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FINANCING PRIMARY CARE RESIDENCY TRAINING EXAMPLES AND LESSONS FROM SUCCESSFUL PROGRAMS Robert A. Walkington Introduction The past decade has been a time of ferment in American medicine. The career of the physician beginning practice in the 1990s watt differ significantly from that of the physician who began practice in the 1970s. One major difference will be the greater extent to which that practice is conducted in an ambulatory setting. This change has led many people to conclude that the traditional reliance on the hospital as the site of graduate medical education (GME) must be modified to include an increased emphasis on ambulatory care. This conclusion has been strengthened by the changes occurring in the nature of hospital utilization which has made the hospital a less satisfactory site for the educational experience, particularly for the primary care physician (AAMC, 1987; New York State Council on Graduate Medical Education, 1988; Gaste! and Rogers, 1989~. These factors have led a number of groups and individuals to recommend strengthening the ambulatory care experience in general internal medicine, general pediatrics, and family practice residency programs. For example, the report of the New York State Commission on Graduate Medical Education stated: "The Commission therefore recommends that the graduate medical education of specialists in general internal medicine, general pediatrics, general obstetrics/gynecology and family medicine should include an appropriate balance of outpatient and inpatient experience". The Commission went on to state that "a significant part of residency training should take place in ambulatory care settings." (New York State Commission on Graduate Medical Education, 19861. Similar conclusions and recommendations were reached by the Council on Graduate Medical Education (COGME) which in its 1988 report to the Secretary of DHHS recommended "... a concerted emphasis on training in ambulatory settings ..."This recommendation was based on the Council's conclusion that GME in ambulatory settings is increasingly necessary in many specialties for optimal training and preparation for practice (Council on Graduate Medical Education 198Sb). Similar views have been expressed by Ebert and Ginzberg (1988), by 230

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participants in the conference on Medical Education in the Ambulatory Setting (Stanford 1987) the Health Resources and Services Administration (HRSA) Conference on Primary Care Medical Education (1988) and in a number of recent articles (Moore, 1986; Perkoff, 1986, 1988; Kosecoff, et. al. 1987, Schroeder, 19881. While there has been general (though not unanimous) agreement on the desirability of increasing the ambulatory focus of graduate medical education, particularly for the primary care specialties, there are a number of practical barriers to implementing changes. One of the major barriers is how to finance this new (or in the case of family practice, continuing) emphasis on ambulatory based education. The Council on Graduate Medical Education concluded that: "There are difficulties in financing GME in ambulator setting, related to lower levels of payment by third parties and to increased logistical problems in teaching. The current financing of GME results in disincentives for ambulatory training ... The financing of GME is particularly problematic for the areas of primary care, geriatrics and preventive medicine" (Council on Graduate Medical Education, 19881. In a recent draft position paper, the Association of Program Directors in Internal Medicine (APDIM) recommends major changes in financing internal medicine training programs in ambulatory care. The paper declares: "A major obstacle to the development of educational programs in ambulatory care has been the failure of the payment system to fully compensate for the educational costs of post-graduate training in ambulatory settings". The HRSA Conference on Primary Care Medical Education concluded that "the limited reimbursement for primary care services and teaching have seriously constrained the success and growth of primary care education and the production of appropriately trained primary care physicians" (HRSA, 19881. A recent article on family practice residency programs concluded that ambulatory care training suffers from the twin problems of lower revenues and higher costs (Ricketts et al., 1986). Similarly, in a presentation to COGME's Graduate Medical Education Programs and Financing Sub-Committee, Dr. Frederic Berg stated that "there is poor support for ambulatory education in pediatrics." To remedy this problem he recommended that "any new system of financing GME should provide support for training of residents in ambulatory settings including outpatient units and HMOs as well as inpatient settings" (COGME, 1987a). 231

