On Implementing a National Graduate Medical Education Trust Fund (1997)

The Committee for the Implementation of a National Graduate Medical Education Trust Fund took a strong interest in soliciting comment from a variety of organizations and interested parties. Through a letter sent to members of numerous organizations requesting position papers, research, and opinion on issues surrounding GME funding and policy, and through a public hearing sponsored by the committee, many different views were examined and considered. At the public hearing on January 29, 1997, the committee heard from the following organizations, selected for their breadth of perspectives: the American Medical Association; the American Hospital Association; the Association of American Medical Colleges; the Council on Graduate Medical Education; the American Osteopathic Association; the American Association of Health Plans; the National Association of Community Health Centers; the American Nurses Association; and the American Academy of Physician Assistants.

This Appendix is meant to serve as a general overview of the major themes in positions and statements of the organizations responding to our request for input. It does not necessarily reflect the principles or conclusions of the committee. The committee did not attempt to substantiate or refute the submitted information. Specific research is cited only when it was submitted as part of an organization's materials.

Support for GME is seen widely as a public good, and as a system that should be protected in these times of changing markets and reevaluation of federal funding structures. The services offered by teaching institutions and the benefits of having a well-trained medical work force were repeatedly identified

as being unique social benefits. Continuing federal support of some kind is generally seen as an indispensable factor in maintaining both of these benefits. Many groups expressed a wide variety of concerns including the inflexibility of the current funding system, but stressed that a payment system needs to be continued in a way that gives stability to the education industry, but that also lends flexibility to the industry to meet the changing requirements of the health care market.

It is generally accepted that there is, or soon will be, a surplus of physicians in the United States. How much of a surplus there will be, in what regions or specialties, and what the role of the government should be in correcting this problem is a source of continuing debate. Many organizations voiced support for the Council on Graduate Medical Education (COGME) approach of limiting the number of Medicare-funded first-year resident slots to 110% of the size of the graduating class of U.S. medical schools and moving toward 50% of those slots devoted to primary care residencies (COGME, 1992, 1994). Some opposition was expressed to this policy, however, including questions regarding the rationale and support for using exactly 110%. Others claimed that there would be difficulty in implementing such a policy without controlling the denominator—medical school graduates.

Many of the organizations expressed concerns about currently proposed strategies that they feel may harm patients' access to their particular profession's services, in an attempt to correct work force problems that exist wholly in allopathic medicine. For example, representatives from both dental and podiatry programs submitted statistics and research that indicated that there is an undersupply of positions for their current graduates. In addition, podiatrists and nephrologists, as well as a few others, claim to serve the Medicare population more exclusively than other specialists; they believe that, at the very least, they should not be adversely affected by Medicare GME policy or prevented from responding to the growing need for their services, particularly among Medicare beneficiaries.

The inflexibility of the current GME funding structures in responding to changing market needs and direction was noted as a major concern. These needs included the desire for physicians with more ambulatory training, and for a different work force makeup, including more non-physician professionals like advanced practice nurses, physician assistants, and graduate level psychologists, to better serve all patients in a team-approach integrated environment, particularly in rural and large urban areas. Despite the need for flexibility in the funding system and the desire for change, almost all of the responders commented on the need for a system that offered stability for programs so that they could continue to train individuals in a high-quality environment throughout the term of their training.

In response to these concerns with the current system, the responders frequently offered possible strategies or options for change, or comments on options being considered in the political realm. There were three main areas addressed. First, how many slots should be funded. Second, what entities should receive the funds, and third, what should be the mechanisms for distributing those funds. Finally, other issues and concerns to be considered were discussed.

In addition to the suggested COGME policy of capping residencies at 110% of U.S. graduates, there were several other numbers and reasons offered for a cap on available slots, as well as suggestions for shaping specialty caps to better fit the needs of the health care market. Many of these suggestions included weighted funding of some kind.

The current GME funding system includes a positive weight for primary care residents, and this was generally supported. However, several of the organizations representing medical specialties stressed the importance of not weighting so much in one direction that future specialist shortages would be created. For example, the American College of Chest Physicians (1996) stated that ''reduction of support for residency and specialty training programs may actually result in their serious compromise or even in their destruction, resulting in second class quality of care in the future.''

