Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 35
CHAPTER 2 COSTS AND REVENUES FOR PRIMARY CARE RESIDENCIES IN AMBULATORY SETTINGS This chapter describes the costs and revenues of graduate medical education for primary care physicians in ambulatory settings. Unless otherwise indicated, it is based on two papers commissioned by the committee: The Cost of Graduate Medical Education in Outpatient Settings by Judith R. Lave, and Financing of Medical And Graduate Medical Education: Issues in Primary Care Education Support by Ruth S. Hanft. These papers can be found in Appendix B. Introduction Analysis of medical education financing is made complicated by the fact that medical education and the provision of clinical services often take place simultaneously. The teaching physician provides care while instructing residents; residents provide services, receive instruction, and help train others. The institution in which this training takes place receives revenues for patient care, some revenues for educational functions, and incurs costs by providing patient care and education. Attempts to separate and apportion the revenues and costs to different functions have met with little success, and many questions are unanswered. Analysis of the costs and revenues of ambulatory based residencies is further complicated by three circumstances: lack of data on revenues that would allow disaggregation by specialty and site; lack of precise definition of the costs involved in the transition of residents to ambulatory care sites; and the great variety of ambulatory sites for which there is a wide range of costs and revenues. Also, common cost definitions and allocation methodologies have not been developed to measure and define costs among different practice sites. Costs Most studies of the cost of GME have focused on the inpatient setting. The cost of inpatient training has been defined as the difference in total costs between a hospital that provides training and a hospital that is identical except that it does not provide training. This difference has been difficult to calculate because of the problems of trying to separate the costs of training, research, and service. Although major teaching hospitals are more expensive than non-teaching hospitals, not all of the differential is attributable to teaching. Other factors that may cause 35

OCR for page 35
costs to be higher in teaching hospitals include case mix and location. Because of the difficulties in disaggregating costs of teaching and service, analyses of the costs of training in hospitals have often focused on the two major costs components--direct and indirect teaching costs. Direct costs are composed of resident stipends, teaching physician salaries, fringe benefits, and allocated hospital overhead. Indirect costs are the increase in patient costs incurred because the hospital is engaged in teaching. These indirect costs are incurred because of increased space and record keeping needs, the test ordering behavior of residents, and similar factors. However, these costs do not properly reflect the physician component; residents are counted only as generating costs rather than as partial substitutes for more expensive physicians. There are four major questions that can be asked when considering the costs of residency training in ambulatory settings. First, what is the difference in the net cost of providing care between a site that has no residents and a site that trains residents? Second, what is the net cost of training residents to the site or institution--does it incur net costs, break even, or make a profit? Third, what is the cost of training in ambulatory settings compared with the cost of training in inpatient settings? Fourth, what are the costs of shifting residents from inpatient to outpatient settings? The first two questions have been the focus of most studies of the costs of outpatient GME. The question of whether the cost of providing care is higher when residents are being trained has been quite extensively explored, and the answer depends on such variables as the amount of faculty time used, the relative pay of faculty and residents, the productivity of physicians, and the costs associated with employing residents. In investigating differences in practice costs with and without residents, analysts have looked at some of the costs associated with providing education, such as use of space, nursing services, and test ordering. For inpatient GME, increases in such expenses are described as indirect costs of education. One study, which compared test ordering habits of residents and faculty in an ambulatory setting, found that residents had a considerably higher propensity to order tests than did faculty. Several studies, using different methodological approaches, have tried to estimate whether the ambulatory training site incurs net costs by having residents or medical students. Such studies have used a variety of measures including cost per visit with and without residents and comparisons of costs before and after the introduction of residents. Not surprisingly, given the variation in settings in which ambulatory training occurs, the results of these studies do not concur. Variations are also caused by differences in such factors as faculty salaries, 36