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In addition to urging increased use of the ambulatory setting for GME most commentators have described problems with the current financing of GME which inhibit such use. This paper, which first reviews the major problems in financing primary care education in ambulatory settings, describes some programs that have succeeded in making the needed shift in the site of training, and draws lessons from the experiences of the programs. Problems With Current Financing of Ambulatory Primarv Care Education There is general agreement that it is more difficult to finance ambulatory primary care GME than inpatient GME but less agreement on whether this is caused by higher costs, a financing system tilted in favor of education in the hospital setting, inefficiencies in the delivery of services and education in the ambulatory setting or some combination of factors. Boufford in a recent article identified the most important issue as the "fundamental financing of ambulatory service and education". She states that "patient care revenues appear to be the major source of support for ambulatory care teaching, though they clearly are not sufficient to cover costs". This is attributed to the fact that while third-party payers include education costs as part of their reimbursement for inpatient services they are much less willing to do this for outpatient services (Boufford, 1989). John Kasonic identified key sources of current and future support of GME in the ambulatory setting as patient revenues, governmental subsidies (for both teaching and indigent care), grants, university general funds, and "networking with traditionally non-teachina providers". He believes that the maiori~r of financial _ ~ ~ ~ or support will continue to come from patient care revenues and that the adequacy of such financing will depend on improving the economy and efficiency with which the ambulator settings operate (in terms of patient care and education) (Kasonic, 1987). Watt (1987) identifies sources of financial support for GME as patient care funds, direct federal support for education, and direct educational support by state and local governments. He lists a number of problems in the current financing of GME in the ambulatory setting. These include more restrictive policies concerning payment for ambulatory services by third-party payers, the need to rely on "soft and fragmented funding sources, and the fact that new managed care systems have "little economic margin to support the costs of medical education". 232

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Family practice residencies provide insight into financing ambulatory focused primary care GME, since over half of a family practice resident's experience is in an ambulatory setting. The most recent survey of the costs and financing of family practice residencies (conducted in 1982-83) indicated that the largest source of support was the hospital, followed by professional fees from faculty and residents and state support. Other sources of support include federal and private grants, non-program managed support and institutional base support (Colwill, undated). Colwill sums up the situation with regard to financing of residency education in family medicine as follows: "First, revenues from primary care are limited. Second, family practice centers in which family practice residents spend at least one-third of their residency in their continuity practice provide an added cost to the residency program. Consequently, the funding of family practice residency programs has been precarious and has been dependent upon governmental support in addition to hospital and patient care income support.'' (Colwill, undated). The problems that family practice has faced are similar to those that will be faced by other residency programs as they attempt to expand the amount of time devoted to ambulatory focused education. Published Examples of Successful Financing of Ambulatory Based GME Most of the published reports of successful primary care programs have focused on educational content and process. Articles on financing have dealt largely with the problems of the current system and with proposed solutions. Two recent exceptions are an article by Rosenblatt (1988) and a report from the Association of American Medical Colleges (19871. While neither focused primarily on the financial aspects of programs, both discussed fiscal considerations. In addition to these studies, some other articles describe solutions to problems which are at least partially under the control of the institutions or which propose solutions which are feasible without major restructuring of the current system. Moore (1988) speculates that in the future HMOs will become involved in medical education because of" their social responsibility, their practical self-interest, and their desired satisfaction." He believes that as the HMO movement grows and matures a number of HMOs will see that graduate medical education is in their self-interest. If self-interest is considered in its broadest sense then all three reasons are related to benefits that the ambulatory patient care setting will receive by supporting GME. In another recent article, Moore states that increased 233

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efficiency of ambulatory education and increased revenue from reimbursable services are the best ways to successfully finance ambulatory education. The same article makes the point that if it can be shown to have benefits for them, HMOs and voluntary facula can be successfully involved in ambulatory education (Moore, undated). Rieselbach and Jackson (1986) advocate linking ambulatory based GME to care for the indigent. They argue that such a linkage (through capitation) "would allow students, residents, and fellows to receive their clinical education in an environment in which the qualibr and cost of care would be controlled and supervised ..." The residents and fellows would provide care to the indigent under faculty supervision and in return the states and or the federal government would pay for the services and education under a capitation scheme. Kosekoff, et al. (1987) in an article on the efficiency and cost of general medical ambulator care in teaching hospitals conclude that major increases in efficiency are possible through improved management, including the development of more sophisticated information systems. The authors also suggest the development of stronger incentive systems to link efficiency and performance to financial rewards. In another article, based on the evaluation of the same general internal medicine clinics, Brook, et al. (1987) urge linking the ambulatory education experience to providing care to the underserved. They state that "the key to making this educational and patient care system work will be aggressive fiscal management, ...". A 1985 study of the Primary Care Unit at St. Louis University Medical Center reported that "revenues recovered was limited by low productivity and collection rate." The authors recommended that efforts be made to receive credit for ancillary profit and to improve provider productivity (Miller, et al., 19851. Delbanco and Calkins (1988) suggest a number of approaches to increasing the efficiency of ambulatory teaching. The recommendations which deal with structure of the educational experience are designed to "maximize patient visits while achieving teaching goals." Rosenblatt (1988) studied five exemplary programs finding that with fiscal creativity ambulatory programs could be successfully financed in a wide variety of ways. He found that efficiency increased as education was merged into the service function. "The more the teaching setting resembles a real world operation, the lower the teaching costs." In addition, leadership and institutional commitment were critical. Rosenblatt believes that there is enough money in the health care 234

