Policy update: Graduate Medical Education funding

1. Policy update: Graduate Medical Education funding Jeffrey R. Jaeger, MD, FACP University of Pennsylvania Health System

2. Outline • How is GME funded? • What’s wrong with this picture • Supercommittee Primer • Potential scenarios • Advocacy opportunities

3. Graduate Medical Education (GME) funding • GME is funded through Medicare (CMS) • Since 1980’s: 2 “funding streams”: Indirect and Direct • Indirect Medical Education expenses: • Factored in as an adjustment to Medicare billings: • Varies based on resident/bed ratio, capped at 5.5% add on • Example: If usual Medicare DRG is $10000, we get $10550 • Intended to cover: • Sicker patients • More complex patients • More advanced diagnostic and therapeutic modalities • Longer lengths of stay and additional testing

4. GME Funding (cont.) • Direct Medical Education expenses: • Intended to cover salaries, benefits, administrative costs, overhead, malpractice, faculty teaching time • Hospital-specific per-resident amount (PRA) based on costs to educate residents in 1983 • PRA adjusted for inflation but not work hours reform, competencies, oversight rules • Hospitals’ DME reimbursement = (# of residents*) x (PRA**) x (% of hospital’s business attributable to Medicare) *Capped at 1997 numbers of residents ** Large variations between hospitals

5. GME Funding (cont.) • IME > DME for most hospitals treating adult patients* • DME + IME = $9 billion+ annually for 100000+ residents and fellows nationally • Estimates are that current funding just about covers costs (Steinmann, Annals, 2011) * Pediatrics has a separate funding stream also through Medicare

6. What’s wrong with this picture? • From Washington: • 2010 Deficit Commission: Charged with making proposals to address the debt / deficit • Recommendation 3.3.5: “Reduce excess payments to hospitals for medical education” • There’s a sense that someone other than CMS / taxpayers (profession, hospitals, other insurers) should be funding training • Proposal: Fix DME at 120% of salary and cut IME to 2.2% = $6 billion a year saved • Did not gain enough consensus to make it to Congress

7. What’s wrong with this picture? (2) • From multiple sources (lay press, academia, politicians): • If GME is going to be publicly funded, then public priorities should inform GME • Might we structure GME funding to achieve some agreed-upon policy goals? • Impact workforce? • Bend the cost curve? • Speed changes in healthcare delivery?

8. Supercommittee Primer • Joint Select Committee on Deficit Reduction • 12 Congressmen and –women • 6 Senate, 6 House; 6 Dems, 6 GOP • Must come to consensus on cutting $1.2 trillion over 10 years or automatic cuts go into effect for things near and dear to both parties • GME again in the crosshairs with this group

9. Impact of GME cuts • Some hospitals will fold their residencies • Those that do not: • Most will have to find alternative ways to fund resident education • Many will make cuts: • Administration • Teaching supplements • Benefits • Numbers of residents?

10. Impact of GME cuts (cont.) • Fewer residents means fewer man-hours available for inpatient care • Hospitals will need to hire more extenders or shift rotations from elective/outpatient to inpatient • But… Internal Medicine (IM) residents need to spend 1/3 of their time in outpatient, and 130 half-days in continuity clinic • Will the ACGME change the rules for the health of hospitals? • Or will they stand pat?

11. What about a legislative fix? • What might we see? • No change? • All-payer funding of GME? • $$$ shifted to programs training PCP’s? • It’s already in Healthcare Reform law (PPACA) • Will it include IM? • Who would pay to train specialists? • Support for development of new specialties?

12. What does it mean in the medium term? Anyone’s guess… • AMC’s and hospitals positioned to compete for funding directed at primary care education will be in better shape • AMC’s and hospitals positioned to find internal funding for GME will be in better shape • ACGME and ABIM may be under pressure to create paths to practice that more reliably produce the docs the nation thinks it needs

13. Pathways to advocacy • Call your Representative and/or Senators and ask to speak to the staffer for health care or education • Find contact information at http://www.usa.gov/Contact/Elected.shtml • Especially important if your Congressman or –woman is on the Supercommittee

14. Supercommittee Membership • House of Representatives: • Rep. Jim Clyburn (D-S.C.) • Rep. Xavier Becerra (D-Calif.) • Rep. Chris Van Hollen (D-Md.) • Rep. Jeb Hensarling (R-Texas) • Rep. Dave Camp (R-Mich.) • Rep. Fred Upton (R-Mich.) • Senate: • Sen. Max Baucus (D-Mont.) • Sen. John Kerry (D-Mass.) • Sen. Patty Murray (D-Wash.) • Sen. Jon Kyl (R-Ariz.) • Sen. Pat Toomey (R-Pa.) • Sen. Rob Portman (R-Ohio)

15. Advocacy (cont.) • ACP Capwiz has links facilitating advocacy on GME: http://capwiz.com/acponline/home/

16. When you write or call • Make it clear that you are a physician, caring for patients on Medicare, and that you support preserving funding for Graduate Medical Education • Personalized letters with stories about patients are the best • It’s important to acknowledge the reality that everyone is going to have to pitch in

17. Summary • GME funded mainly through CMS • Current solution to debt/deficit presents likely cuts to GME funding • Outcomes and impact remain unclear • Advocacy from academic medicine and from actual residents is critical