OCR for page 35
supervision or teaching time, the relative income of residents and fully trained physicians, and the management of the practice. Although some studies indicate that there are net costs are incurred by having f~rst-year residents, this does not in general apply to second- and third-year residents. Another set of studies examined the impact of training on the financial status of the sponsoring institution. These studies focus on the flow of costs and revenues. Costs in general include the costs of providing services in the clinic, the full cost of the training program (which includes a portion of faculty salaries and all of the residents' salaries), and administration of the training program. Revenues in general include patient care revenues and grants. Once again, the results of existing studies show significant variation, some of which is caused by differences in the selection of the costs and revenues that were included in the studies. For example, one study of residents in four primary care sites found that revenues from residents patient services covered 77 percent of costs (which included all of the residents' salaries, although they spent less than 50 percent of their time at the primary care sites). Two surveys of family practice residency programs found that patient revenues accounted for about 31 percent of program costs. An evaluation of some general internal medicine practice sites in low income areas found that revenues exceeded costs for the sponsoring hospitals. However, in that study revenues included an estimate of income from increased admissions and testing generated by the sites. This evaluation also found that the practices were badly managed--a factor shown to be of some importance in contributing to financial viability (Walkington, 1989). In general, patient care revenues will cover costs if the practice is allocated only the portion of faculty and residents costs that reflect the time spent in the clinics. Revenues are not sufficient to cover the full salaries of residents, faculty and administrative staff who are responsible for the program. Information on the costs of training in outpatient settings compared with inpatient settings is not available. However, several factors are cited as causing the cost of training residents in ambulatory care settings to exceed the cost of training in inpatient settings. These include the "inefficiency" of the ambulatory site compared with the inpatient setting where scheduled attending rounds bring residents and faculty together. In ambulatory care the teacher cannot bring large groups of residents to a patient, and the patient cannot be asked to wait for the convenience of the teaching experience. A second factor thought to result in higher costs of training in outpatient settings is the need for additional space. Ambulatory clinics are often economically built with small examining rooms and without conference or classroom space. Introducing residents requires teaching areas, and larger examining rooms to accommodate a fully trained physician and resident as well as the patient. In a hospital residents are more easily accommodated without additional or dedicated space. 37

OCR for page 35
One of the concerns of policymakers interested in the effects of a shift from inpatient to outpatient training is the need to substitute other manpower for the residents whose inpatient service time is reduced. To the extent that residents must be replaced by more costly personnel, the move represents an additional cost --a cost that is born by the hospital. It is important to bear in mind, however, that personnel such as nurses, nurse practitioners, and physician assistants, who are less expensive than fully trained physicians, can be used to replace residents to some extent thus reducing the incremental cost to the hospital. Also, hospitals can bill more services to third-party payers than is possible when residents · · - provlc e services. To summarize what is known about the costs of ambulator care training: important variables are patient flow, the amount of faculty input and faculty salaries, the efficiency of the clinic management, and the portion of residents salaries allocated to the ambulatory site. The influence of these variables makes it hard to draw firm conclusion across sites, but there are findings that indicate that net costs are incurred by training first-year residents in primary care clinics; for second- and third-year residents this is generally not the case. There are also indications that clinics incur indirect costs associated with the presence of residents in clinics. Finally, if clinics are allocated the full cost of residents salaries, and if the salaries of teaching and administrative staff who are responsible for the program are included, the income generated is not sufficient to cover the costs of the training program. Revenues The modern era of medical education financing began after World War Il. Over the subsequent decades several events combined to change the way in which medical education was supported. A boost to medical education was given by the decision to designate medical schools and affiliated teaching hospitals as the recipients of the National Institutes of Health research grants program. Although this program was not intended to support medical education, medical schools and clinical residency programs structured their divisions and training programs to align them with the subspecialty pattern of the grants program (Ebert and Ginzberg, 19881. Grants from the National Institutes of Health support some faculty salaries, as well as helping to defray general expenses through indirect cost payments. Research in primary medical care receives targeted support through a set-aside from the National Research Services Awards that amounts to approximately $~.3 million (U.S. General Accounting Office, 1987~. In the 1960s, direct federal support for undergraduate medical education began, and a series of health manpower bills supported the construction and expansion of medical schools. 38