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system to support expanded primary care education. However, current educational patterns provide cheap labor for inpatient services and subspecialties and reward those currently in control. The ambulatory programs studied by Rosenblatt included two primary care residencies - general internal medicine at Brown University and an ambulatory pediatric residency at the University of North Carolina. In both cases institutional support and commitment were key to success. Each of the programs was ..." in harmony with the broad educational and services mission of its medical school." Also important was the fact that the programs were seen as beneficial - providing as well as consuming resources. Speaking of the North Carolina program Rosenblatt notes: "Critical to the program's fiscal integrity is that the community-based care is supported entirely by the sponsoring agencies, and the salaries of the agencies' professional staff are not supplemented by the Department of Pediatrics. These agencies see the incorporation of physicians as sufficiently valuable and stimulating to compensate for the extra time and potential lost productivity involved in teaching." (Rosenblatt, 1988) The Association of American Medical Colleges studied nine academic health science centers with successful ambulatory programs. The study found the presence of a strong leader (initiator) "to create a climate that will accept and support ambulator care education..." to be a key variable. The report also identified the importance of institutional and departmental commitment to ambulatory education. While over all institutional commitment was important, lacking it, institutional neutrality, combined with departmental commitment could lead to success. As the report noted: "Where school wide efforts are not underway, or where particular departments are not used as role models for change, the role of the department chairman ... is immensely important." (Association of American Medical Colleges, 1987) While this study found that ambulatory programs could succeed financially in the current system it is important to note that seven of the nine academic health science centers required extra-institutional money (AHEC funds, foundation or federal grants, specific state appropriations) to begin their ambulatory initiatives. The report also concluded that the ability of the project to put together a package of financial support from a number of different sources was an important determinant of success: 235

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"The financing used by the programs nsited consisted in each instance of an apparently delicate idiosyncratic configuration of donated time and space; faculty patient care revenues; explicit local, state or federal grants and contracts; physician fee income; and occasionally funded research." (Association of American Medical Colleges, 1987) Finally, in a presentation to the AAMC Symposium on Adopting Clinical Education to New Form and Sites of Health Care Delivers John Kasonic recommends increased operational efficiency and improved management - including coordinated planning, improved accounting systems, and improved management information systems as necessary for the successful financing of ambulatory care education program Masonic, 1987~. Other Examples of Successful Financing Despite the array of problems identified by many observers, as the last section indicated some programs have succeeded in overcoming the barriers that make the provision of GME in ambulatory settings difficult. This section describes additional programs that have been successful in financing ambulatory focused primary care GME. The purpose is to pronde insights that may be useful to other programs and to determine what changes in current financing systems may be necessary if more programs are to be successful in financing ambulatory primary care GME. Because these programs were identified as being successful in doing what is generally conceived~of as difficult they are by definition atypical. They were identified through review of the recent literature on primacy care and discussions with knowledgeable individuals. Because of the limited time available only a few of the successful programs could be investigated. Exhibit i, lists other programs reported to be successful in financing ambulatory based primary care GME. i. The McLennan Counter Family Practice Program - Waco Texas The McL`ennan Counter Family Practice Program has been in existence for 20 years. The program was created following a series of meetings between members of the medical society and community leaders to address two problems--lack of health care for the indigent and the aging of the primary care physicians in the area. Initial funding for the program was essentially the same as is currently in place and discussed in some detail below. The program is operated by two non- profit boards (one composed exclusively of physicians and one of physicians and community leaders) with some overlap of membership and close coordination 236

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between the two boards. Two boards were created because Texas law does not allow non-physicians to hire physicians, and because a board composed only of physicians would not provide for needed representation or support from community leaders. The program, located at the free-standing Family Practice Center? is affiliated with two local hospitals and with Baylor University College of Medicine. The residency program is three years in length, has a total of 24 positions (GYI:~) and has succeeded in filling all the positions offered in the residency match. In ~ ~ ~ ~ e ~ ~ ~ ~ ~ ac~ct~t~on to the residency program, the boards operate a grant-funded faculty development center and a drop-in clinic. Faculty for the residency program includes five FTE family practitioners, one pediatrician, one OB/GYN, an internist and a psychiatrist on a part-time basis. In addition, extensive teaching time is volunteered by practicing physicians in the community. The operating budget for the residency program is over $3.3 million (including revenue from the walk-in clinic but excluding the grant-funded faculty development center). The largest source of revenue is patient care, with billings in 1988 of $3 million, and $~.6 million in collections. A staff financial counselor can enroll patients for Medicaid and other forms of state support on site. In addition to Medicaid and Medicare patients, who account for 30% to 40% of patient revenue, the clinic cares for patients with private insurance who provide 10% of revenues. A sliding fee scale is used for indigent patients. The clinic aggressively pursues collections, which have increased by 20% in each of the last several years. Program administrators expect patient revenue to be an increasingly important source of support, but improved patient volume and billings have accounted for only a small part of the recent increase in patient revenues. The major part results from improved collections and billing from third-party payers. An unusual, and apparently successful, incentive plan is used to increase patient care revenues. Clinic administrators predict patient revenues based on historical trends. Increases above this amount are shared between the program and the employees on a 50/50 basis. Each employee receives the same amount. This system is described as being good for morale and effective in improving the quality of paperwork. The second largest source of revenue is the City of Waco. The program currently receives $840,000 per year from the city to care for medically indigent residents. Payment is not fee-for-service, but is based on historical analyses of services provided to city residents. The program in effect functions like a city department, receiving 12 monthly payments per year. This arrangement has been 237 ~. . . . ~