On the other hand, the American Osteopathic Association (AOA) and other groups suggested creating a rate schedule that would vary from specialty to specialty. This "specialty-specific" payment rate would reflect work force needs and would serve to even out payment variations across institutions and regions. There could be geographic adjustments, but overall the reimbursement rate would supply a strong incentive for training programs to control costs and operate in a manner that was responsive to national work force policy (Wickless, 1997).

Because the responders' varying opinions on this issue reflect the general controversy in the field, many of the organizations support the American Medical Association (AMA) recommendation for the creation of a governing/ advisory body to examine work force issues in detail and, over time, to direct government policy on GME. In his testimony to the committee, Marvin Dunn outlined this idea for oversight of work force policy:

Many responders supported the establishment of an oversight group to develop regulations and supervise the administration of GME funds.

In any discussion of funding, two primary questions are (1) who should receive support, and (2) who should be responsible for distributing the funds to the involved parties? Several scenarios were offered identifying entities that could receive funding aside from teaching hospitals. The most common strategy mentioned was the consortium concept. Consortia would be formed from at least one teaching hospital, one medical school, and other training sites as needed and available. The consortium as a whole could receive the GME funds and determine how they would be distributed among the participants.

During testimony before the committee, the AOA highlighted their efforts to form osteopathic consortia. Under this plan, all AOA-affiliated schools and training programs would be required to be part of a consortium and meet certain quality standards in order to continue to be accredited and to receive funding for training. This model, called the "Osteopathic Postdoctoral Training Institution Model," is scheduled for implementation in 1999 and is currently in place in some areas (Wickless, 1997).

Although there were some expressions of support for this idea, there were concerns as well. The concerns centered around the historical distrust between many of these entities, as well as discussions about IME funds, which are intended as support for the teaching hospitals, and would be a complicating factor in the consortium concept.

There were many claims that the costs of and support for GME should be closely related. However, depending on the perspective of the individual group or organization, the proposed distribution method might consider different criteria for this balance. Some responders expressed a desire for a system of funding that followed the resident, with the site of training receiving the funds. Others claimed that the funding should flow to the entity supporting, and responsible for, that resident, with some compensation made to other sites for their direct costs of training. Still others submitted that medical schools best fit the educational purposes of GME and should be responsible for guiding postgraduate training and directing funding (Hanft, 1991).

Currently, many teaching hospitals have agreements with various ambulatory sites to provide training to the hospitals' residents. However, the ambulatory sites—which include community-based clinics, managed care settings, and physicians' practices—state that they receive little or no support or compensation for training these residents. For example, Thomas Curtin of the National Association for Community Health Centers pointed out that although they are able to respond to many of the needs of the health care market,

including more primary and preventive care training, and training in practicing in an integrated, cost-efficient environment, they receive little or no compensation for the residents they agree to take. The current payment policy for GME, because of various restrictions and economic incentives, discourages the use of these types of settings for resident training and makes it unlikely that the teaching hospital will pass on much of the GME funding.

Whatever the mechanism for distribution and whoever received the funds, the general opinion was that future GME funding mechanisms should at least allow, if not encourage, the training of residents in ambulatory sites and in other primary care delivery settings.

Essentially there were three basic means of distribution discussed by the respondents. These included adaptations to the current entitlement formula, a trust fund with a finite amount, and a system of vouchers. There were many combinations and variations on these three themes. Suggested changes to the current system would include those above, essentially directed toward making the current system more flexible to the changes in training needs and market requirements. This would include, according to most of the responders, the removal of GME funds from the AAPCC. There are concerns from the managed care industry about this change, particularly without consideration for its impacts. As John Ludden of the American Association of Health Plans (1997) stated at the public hearing before the committee:

Another suggested system involved the use of a trust fund. The overwhelming opinion from the responders was that such a trust fund should incorporate funds from sources other than just Medicare. Some respondents suggested tax-based contributions on health care premiums, whereas others thought a contribution from general funds would more clearly reflect the general, public benefits of high-quality GME and teaching hospitals. Many expressed a belief that this finite amount of money from an all-payer fund would be distributed via a mechanism that reflected the needs of the health care market more closely than a system that was based on outdated federal entitlement principles and incentives. For example, as Roger Bulger of the Association of Academic Health Centers (1995) pointed out, an increase in the number of residents would decrease the amount of per-resident payments in a finite system.