OCR for page 35
In the 1950s, patient care revenues began to increase as the expansion of private health insurance enabled hospitals to pass on education costs through charges, and in the 1960s the enactment of Medicaid and Medicare brought to the hospitals a large volume of paying patients, many of whom had formerly received free care. Teaching hospitals in particular benefited from Medicare and Medicaid because these hospitals had provided a large amount of charity care, and their physicians, who had previously provided free care, also began to be paid for their services. For the first time residents received a reasonable stipend and supervising physicians were paid for that activity. As Table 2.! indicates, the relative importance of sources of funding for medical schools has changed substantially since the 1970s. Most significant have been the growth of patient revenues (largely derived from the teaching/patient care activities of GME that flow into medical practice plans), and the decline in importance of federal non-research revenues. The amount of money generated by practice plans varies widely among programs, and depends on such factors as the sources of payment for patient care and the structure of the practice plan. What these data do not show is that third-party payments generally finance a greater proportion of the costs and charges for inpatient than outpatient care; reimbursement for outpatient services more often includes deductibles and coinsurance than does inpatient insurance. Also, third-party payers often do not cover preventive services. Table 2.2 points up the variation among hospitals in sources of revenues, and the important effect of ownership of medical schools. The nearly 60 percent of medical schools that are publicly owned receive on average almost 30 percent of their revenues from state or local governments. Private schools are more dependent on hospital reimbursement, although this may to some extent be an artifact of the flow of money from states. State and federal governments have made efforts to influence the supply and specialty distribution of physicians. The GME revenues made available through these sources will be examined before we move to patient care resources. Federal Manpower Policy and GME for Primary Care By the mid-1970s, the rationale for federal capitation support of medical education--the need for more physicians--had virtually disappeared. In its place arose a concern about the geographic and specialty mix of the physician labor force, and a corresponding move to create a new primary care specialty--family 39

OCR for page 35
Table 2.1 Trends in U.S. Medical School Revenues Selected Years 1971 - 1987 1970-1971 1975-1976 1986-1987 Revenue Source Percent Percent Percent Federal research 25.6 24.3 19.9 Other federal 18.8 11.7 3.8 State & local 18.9 23.8 18.5 government Tuition and fees 3.7 4.6 5.3 Medical service 12.2 18.0 37.6 Other income 20.9 17.6 14.8 Total* 100.0 100.0 100.0 * Totals may not add due to rounding. Source: dolly, Paul, et al. 1988. US Medical School Finances. Journal of the American Medical Association. 260~8~:1077-1085. Table 4. 40

OCR for page 35
Table 2.2 Revenues of Public and Private School by Source of Funds, 1986 - 198 Purest. r)i.~t.rihlll.ion Sollrr,~ of Filing Plihlin Private State and local government 29.7 Professional fee income 19.4 Recover of indirect costs 5.0 Tuition and fees 3.2 Endowment 0.2 Gifts 0.2 Income from college services 1.7 General university funds 2.4 Reimbursement from hospitals 7.S Research and teaching training 1.5 Sponsored programs* 25.9 Miscellaneous 2.9 2.2 22.5 S.3 7.6 2.3 1.2 0.s 1.0 21.2 29.0 2.7 Total** 100.0 100.0 * Mainly biomedical research. ** Totals may not add due to rounding. _ Source: Jolly, Paul, et al. 1988. US Medical School Finances. Journal of the American Medical Association. 260~:1077-1085. Table.9. 41

OCR for page 35
medicine--occurred. Several pieces of legislation were designed to encourage redistribution of physician manpower, and this effort produced new sources of primary care GME support--grant programs to facilitate the development of family practice programs and to support pediatrics and general internal medicine residencies. Title VI] of the Public Health Service Act began, in the 1970s, to address specific physician manpower problems in specialty and geographic distribution. Grants for family practice residency programs became available in fiscal year 1972 under the Comprehensive Health Manpower Training Act of 1971, (P.~. 92- 157) when $5 million was appropriated. Appropriations for this program peaked at $40.5 million in 1978-1979. In 1988 about $20 million was available. The purpose of the program was stated in 1988 as: "aimed at reversing the significant downward trend in the number of general practitioners that has occurred in the past. It supports the development of family medicine faculty and family medicine training programs so that additional family practitioners will be available to enter the health care delivery system" (U.S. Department of Health and Human Services, 19881. A federal program to support primarr care training in general internal medicine and general pediatrics was authorized by Section 784 of the Health Professions Education Assistance Act of 1976. This was one of several initiatives to improve access to, and the quality of, primary care services. A major purpose of the program was to counter the trend toward subspecialty training that had been evidenced by these disciplines (Boston University Medical Center, 1987). Funding for this program has been modest, with appropriations of $13-18 million in recent years. The importance of the direct federal grant programs is underlined in case studies (Walkington, 1989) and in evaluations of the programs, which concluded that the grants have been essential to the initiation of programs, the establishment of primary care curricula, and the continuing stability of the programs (Boston University Medical Center, 1987; Policy Analysis Inc., 19861. However, not only do these grant programs have limited funding, but also they face other problems. One is the unpredictability of long-term funding and the grant-writing burden that is integral to any grant program. Another is a requirement that 25 percent of residents' time be spent in a "continuity setting"--a clinic in which the resident has ongoing responsibility for a panel of patients. Programs sometimes experience difficulty in fulfilling this requirement as well as providing all the other experiences needed during a primal care residency. 42