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in place since the beginning (sometimes with county funds augmenting city resources) and has provided a stable source of support. The program also receives $358,000 a year from the Texas Coordinating Board for Higher Education. This is a capitated payment from the state for each resident in an accredited family practice program. The payment was originally $15,000 per resident but overall funding by the legislature has not kept pace with the growth of programs in the state so has fallen to approximately $14,000 per resident. The program receives a total of $373,000 from the two community hospitals with which it is affiliated. Each hospital pays the salaries of t/3 of the residents in the program with the remaining third paid by the clinic. The program provides the only residents at each hospital and the hospitals provide the sites of the resident' inpatient experience. The final major source of support is Baylor College of Medicine which provides about $220,000 per year, largely for faculty salaries. Most of the major sources of support have provided stable financing over the years. However, because of the deteriorating economic situation in Texas, only patient revenues have increased during the last two years. And this latter increase is largely attributable to improved third--part~r collections. The keys to the success of this program include active boards, very good relationships with the medical and business/political community, and multiple sources of funds. It has been important that the program is perceived as a benefit to the community and to the various providers of funds. The patients perceive they are receiving good care, the city has its indigent care problems solved, the hospitals receive physician coverage (as do local physicians who provide significant voluntary teaching services) and Baylor has the opportunity to help solve physician manpower problems in Texas (90% of program graduates practice in Texas, two-thirds practice in areas with a population of 26,000 or less). The program is always on the alert for innovative sources of funds. Currently it is working with the city to see if long-term bond funding might be a viable alternative to annual city appropriations. The program currently receives a federal grant support of $58,000 for curriculum development in community based primary care. This small grant support sum was described as being very important in making program modifications and improvements, e.g. curriculum development, redesign of geriatric curriculum, improvement of documentation of residency activities. 238

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The program director claims that no major financial problems exist. The fact that their financial supporters believe they receive benefits from the program, combined with the support of two non-profit boards and a generally positive community image have all been important factors in developing long-term, stable financial support. 2. Monetefiore Medical Center Residency Program in Social Medicine; Bronx. New York. The Residency Program in Social Medicine (RPSM) provides the organizing structure for primary care residencies in internal medicine, pediatrics and family practice. The three residency programs are organizationally distinct but benefit from the economies of scale of joint activities. The RPSM has a conjoint faculty which provides the behavioral, social and educational design components to all three programs. The program in internal medicine has 18 residency positions (GYM; pediatrics has 12 (GYI:41; and family practice has 24 (GYI:~. Since neither family practice nor internal medicine filled all of their positions this year there will be only six f~rst-year residents in family practice and four in internal medicine. Pediatrics is expanding to six first-year residents. The program director in internal medicine believes there are several reasons for this, first, failure to fill positions through the National Resident Matching Program. Reasons include a decline in interest in the social aspects of medicine, an increasing tendency for medical schools to retain their graduates for their own residencies, and a breakdown in the program's recruiting work with medical school counselors. This description focuses on internal medicine but also provides some information on the other two programs. The program director describes the internal medicine residency as "aggressively ambulatory" and "pushing it (ambulatory based education) to the limit" when compared with other programs in internal medicine. The program in social medicine (designed to train physicians to serve the urban poor through clinical practice, teaching, research or public policy leadership roles) was organized in 1970 with a grant from the Office of Economic Opportunity (OEO) and included residents in pediatrics and internal medicine. In 196S, Montef~ore Medical center opened the Martin Luther King Health Center with an OEO federal grant. Because the medical center had trouble in finding appropriately trained physicians to practice in that setting they requested and received a further grant from the OEO to start the residency programs. When OEO support was discontinued it was replaced by the Robert Wood Johnson Foundation, whose support was in turn replaced by Public Health Service (Title 239

