITALMINNEAPOLISHOSPITAL5.4$540,271 MAYO CLINIC HOSPITAL ROCHESTERROCHESTERHOSPITAL172.8$486,139

14. 2014 MERC Distribution Grant Ranges Grant % Number of SitesFTEs $1,000,000 to $5,000,000 2% 111,767 $500,000 to $999,999 1% 8539 $100,000 to $499,999 5% 32314 $50,000 to $99,999 6% 3783 $20,000 to $49,999 15% 96290 $10,000 to $19,999 12% 7270 $5,000 to $9,999 13% 8356 $1,000 to $4,999 5% 303 Distinct Total369*3,221 The table below shows the number of sites and FTEs within specific grant ranges. Facilities receiving a grant less than $5,000 qualified only for cigarette tax funds. * 252 additional applicants qualified for a grant under $1,000 and received no funds

15. Contact Information Mark Schoenbaum mark.schoenbaum@state.mn.usmark.schoenbaum@state.mn.us, 651-201-3859