A final suggested method for distribution was the use of a voucher system. The voucher system would be distributed to residents and redeemed at the training program or institution of their choice. Although there were different suggestions about exactly how this system would operate, certain benefits were generally agreed upon by advocates. Vouchers could be used to more closely direct work force issues, including overall numbers, and specialty and geographic distributions. In addition, it is believed by many, that it would maintain or increase the quality of training programs as a result of competition for residents. Other respondents believed most of these issues could be resolved without the dramatic systemic changes necessary to implement a voucher system.

There was a near-unanimous response on this issue from a variety of individuals. The consensus is that current GME funding for nursing—which goes to non-graduate-level hospital-based diploma schools—should be redirected to help fund the clinical training of advanced practice nurses, which is at the graduate level. Much evidence and rationale were offered for this change in policy. Diploma schools do not train graduate-level nurses, and many felt that supplying these schools with GME funds misrepresented the program's purposes. In addition, diploma schools are decreasing in number at a rapid pace, and are only present in a limited number of areas, with many not based in teaching hospitals.

At the same time, advanced practice nurses are in increasing demand, particularly in rural areas and to provide services to underserved populations (Berlin et al., 1996). They are also being used to fulfill some of the services needs created by the reduction of resident programs. The responding organizations also pointed out that advanced practice nurses meet many current work force needs by delivering primary care services to underserved and rural populations and in integrated systems.

In addition to nurses, several other organizations representing non-physician medical personnel appealed to the committee to address their role in the health care field and to recognize their contribution to services for Medicare and other patient populations. Like nurses, these professions, including physician assistants and psychologists, pointed out their role in serving populations in need of quality primary care. The American Academy of Physician Assistants stated that the reason they are not already included in the Medicare GME system is that they did not exist as a profession at the creation of the Medicare program. However,

since then their part in the delivery of primary care services has grown. They can be found frequently in rural areas and with underserved populations. Like advanced practice nurses, they can be used to replace many of the residents' services when programs are reduced. Their number also is growing in response to a need in the health care delivery market, and their growing popularity in managed care systems.

Psychologists likewise point out that they are filling a need in the health care market as it moves to more integrated approaches to care. Team-based medical care is becoming more pervasive and an integral piece of that team is a psychologist, according to the response from the American Psychological Association.

Almost without fail, responders to the committee's requests for information expressed the need for transitional funds and time, no matter what changes were made to GME policy or distribution. The need for stability is an inherent part of maintaining a quality educational environment. The main fear of many of the organizations is that major cuts or cuts implemented too quickly could cause institutions and programs to respond in ways that are detrimental to the education of medical personnel. For example, cuts in the number of resident slots without time and funds to find replacement medical personnel could cause programs to shut down or use their remaining residents exclusively for service while neglecting training. The generally agreed upon rate for implementing major changes was approximately 5 years, during which old programs and slots could be phased out and many of the current residents could complete their training before reorganization occurred.

Views on the issue of international medical graduates, or IMGs, were perhaps the most divided. Much research was offered to show that the increase in the number of residents over the past decade is caused in large part by a growing number of IMGs in GME programs. The original intent of world health efforts and the J-1 exchange programs, was to bring foreign medical graduates to the United States from nations that did not have the capacity to train their own doctors and then return them home to practice. This has shifted dramatically. A large percentage of the current IMGs are American citizens or permanent residents and stay in this country to practice (Iglehart, 1996).

IMGs now play a major part in the operations of some institutions. In large urban areas and in rural areas, IMGs may occupy the majority of the residency positions. These hospitals are IMG-dependent. If the number of IMGs allowed in GME programs were dramatically reduced, these facilities would be adversely affected. Some respondents claim that unless incentives are introduced or

increased to draw U.S. medical graduates to replace IMGs, many of these IMG-dependent facilities and programs may not survive changes (Aronson, 1996; National Rural Health Association, 1996).

One final issue was the concern over liability of accreditation programs and the personnel of Residency Review Committees (RRCs). With the possibility of expanding the role of many programs and institutions in GME, accreditation will become a major part of the efforts to ensure that new entrants to the GME program meet quality standards. The increased potential of excluding parties from GME funding may open accrediting bodies and RRCs wider to liability suits. There were several requests for the committee to recommend that RRCs and their personnel be protected from liability and antitrust action so that they could better ensure quality programs in GME.