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VIT) Grants. In 1974 the program was expanded with a federal grant to include family practice. Between 1974 and 1978 all three residency program had their ambulatory experience at the Martin Luther King Health Center, and financial support came from grants, the hospital and the health center (in return for services provided by the residents and faculty). By 1978 family practice accreditation standards had changed to require that the family practice program be a separate department. The family practice program therefore set up its own community health center ~ At the same time the grant to the Martin Luther King Health Center was transferred from the hospital to a community board, and the Health Center began experiencing severe financial problems because of reduced federal support. The Health Center ceased support of the residency program. Thus in the late 1970s and early 19SOs only hospital and grant support were available. By 1982 concern over the stability of federal grants led to renegotiation with the community board and renewed support from the Martin Luther King Center. However, Health Center financial problems, as well as the community board's attitude that they should not support education, worsened until the program in internal medicine had to move its ambulatory site to newly renovated space in the out-patient department at St. Barnabus, a small community hospital ten blocks north of the Martin Luther King Center. ,, , , c' and left Martin Luther King. .. .. . .. . The internal medicine program currently receives financial support from three main sources 1) a $150,000 federal grant 2) $250,000 from St. Barnabus for services provided by faculty and residents 3) Montefiore Medical Center. ~1 1 ~ ~1 ~ ~1 ~ This batter Is one largest source ana pays residents salaries. The program director believes that inpatient and outpatient services provided by the resident, and the reimbursement the hospital receives for medical education through Medicare direct and indirect payments, probably compensate both Montefiore and St. Barnabus fully for their budget support. A significant factor in funding is state Medicaid reimbursement for ambulatory care. Article 28 of the New York Medicaid Statute authorizes institutional provider rates for qualified institutions. The state determines costs for each institution and then the institution can bill on an average per-visit cost. The per visit cost at the ambulatory clinic at St Barnabus is $55. At the family practice Community Health Center it is $80. This reimbursement is said to be sufficient to provide quality care, break even in a teaching setting. but not to ~ ~1 ~ ~ - 0' cover the administrative costs of the educational programs or the support of non- revenue generating faculty. The program has been successful in maintaining financial viability for an extended period of time. That the program has a specific mission has contributed 240

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Table 3 Types of Clinical Education Support (Number of States - 48~) OPERATING SUBSIDIES ONLY Hawaii Missouri2 North Dakota New York2 Utah Oregon4 2 DIRECT SUPPORT ONLY Arkansas Arizona3 Delaware Idaho Indiana Nevada Oklahoma South Dakota Tennessee Vermont Washington West Virginia Wyoming Michigan BOTH Alabama California Colorado Connecticut Florida Georgia Illinois Iowa2 ~ ~ L`ou~s~ana Minnesota2 ~ ,. . . . MlSSlSSlppl Nebraska North Carolina New Jersey Kansas2 Kentucky: New Mexico2 Ohio Pennsylvania South Carolina Texas Virginia5 Wisconsin ~ Insufficient data on Maine and Maryland to classify these two states. 2 Data not available. 3 Arizona discontinued its operation subsidy to the University Hospital. 4 Clinical support for hospital in appropriation to medical school. 5 Part of support is in medical school budget. SOURCE: Mandex, Inc. (1987), Issue Paper #2. State Support for Clinical Education. 257 NO SUPPORT Alaska Massachusetts Montana New Hampshire Rhode Island

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Table 4 STATE SUPPORT FOR FAMILY PRACTICE, 1986 Clinical MedicineFamily Practice State Total $ $ % . Alabama 3,341,000 2,480,000 74 California 2,800,000 2,800,000 100 Colorado 2,142,000 2,142,000 100 Connecticut 34,000 34,000 100 Georgia 4,812,000 4,812,000 100 Idaho 50,000 50,000 100 Indiana 4,533,000 1,000,000 22 Iowa 1,383,000 1,383,000 100 Minnesota 168,000 168,000 100 Ohio 12,006,000 7,236,000 60 Oklahoma 5,805,000 2,715,000 47 Tennessee 3,940,000 3,808,000 97 Texas 10,875,000 7,875,000 72 Virginia 3,261,000 3,261,000 100 Wisconsin 5,390,000 5,390,000 100 West Virginia 1,643,000 458,000 28 Wyoming 8,386,000 8,386,000 100 Total $119,182,000 $53,998,000 45 SOURCE: Mandex Inc., (1987), Issue Paper #2. State Support for Clinical Education. 258