OCR for page 35
State Support for GME State support plays a major, but uneven, role in financing GME and primary care ambulatory residencies. Such support varies both among states and among primary care specialties. ~ .. In 1987, 76 of the nation's 127 medical schools were state owned or state related; 74 received state appropriations. In addition, states sometimes subsidize private medical schools, support state-owned hospitals (state university hospitals provide approximately 15 percent of all residencies), and provide funds to support residencies--most often in family medicine. Finally, the portion of state Medicaid expenditures and indigent care funding that flows to teaching hospitals and non- hospital teaching sites, also contributes revenues that support GME. This will be discussed further in the next section. There is a history of state intervention to influence the specialty or geographic distribution of physicians. State programs have been designed to encourage schools to choose applicants likely to practice in rural areas or in primary care. Programs have supported primary care residencies, preceptorships and research. Some states have programs, such as that of the Area Health Education Centers, that try to encourage physicians to enter rural practice by developing and supporting education in rural sites. State direct support of residencies goes typically to family practice; in 10 of the 30 states that supported residency programs in 1986, 100 percent of residencies funded were in family practice. Overall, nearly half of state funding for clinical medical education (including undergraduate and graduate) went to family practice. In addition some states targeted family medicine departments in state schools for special support (Mandex, 19871. The success of some states in garnering this support may be due to family practice being seen by legislators as solving problems of rural access to physicians (~'alkington, 19891. Some states perceiving an oversupply of physicians have reduced the number of residencies they support. However, states can take a sophisticated approach to their physician needs and ways of meeting them. The New York State Council on Graduate Medical Education conducted an analysis of the functions of primary care physicians, the competencies and training needed and the supply and need for such physicians. The council recommended of ways of increasing the supply of primary care physicians that included requiring that a portion of all residencies should be in primary care, that capitation payments currently made to family practice residency programs should be expanded to general internal medicine and pediatrics, and that Medicaid payments for primary care services be increased to a point where it is financially feasible for physicians to provide for the primary care needs of Medicaid eligible patients (New York State Council on Graduate Medical Education, 19881. 43

OCR for page 35
State-funded operating subsidies are occasionally available to specifically support ambulatory GME. One study identified three states (Alabama, Florida, and Michigan) that in 1986 supported a range of ambulatory programs (Mandex, 1987). Examples from two states illustrate the role of state funding of GME. California in 1985-86, financed 40 percent of resident stipends and fringe benefits in five university teaching hospitals. There was also a state grant for family medicine residencies. Indiana subsidizes residency programs in community hospitals, and provides grants for family practice residencies. The Veterans Administration The Veterans Administration makes a significant contribution to GME. It supports about 12 percent of the nation's residencies; about 30,000 residents per year rotate through Veterans Administration hospitals; and more than 2,200 medical school faculty members are supported. However, little emphasis is placed on ambulatory care training, family medicine and pediatrics (Peinado and Eisenberg, 19891. Patient Care Support Although patient care activities are integral to medical education financing and play an increasingly important role as a source of support, outpatient and primary care education operate at a disadvantage. Third-party reimbursement pays a higher proportion of costs and charges for inpatient than for outpatient care. In addition, until recently, inpatient care less often required that patients shared the cost--as is customary for outpatient coverage. Furthermore, preventive services, most often within the purview of primary care physicians, are frequently not covered by third-party payers. Also, public and private coverage tends to reward "procedural" care more generously than the "cognitive" care that is one of the strengths of the primary care provider. These differences in reimbursement are thought to account in part for the emphasis on specialty and subspecialty training in medicine, and for the perceived difficulties in financing primary care residencies in ambulatory settings. Medicare Financing of GME Before the introduction of prospective payment, Medicare reimbursed hospital GME expenses as an allowable cost. When limits to payments for routine care were set it was realized that teaching hospitals were 44

