The federal government spends more than $11.5 billion on graduate medical education—or about $100,000 for each of the 115,000 physicians in resident training—but questions on how much to spend and how to spend it are unanswered, according to an online Health Affairs policy brief
Medicare provides $9.5 billion for residency training and Medicaid kicks in an additional $2 billion, according to the brief. Most states provide additional funds through their Medicaid programs, which accounted for about $3.78 billion in 2009.
But at least half that total came from federal matching funds, and many states have reduced their GME support since then, according to the brief written by Catherine Dower, associate director of the University of California San Francisco's Research Center for the Health Professions.
Other federal dollars are provided by the defense and veterans affairs departments, the Health Resources Services Administration and the National Institutes of Health. Private insurance also supports resident training by paying teaching hospitals a higher rate than they typically pay other hospitals, Dower wrote.
Of the $9.5 billion Medicare provided in 2010, $3 billion went toward direct payments for resident and supervising physician salaries and $6.5 billion was made in indirect payments used to cover the cost of training programs. The Simpson-Bowles National Commission on Fiscal Responsibility and Reform
recommended reducing direct GME payments to equal 120% of the national average for resident salaries and cut indirect payments to more accurately reflect a program's true cost. President Barack Obama, in 2011, recommended cutting GME funding to children's hospitals by 50%, Dower wrote.
Federal legislation to increase Medicare-funded resident positions introduced in 2011
did not pass. Two bills were introduced this year, with one having hospitals compete for extra GME funding and another seeking to boost Medicare-funded resident slots
With few exceptions, residency positions have been frozen since the Balanced Budget Act of 1997. Dower noted concerns that training more doctors could lead to patients receiving “unnecessary or even harmful” treatment and that increasing the number of resident positions in urban teaching hospitals would only exacerbate the physician “maldistribution” problem,
which leads to rural areas facing physician shortages.
“The unsettled state of GME financing provides an opportunity for care delivery sites, professions, educators, and policymakers to evaluate the number and types of healthcare professionals that will be needed in the future; how they should be educated and trained; how physicians in particular should be educated and trained; and the most appropriate amount of and use of public funding for these purposes,” Dower concluded.