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family practice. Since these tables do not include state programs which indirectly facilitate but are not targeted at education, the amount of state support is probably understated. State support can be direct or indirect. Direct support can include grants for specific projects, as in Florida and North Carolina; it can include payments for residents in primary care programs, or it can include direct payments to support the medical school faculty or to subsidize a teaching hospital. States have also played an important role in supporting primary care residencies by providing direct subsidies. Family practice has been especially successful in using local project directors to obtain direct state support - particularly where the legislature is dominated by representatives of rural areas. One faculty member commented: "Rural legislators see support for our (FP) residency programs as an insurance policy against losing their local doc.~' The amount and method by which the state pays for indigent care can also be important in the development of ambulatory education. This support can be explicit, as where education is included as a component of the Medicaid payment or it can be a secondary result of a state policy. Both the Montef~ore Social Medicine Program and the SUNY- Buffalo Family Practice programs receive . ~, ~. . Em. . . _ ~ ~ extensive indirect support for education because of generous Medicaid reimbursement for institutional providers of ambulatory care. Some states such as California, New York, and Massachusetts, fund ambulatory care for the poor by providing adequate reimbursement for their care through hospital clinics. This revenue contributes to the support of residents in these setting. Some studies show that the services provided by residents can offset the costs of their education in well-run settings.~ However, this can only occur if payers provide adequate reimbursement. The federal government also plays an important role in supporting residencies. Overall Medicare payments are the major source of support for graduate medical education. In almost every case discussed in this paper the hospitals associated with the residency programs contributed funds for residents' salaries. Much of this support is possible because of the indirect and direct medical education payments made by Medicare. Direct federal grant programs have also been important, particularly in the initiation phase of programs. A 1987 evaluation of federally funded primary care residency programs (both internal medicine and pediatrics) concluded that the federal grant support had been essential for the initiation of these residency training programs and the support of the behavioral science curriculum (Health Resources and Services Administration, 1987~. Interviews with program directors 259

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for this paper produced similar responses. Because the training grants are directed toward the support of primary care education they do not have to serve a dual purpose (such as the support of services). For the same reason they are valuable in supporting parts of the residency program which do not produce revenue, for example, the conjoint faculty at Montefiore or the curriculum redesign at the McLennan County program in Texas. Because they can be used for planning and development activities the grants are also of obvious use in initiating a new program. Familv practice Programs that have been successful in establishing strong, ~ ~- stable, financial support for ambulatory-focused graduate medical education provide some lessons for other specialties. Although their success is in part due to their longer involvement in ambulatory care residencies--an involvement that is required by Accreditation Requirements--a more detailed study of their programs would be valuable. Examples from the literature and the case studies indicate that some other differences between family practice residencies and other residencies may account for the former's greater financial success in the ambulatory setting. The fact that they are frequently the only residency program in a hospital may make them a more valuable resource to the hospital. Similarly their locations in community hospitals and in less urban areas may have contributed to their greater success in convincing state legislators that they are a valuable resource, and thus to their greater success in securing direct state support. The necessity of securing financial support from a variety of sources may have aided in building coalitions and in generating non-monetary support. Finally, since the basis of family practice is ambulatory, it is likely that most department chairmen (a key ingredient in success) will be strong supporters of the programs. Summaly Overall the examples presented confirm the previous findings in the literature. However, we found that a large number of factors (See Table 1) must come together if a program is to be financially successful. Most of the successes reported previously identified only a few key factors relating to financial viability. Factors that received greater attention in the programs described in this paper than in the literature included the existence of a specific problem, the need for a single leader with a clear goal, and the role of the state. Other factors described in the literature, such as efficient management, multiple funding sources, merging of education with service functions, development of services to benefit others, were also important to the success of the programs we studied. 260

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REFERENCES Aday, L., et al. 1988. National Study of Internal Medicine; XIl. The Future of Graduate Medical Education in Internal Medicine: What Do Program Directors Predict? Archives of Internal Medicine. 148:1509-1514. July. Association of American Medical Colleges. 1987. Studv and Comnarison of Transition of Medical Education Programs From Hospital Inpatient to Ambulatory Training Programs. AAMC. Washington, D.C. Association of American Medical Colleges. 1987. Adapting Clinical Education to New Forms and Sites of Health Care Delivery. Washington, D.C. Association of Program Directors in Internal Medicine. Undated. Financing Internal Medicine Training in Ambulatory Care. Draft Position Planer APnTM Washington, D.C. _,= ~. ~ ~ en, . . Association of Program Directors in Internal Medicine. 1987a. Ambulators Settings In Internal Medicine ResidencY Programs. Executive Summary. APDIM. Washington, D.C. Association of Program Directors in Internal Medicine. 1987b. Ambulatory Settings in Internal Medicine Residency Programs. Final Report. APDIM. Washington, D.C. Brook, R.H., et al. 1987. Educating Physicians and Treating Patients in the Ambulatory Setting. Annals of Internal Medicine. 107:392-298. Ciraicy, E.W., et al. 1985. The Cost and Funding of Family Practice Graduate Medical Education in the United States. The Journal of Family Practice. Vol.20, No.3:285-295. Colwill, J.M. Undated. Characteristics of Family Practice Residency Programs. University of Missouri. Columbia, Missouri. Colwill, J.M. Undated. Financing Graduate Medical Education in Family Medicine. University of Missouri. Columbia, Missouri. 261