OCR for page 35
disproportionately affected because direct teaching costs were included in routine costs. Teaching hospitals were therefore allowed to apply for an adjustment. By 1979 it was decided to exclude direct teaching costs from the calculation of routine costs and allow them as a "pass through". This concept was incorporated in the 1982 Tax Equity and Fiscal Responsibility Act and in the prospective payment legislation of 1983. Hospitals today receive about $1 billion in Medicare revenues for the direct costs of medical education. The Consolidated Omnibus Budget Reconciliation Act of 1985 put the direct GME payment on a per-resident basis. At the same time changes were made that contain disincentives (reduced payments) for the hospital to provide residencies for residents beyond initial board eligibility. Thus the primary care residencies will receive full payment, while some subspecialty training, and training beyond five years, will receive reduced payment. Also assisting primary care and a move to training in outpatient settings, the Omnibus Budget Reconciliation Act of 1986 extended the Medicare direct education payment from hospital outpatient departments to non-hospital settings if the resident is involved in patient care activities and there is a written agreement that the hospital bears substantially all the training costs in the outside setting (Federal Register, 1988). These have not yet been implemented and the impacts are therefore not known. the size of their t.~hino. nrr~c~rama In addition to the direct costs of education that are paid by Medicare' operating costs are associated with education, even after controlling for bed size, location and wage differences. Medicare pays for these higher costs through an indirect cost adjustment. This adjustment is based on a curvilinear formula that builds on the number of interns and residents per bed. Medicare's indirect teaching adjustment can represent important support for hospitals--depending on ----a, row For example the roughly 200 hospitals classified as major teaching hospitals receive an indirect teaching payment that averages $1,640 per case (Congressional Budget Office, 1989). An analysis by the Association of American Medical Colleges based on-data from 65 members of the Council of Teaching Hospitals, indicates that the indirect medical education adjustment accounts, on average, for nearly 20 percent of the total Medicare Prospective Payment System (PPS) payments to those hospitals. Moreover, a cut in the Medicare indirect medical education adjustment from the current 7.7 percent level to 4.05 percent would reduce average PPS margins from a positive 5.3 percent to a negative 5.2 percent (Buchanan, 1989). The Consolidated Omnibus Budget Reconciliation Act of 1985 sent "a clear message from Congress about the importance of ambulatory care education" (Eisenberg, 1989) when it specified that outpatient time should be included in the calculation for the indirect education adjustment. This removed a disincentive for using the hospital outpatient departments for residency training, but a disincentive for use of a clinic not run by a hospital still exists. Residents in a clinic that is 45

