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IOM Calls for Changes to Graduate Medical Education Funding

Tighter oversight is needed for more than $15 billion spent yearly on doctor training in the US, according to a new report that’s already being attacked by medical centers that provide the education.

The report, released July 29 by the Institute of Medicine (IOM), calls for per-resident funding based on outcomes that address strategic needs in health care, such as the growing shortage of primary care doctors in some areas. It proposes a 10-year introductory period that would end the practices of basing payments on historical caps and the Medicare services provided.

Entitled ‘Graduate Medical Education That Meets the Nation’s Health Needs’, the report says that since the creation of the Medicare and Medicaid programs in 1965, the public has provided tens of billions of dollars to fund graduate medical education (GME), the period of residency and fellowship that is provided to physicians after they receive a medical degree. Although the scale of government support for physician training far exceeds that for any other profession, there is a striking absence of transparency and accountability in the GME financing system for producing the types of physicians that the nation needs.

The IOM formed an expert committee to conduct an independent review of the governance and financing of the GME system. The 21-member IOM committee concluded that there is an unquestionable imperative to assess and optimize the effectiveness of the public’s investment in GME.

In its report, the committee recommends significant changes to GME financing and governance to address current deficiencies and better shape the physician workforce for the future. The IOM provides an initial road­map for reforming the Medicare GME payment system and building an infrastructure that can drive more strategic investment in the nation’s physician workforce

The Washington Post wrote that the IOM panel says that groups participating in the GME program basically only have to report limited data to the federal government, leaving major questions about the program performance unanswered. Questions such as: Who’s being trained by the program? How much of the GME funding is used for education? Do doctors go on to practice in areas where there’s a shortage of physicians? And – probably most important – does the program produce competent doctors? On that last point, the IOM says the federal government doesn’t have data to measure whether the doctors are trained in patient safety or if they can provide coordinated care across different settings, a growing emphasis as America’s health-care system is changing to focus on preventive care and better management of chronic conditions.

According to Bloomberg, the move would have to be approved by Congress, which provides two-thirds of the $15 billion in public training money each year through its funding of Medicare (see figure).


The Association of American Medical Colleges, which represents 400 of the nation’s more than 1,000 teaching hospitals, opposes the recommendations, saying they would funnel federal dollars away from Medicare patients, and create uncertainty for their members.

“We are not taking money out of the system,” Gail Wilensky, a co-chairwoman of the institute panel that wrote the report, told Bloomberg. “But we think current expenditures, because of the lack of transparency and accountability, are difficult to justify.”

The report urges the creation of a new policy council to develop a strategic plan for doctor training, and a new office within the US Centers for Medicare and Medicaid Services to implement proposals and increase transparency of where the funds are used.

The IOM is a nonprofit volunteer organization that provides input on health policy to the government, and has been controversial in the past. Revising the payment rules for doctor training would try to “change the entire health-care system with 2% of Medicare funding,” the amount centers get to fund their training, Atul Grover, a college association spokesman, told Bloomberg. “Two percent isn’t going to overshadow the other 98%.”

Studies of future supply and demand in health care have projected physician shortages, the report found. Even with more doctors trained, the shortage in high-need areas is unlikely to be solved. Not many new doctors choose primary care or to practice in rural and underserved areas.

Goals such as increasing diversity in the physician workforce, encouraging a primary care focus and increasing access in underserved rural or urban areas should be reached through the use of payment incentives provided by the government, not with outcomes-based funding, Grover said.

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Kristine Novak

Kristine Novak

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About The Author:

Dr. Kristine Novak

Dr. Kristine Novak

Dr. Kristine Novak is a science writer and editor based in San Francisco. She has extensive experience covering gastroenterology, hepatology, immunology, oncology, clinical, and biotechnology research discoveries.

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