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Page 2 Cow, d.M., and d.K. Glenn. 1981. Patient Care Income and the Financing of Residency Education in Family Medicine. The Journal of Family Practice. Vol.13, No.4:528-536. Council on Graduate Medical Education. 198Sa. Minutes of the Plenary Session. November. Health Resources and Services Administration. RocknIle, Ma~riand. Council on Graduate Medical Education. 198Sb. First Report of the Council. Vol. and Il. Health Resources and Services Administration. Rockville, MarsrIand. Council on Graduate Medical Education. 198Sc. Meeting Minutes. February 18-19. Health Resources and Services Administration. Rockville, Maryland. Council on Graduate Medical Education. 1987a. Meeting Minutes. September. Subcommittee on Graduate Medical Education Programs and Financing. Health Resources and Services Administration. Rocknlle, Maryland. Council on Graduate Medical Education. 1987b. Meeting Minutes. June. Subcommittee on Graduate Medical Education Programs and Financing. Health Resources and Services Administration. Rocknlle, Maryland. Council on Graduate Medical Education. 1987c. Meeting Minutes. March. Subcommittee on Graduate Medical Education Programs and Financing. Health Resources and Services Administration. Rocknlle, Mar~riand. Dale, D.C., et al. 1988. The Regional Graduate Medical Education Program of the University of Washington. Journal of Medical Education. Vol. 63, 347-355. May. Delbanco, T.L., and Calkins, D.R. 1988. Journal of General Internal Medicine. Vol. 3, S34-S43. (Mar/Apr Supplement). Ebert, R.H., and Ginzberg, E. 1988. The Reform of Medical Education. Health Affairs. Vol. 7, No.2 Supplement, 6-37. Florida. 1989. Proposed State Statue. Amendment to 409:2661. Section 6. Tallahassee, Florida. 262

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Page 3 Florida 1987. State Statue. 409:2661.-Section 10. Tallahassee, Florida. Gastel, B., and Rogers, D.E. 1989. Clinical Education and the Doctor of tomorrow. The New York Academy of Medicine. New York, New York. Gavett, J.W., and Mushlin, A.I. 1986. Calculating the Costs of Training in Primary Care. Medical Care. Vol. 24, No.4:301-312. Gellhorn, A. 1986. Graduate Medical Education in Internal Medicine. Annals of Internal Medicine. Vol. 104, No.4:569-570. April. Ginzberg, E. 1987. Academic Health Centers--Can They Afford to Relax? Journal of American Medical Association. Vol. 25S, No.14:1936-1937. October. Greer, David. 1989. The Move Into The Ambulatory Setting. Prepared for the Council on Graduate Medical Education. Health Resources and Services Administration. Rockville, Maryland. Health Resources and Services Administration. 1987. Assessment of The Development and Support of Primary Care Residency Training: General Internal Medicine and Pediatrics. September. Rockv~lle, Maryland. Health Resources and Services Administration. 1988. Proceedings of the HRSA Conference: Primary Care Medical Education. HRSA. Rockville, Maryland. Kahn, L., et al. 1978. The Cost of a Primary Care Teaching Program in a Prepaid Group Practice. Medical Care. Vol. 16, No.~:61-71. January. Kasonic, John. 1987. Outline of Issues Relating to Cost and Financing of Medical Education in the Ambulatory Setting. In Adapting Clinical Education to New Forms and Sites of Health Care Delivery. Association of American Medical Colleges. Washington, D.C. Kosecoff, et al. 1987. Providing General Medical Care in University Hospitals: Efficiency and Cost. Annals of Internal Medicine 107:399-405. Lewis, C.E. 1986. Training in Internal Medicine: Time to Retool the Factory? Annals of Internal Medicine. Vol. 104, No. 4:570-572. April. 263