OCR for page 35
not an outpatient department of a hospital may not be counted in the number of residents on which the indirect adjustment is based although that setting may incur substantial additional costs due to resident teaching. Medicare's payment for the indirect costs of education has been vulnerable to reduction as cost savings are sought and new regression analyses demonstrate that the level of payment has been higher than indicated by empirically derived estimates of the relationship between teaching effort and Medicare cost per case. In the latest round of negotiations, the Prospective Payment Assessment Commission recommends a reduction of the indirect payment from 7.7 percent to 6.6 percent. This is substantially higher than the 4.4 percent that regression analysis suggests as appropriate. The commission drew back from recommending the larger cut because of concerns about the impact on the financial health of teaching hospitals (Prospective Payment Assessment Commission, 19891. The final budget request of the Reagan administration recommended reducing the indirect medical education payment to 4.5 percent. In 1988 the Medicare indirect medical education adjustment is expected to have cost $2.02 billion. Some support of graduate medical education in outpatient settings is found in Medicare Part B payments for physicians' services. Residents in a non- hospital-based clinic who are licensed physicians can under some circumstances (if the supervising physician has not billed and if the hospital has not assumed the costs of education) bill Medicare for their services. However, it must be noted that Medicare Part B payments suffer similar disadvantages to other payments for primary care and outpatient services; they are less well paid than inpatient services and the cognitive and evaluative services are less well paid than procedures. Supervising faculty can, to a limited extent, bill Medicare for services in the outpatient teaching setting. Patient care income is the major source of funds for GME generally, and an important source for sustaining the ambulatory clinics in which residents train. However, patient care income is usually inadequate to cover the full costs of education, although the clinic costs associated with providing patient care are often covered by revenues. The relatively low level of pay for primary care is a major factor in the shortfall. To make physician payment more rational--that is to make the level of payment reflect the costs incurred by an efficient provider, including time and practice costs--the Physician Payment Review Commission (PPRC) has recommended that Medicare reform its physician payment schedule. The PPRC was created by law in 1986 to advise the government on reform of Medicare physician payment. The charge was later expanded to include consideration of ways to control the rates of increase in expenditures and utilization of physician services. In April 1989, the PPRC recommended that Medicare gradually abandon its "customary, prevailing' and reasonable" payment 46

OCR for page 35
method in favor of a resource-based relative value scale (RBRVS) that is a modification of work done by William Hsiao and colleagues at Harvard University. If RBRVS payment, as designed by PPRC, is implemented, fees for evaluation and management services such as office visits will increase, and fees for many surgical specialties will decrease. Medicare payments, assuming no change in utilization, for internal medicine and family practice would increase on average 17 percent and 38 percent respectively. Other specialties would see a drop in payments. For example surgical specialties would decrease by an average of 11 percent, hospital-based radiology by 21 percent. However, the financial impact on a physician would depend on the mix of services provided, the proportion of Medicare patients in the physician's case load, and any policy adopted to limit balance billing. The PPRC also recommended that the Medicare fee schedule should not contain specialty differentials--meaning that differences in payment to physicians of different specialties who perform the same services should be eliminated (Physician Payment Review Commission, 19891. Medicaid Support of GME Support for GME from Medicaid programs varies considerably among states. Medicaid programs are not required to follow Medicare reimbursement principles, and some do not recognize education costs. For instance, in 1986 out of 20 states identified by one study 3 states had no Medicaid expenditures for medical education (Mandex, 19871. Studies of the Montef~ore Social Medicine Program and the SUNY-Buffalo Family Practice Programs emphasize the important role that Medicaid can play in supporting GME for primary care. New York State Medicaid authorizes institutional provider rates for qualified institutions. Thus two clinics that the Montefiore program uses receive $55 and $80 per visit--payment that is described as sufficient to provide quality care, and break even on care in the teaching setting, although some costs of education remain uncovered. Similarly, Medicaid reimbursement of $70-80 per visit is critical in allowing the SUNY-Buffalo Family Practice Program to support residents at family practice centers and numerous other facul~-staffed ambulatory sites (WalkingLon, 19891. However, such generosity is not the rule for most Medicaid programs, therefore residency programs that use sites such as community health centers that are heavily dependent on Medicaid payments suffer a shortfall of patient care revenues that can undermine the ability to support residencies, particularly when Medicaid payments are well below average practice costs. Other Third-Partv Pavers The extent to which commercial insurance and other third-party payers support GME varies. Those that pay hospital charges are implicitly paying the additional costs of teaching. However, the base of charge 47

OCR for page 35
paying patients is being eroded by the advent of negotiated payments from PPOs, HMOs etc. In the outpatient setting the fee levels for primary care are below the levels for procedure oriented specialties, and many of the activities that characterize primary care are not reimbursed. Unlike the inpatient setting, there has not been an acceptance of payment for additional costs of teaching in ambulatory sites. The payment of charges is based on the norms for the community, and teaching sites seeking to capture from charges some of their teaching costs are likely to lose their self-pay patients and those who pay deductibles or coinsurance to less costly, non-teaching providers. The Importance of Payer Mix Numerous cost studies, and case studies (Walkington, 1989), indicate that clinic fees are critical to the viability of ambulatory care training sites for primary care. In outpatient settings the resident's salary and supervisory salaries of faculty as well as other teaching costs must be earned from patient income or the relatively small amounts available from grants. While it has been shown that residents in their later years can earn enough to cover the additional costs that teaching sites incur, lacking the explicit or implicit education payments that providers of inpatient care receive, the level of patient care revenues becomes critically important. Thus the types of payers and their levels of payment and coverage of services is central to sustaining the educational activities. Many of the ambulatory care sites in which primary care residents receive their training are large providers of care to unsponsored patients and Medicaid patients. For these sites it is particularly difficult to earn the additional revenues needed to cover the costs of teaching. For sites in which the patient population is well insured by third-party payers, the problem is less acute. However, a price- competitive environment constrains the extent to which settings such as HMOs and other practice sites can cover costs from patient care fees. 48

