On May 18, the CMS issued a proposed regulation that would eliminate federal Medicaid matching payments for
the costs of graduate medical education. If enacted, this regulation would severely and perhaps irrevocably
compromise the ability of teaching hospitals to continue their critically important mission of training
physicians. As healthcare policy, this decision represents a stunning disregard for the long-term well-being
of our nations healthcare system.
The timing of this proposal could not be worse. The U.S. is on the brink of an alarming physician shortage
that will coincide with the medical demands of the retiring baby boomers. A 2005 report by the federal
Council on Graduate Medical Education, the nonpartisan advisory body created to provide recommendations to
the Bush administration and Congress, found that while the supply of physicians is expected to increase over
the next two decades, demand for services is likely to grow even more rapidly.
According to the Association of American Medical Colleges, the nation will have a shortage of at least
55,000 physicians by the year 2020. The AAMC has called for a 30% increase in U.S. medical school enrollment
by 2015, which would result in an additional 5,000 new physicians annually. Pursuing that goal would require
an increase in graduate medical education, or GME, programs. Given the amount of time it takes to educate
and train a physicianfour years of medical school plus multiple years of residency training2020 is right
GME funding reimburses teaching hospitals for the additional costs incurred in training physicians. Teaching
hospitals typically provide this intensive clinical training to individuals for three to seven years
(depending on the specialty chosen by the physician resident) after medical school graduation so physicians
can develop the necessary skills to practice autonomously.
In New York state alonewith 121 teaching hospitals, 56 of which are considered major teaching hospitals,
and where one out of every six practicing physicians in the U.S. is trainedtotal annual Medicaid GME
payments to hospitals are $1.2 billion. Clearly, the White House Office of Management and Budgets estimate
of the regulations impact on teaching hospitals nationwidea loss of $1.8 billion over five yearsis
Indeed, the CMS concedes that it has no accurate way of identifying precisely how much states pay in
Medicaid GME each year. It follows then that the CMS does not fathom how much its proposal would damage the
nations ability to produce needed physicians. But New York, 46 other states, and the District of
Columbiaall of which make GME payments through Medicaid to support physician trainingdo know the
implications, and they are devastating.
Consider the breadth and depth of contributions made by teaching hospitals24 hours a day, seven days a
weekas they train the next generation of doctors in a unique environment that combines cutting-edge patient
care with energetic young doctors, seasoned and intellectually engaged teaching physicians, research and
education. Without exception, the end results are innovation, medical breakthroughs and the advancement of
patient care. In hospitals serving Medicaid patients, it also allows for the provision of world-class
medical care to our most vulnerable residents.
So, at a time when the mission of our teaching hospitals to train the next generation of doctors has never
been more important, they face the prospect of severe funding cuts. Eliminating Medicaid GME funding would
be an astonishingly shortsighted policy.
Fortunately, there is short-term good news. A provision in the revised Iraq war funding bill that President
Bush signed into law on May 25 blocks for one year the implementation of the Medicaid GME rule. But come May
25, 2008, Medicaid GME funding will once again be on the chopping block. Hopefully, the CMS will change its
course and not seek to eliminate it.
Operating a teaching hospital is a very costly proposition. Hospitals that get GME payments are subject to
accreditation oversight that sets standards for the field and ensures quality.
Accreditation by the main national organization, the Accreditation Council for Graduate Medical Education,
is all but required because so much of teaching hospital funding hinges on appropriate accreditation.
Teaching hospitals must constantly adapt and adopt the latest medical technologies and practices to maintain
accreditation. They also serve disproportionate numbers of poor and uninsured patients and provide
undercompensated but critical services, such as trauma centers and burn units, as well as helping with
In short, teaching hospitals are indispensable.
Given whats at stake, it is imperative that Medicaid GME funding be protected. You do not address an
imminent physician shortage by drastically weakening the very institutions that do the training. It would be
the equivalent of a city addressing a violent crime wave by stripping its police officers of firearms,
handcuffs and radios.
In the U.S., the physician-training process follows a rigorous system so that the end productthe fully
trained, independent physiciancan provide the highest quality, state-of-the-art care that patients expect
and deserve. This pathway is built on a foundation of educators, senior physicians and administrators who
work together to ensure that the training of these physicians of tomorrow continues to serve as a model
for the rest of the world. It is vital, therefore, that all of the funding mechanisms that make this
treasured system work so well are fiercely protected. Our future health depends on it.
Kenneth Raske is president of the Greater New York Hospital Association, New York.