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Page 4 Mandex, Inc. 1987. An Assessment of State Support for Health Professions Education Programs. issue paper NO.~. ManDeX. ~pRln~lelD, Vlr~nla. Miller, et al. 1985. Time and Financial Analysis of an Academic General Internal Medicine Unit. Archives of Internal Medicine. 145:2093-2097. Moore, G.T. Undated. How Will We Pay for Ambulatory Teaching? Harvard University. Moore, G.T. 1986. HMOs and Medical Education: Fashioning a Marriage. Health Affairs. Spring. 147-163. National Health Policy Forum. Issue Brief 493. 1988. A Guide to the Patchwork Quill of Medical Education Financing. A Technical Briefing with Ruth Hanft. George Washington University. Washington, D.C. New York State. 1986. Report of the New York State Commission on Graduate Medical Education. Department of Health, New York. Albany, New York. New York State Council on Graduate Medical Education. 1988. Annual Report. Albany, New York. North Carolina AHEC Program. 1988. Medicine and Medical Education in the 2Ist Centu~r-Beyond the Hospital. Preliminary Working Paper. Chapel Hill, North Carolina. Perkoff, G.T. 1988. Graduate Medical Education Confronted. Journal of American Medical Association. Vol. 259:402-404. January. Perkoff, G.T. 1986. Teaching Clinical Medicine in the Ambulatory Setting. The New England Journal of Medicine. Vol. 314, No. t:27-31. January. Reuben, D.B., et al. 1988. The Residency-Practice Training Mismatch; A Primary Care Education Dilemma. Archives of Internal Medicine. Vol. ITS, 914-919. April. Ricketts, T.C., et al. 1986. Trends in the Growth of Family Practice Residency Training Programs. Health Affairs. Winter. 84-96. 264

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Page 5 Rieselbach, R.E., and Jackson, T.C. 1986. In Support of a Linkage Between the Funding of Graduate Medical Education and Care of the Indigent. The New England Journal of Medicine. Vol. 314, No.~:32-35. January. Rosenblatt, R.A. 1988. Current Successes in Medical Education Beyond the Bedside. Journal of General Internal Medicine. Vol.3. S44-S59. (Mar/Apr Supplement). Ross, R.S. and Johns, M.E. 1989. Changing Environment and the Academic Medical Center. Academic Medicine. January. I-6. Schroeder, S.A. 1988. Expanding the Site of Clinical Education: Moving Beyond the Hospital Walls. Journal of General Internal Medicine. Vol. 3:S5-SI4. (Mar/Apr Supplement). Stern, R.S., et al. 1977. Graduate Education in Primary Care. The New England Journal of Medicine. Vol. 297, No. 12:638-643. September. Torphy, D.E., et al. 1988. Effects of a Faculty Prepaid Group Practice In a Pediatric Primary Care Clinic. Journal of Medical Education. Vol. 63:839-847. November. Torphy, D.E. 1989. Personal Communication. Wartman, S.A. 1988. Moving Toward The Ambulatory-Based Residency. In Proceedings of the HRSA Conference on Primarv Care Medical Education. Health Resources and Services Administration. Rockville, Maryland. Watt, M.~. 1987. The Costs and Financing of Graduate Medical Education. Prepared for Subcommittee on Graduate Medical Education Programs and Financing. Council on Graduate Medical Education. September. Health Resources and Services Administration. Rockv~le, Maryland. 265

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Exhibit 1 Other Examples of Successful Financing: In addition to the programs described in this paper, a number of other states, schools and departments were reported to be successful in teas of having or supporting stable long-term funding for ambulatory based primary care graduate medical education. These include: a) States Washington; specifically for state support of family practice and for the WAM! (Washington, Alaska, Montana, Idaho) system overall. South Carolina; for the support of family practice and the development of a state-wide primary care network. Arkansas; for support of primary care education through its ALEC network. b) Medical schools reported to have a general interest in ambulatory care education include: Rush Medical College Bowman Grey School of Medicine University of California, Los Angeles, School of Medicine Michigan State University College of Human Medicine Southern Illinois University School of Medicine University of Minnesota Medical School Texas Tech University Health Science Center School of Medicine West Virginia University School of Medicine University of Utah School of Medicine c) Residency programs reported to have long-term stable financing and a significant ambulatory component. Internal Medicine University of California, Los Angeles School of Medicine Beth Israel Hospital (Boston) Brigham and Womens Hospital Program (Boston Brown University/Rhode Island Hospital 266

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F~i~ Practice Memor1~1 F~1~ Prschce Hang Beach' ^) Santa Monics F~1~ Prachce (Santa Monica' ^) Locater F~1~ Practice (Lsnc~te~ ^) Ped1~1cs H~=d Bedim School Promo 267