OCR for page 35
REFERENCES Boston University Medical Center, 1987. Assessment of the Development and Support of Primary Care Residency Training. General Internal Medicine and Pediatrics. Final Report. HRSA Contract Number 240-85-0048, U.S. Department of Health and Human Services, Public Health Service, Health Resources and Services Administration, Rockv~lle, Md. Buchanan, J. Robert. 1989. Association of American Medical Colleges. Positions on the Administration's FY 1990 Budget Proposals to Reduce the Indirect Medical Education (IME) Adjustment and Direct Medical Education Payments. Presented to the Subcommittee on Health, Committee on Ways and Means, U.S. House of Representatives. Washington, D.C. April 11. Congressional Budget Office. 1989. Setting Medicare's Indirect Teaching Adjustment for Hospitals. Washington D.C.: Congressional Budget Office. Ebert, Robert H. and Eli Ginzberg. 1988. The Reform of Medical Education. Health Affairs. Supplement 7(2):5-38. Eisenberg, John M. 1989. How Can We Pay for Graduate Medical Education in Ambulatory Care? Special Article. New England Journal of Medicine. 320(23):1525-1531. Federal Register. 1988. Proposed Rules. 53(183): 36589-36608. Washington, D.C.: U.S. Government Printing Office. Mandex, 1987. An Assessment of State Support for Health Professions Education Programs. Issue Paper #2. State Support for Clinical Education. Contract No. 240-85-0054. Rockv~lle, Maryland: Office of Program Development, Bureau of Health Professions, Health Resources and Services Administration, Department of Health and Human Service. New York State Council on Graduate Medical Education. 1988. First Annual Report 1988. Albany, New York: New York State Council on Graduate Medical Education. Peinado, Sandra C. and John M. Eisenberg. 1989. Financing Graduate Medical Education in Primary Care: Options for Change. Paper prepared for the Institute of Medicine Committee to Study Strategies for Supporting Graduate Medical Education in Primary Care. Appendix B. this volume. 49

OCR for page 35
Physician Payment Review Commission. 1989. Annual Report to Congress, 1989. Washington D.C.: Physician Payment Review Commission. Policy Analysis Inc. 1986. Impact of Federal Support on Family Practice Residency Training. Prepared for the Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Professions, Division of Medicine. Contract No. 240-83-0075 Rockv~lle, Maryland. Prospective Payment Assessment Commission. 1989. Report and Recommendations to the Secretary, U.S. Department of Health and Human Services. Washington D.C.: Prospective Payment Assessment Commission. U.S. Department of Health and Human Services, 1988. Overview of Program Activity for Grants for Graduate Training in Family Medicine, Section 768(a) Public Health Service Act. An Annual Report of Grant Program Activity, Fiscal year 1988. Residency Training Section, Primary Care Medical Education Branch, Division of Medicine, Bureau of Health Professions, Health Resources and Services Administration, Rockville, Maryland. U.S. General Accounting Office. 1987. Medical Research. National Research Service Awards for Research in Primary Medical Care. Report to the Chairman. Subcommittee on Health and the Environment, Committee on Energy and Commerce, House of Representatives. GAO/HRD-87-20. Washington, D.C., July. Walkington, Robert A. 1989. Financing Primary Care Residency Training; Examples and Lessons from Successful Programs. Paper prepared for the Institute of Medicine Committee to Study Strategies for Supporting Graduate Medical Education in Primary Care. Appendix B' this volume. 50