Healthcare Business News

Residency reshuffling didn't help doc shortage: study

By Rich Daly
Posted: January 8, 2013 - 11:45 am ET

The results of a reshuffling of physician training slots a decade ago indicate that a similar initiative in the 2010 healthcare overhaul will do little to reduce shortages of primary-care or rural physicians, new research finds.

The redistribution of Medicare funding for physician graduate medical education, as called for by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, generally failed to reduce primary-care and rural physician shortages, a study published in the latest issue of Health Affairs concludes. Medicare officials shifted about 3,000 GME slots among the country's hospitals because of the law, but only 12 of the 304 hospitals receiving new positions were in rural areas. Also, a small increase in primary-care residency positions during this period was dwarfed by the growth in the larger number of slots of nonprimary-care specialties.

"It was not enough to counteract the prevailing forces that have created the problems," said Candice Chen, a senior research fellow at the National Institute on Minority Health and Health Disparities and one of the study's authors.

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The study did not identify the reason only 3% of the redistributed positions went to rural training, even though increasing such training in rural locations was a priority of the 2003 law and the CMS.

The findings bode ill for similar changes being implemented by the Patient Protection and Affordable Care Act, Chen said. The 2010 law required Medicare to redistribute unused residency positions preferably to primary care and general surgery programs focused on training for underserved areas.

But similar outcomes are likely, she said, because the law did not change the underlying factors driving medical graduates toward nonrural and nonprimary-care specialties, such as the linking of formulas that determine GME payments to Medicare’s hospital prospective payment system. The hospital prospective payment system is used as the vehicle for the GME formula's indirect payments provided to subsidize facilities' physician training expenses. That design thereby excludes outpatient settings from that category of GME payments.

Fewer rural training slots means fewer rural physicians, Chen said, because physicians are unlikely to work in such locations if they did not train there or in similarly underserved areas. And the result could be a worsening of the 20,000 primary-care physician shortage in rural areas identified by the American Association of Medical Colleges.

One rural training program that recently shut down was the Ohio State University Rural Family Medicine Program, a division of Mary Rutan Hospital, in Bellefontaine, Ohio. The six-person GME program graduated its last resident in November after the hospital struggled for years to find the extra funding for a program that Medicare capped at payments for less than two full positions, said Dr. Randall Longenecker, assistant dean of Rural & Underserved Programs at Ohio University College of Osteopathic Medicine.

"The problem is that we're kept small by the current system of funding," Longenecker said.

Setting aside funding for rural and primary-care GME positions does not work, he said, because it is too easy for large urban teaching hospitals to game the system by tweaking the design of their programs to qualify for funding under requirements that target providers in underserved areas. Additionally, GME indirect payments are based on the ratio of residents to hospital beds, so larger hospitals are favored over smaller community and rural hospitals.

A smaller provision of the healthcare reform law that may provide some expansion of rural and primary-care slots is the Teaching Health Centers grant program, which will fund primary-care residency training in largely underserved areas.

“It sends the money for training residents directly to the residency program and requires that the programs be anchored in an actual practice or community health center,” Longenecker said. “The problem with passing the money through hospitals or any other entity is that everyone takes their pound of flesh and the amount of money that actually goes to the residency training is much less.”

Chen said that although only one rural provider received such a grant in the first round of funding offered, a growing number have applied in subsequent rounds.

Also studying the issue of GME slot distribution is the Institute of Medicine, which launched a review last year of the governance and financing of physician resident training.

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