Throwing Money at the Past

The current physician training system, heavily subsidized by the federal government, has not produced doctors prepared to serve in a changing health care system and cannot account for billions of dollars in public funding each year, an exhaustive new report has concluded.

Compiled by a nonpartisan committee of 21 leading physicians, economists, health care administrators, nurses, physician assistants and a consumer representative, and published under the auspices of the Institute of Medicine, the report describes a remarkable lack of accountability and oversight that may be affecting patient care.

“Little is known,” the committee writes, “about the management and effectiveness of the public’s more than $15 billion annual investment in Graduate Medical Education” — the period of intensive clinical training physicians must undergo after medical school and before independent practice.

Among other remedies, the committee recommended freezing funding at current levels while siphoning off a portion to medical education research. That recommendation, among others, has roused fierce debate and high-minded harangues from medical and hospital organizations.

Although G.M.E. funding represents less than 2 percent of theMedicare budget, almost $10 billion was handed over to teaching hospitals in 2012, primarily in the Northeast. Some of them stand to lose significant amounts if the recommendations are adopted.

The American Medical Association, the American Hospital Association and the Association of American Medical Colleges have issued sharply critical statements, asserting that the recommendations will exacerbate what they predict will be a physician shortage. Other organizations, like the American Academy of Pediatrics and the American Association of Family Physicians, contend that the report’s recommendations may finally help bring medical education funding more in line with national health care needs.

The steady stream of official statements from these groups, with their varied and even contradictory takes, has created a Rashomon effect, obscuring the real issue at hand for all patients: a nearly complete absence of accountability and oversight in medical training programs that receive vast public funding.

Public financing of physician training began in 1965 with the creation of Medicare and Medicaid. Over the years, Medicare assumed responsibility for the bulk of funding, and lawmakers set the formulae determining who and how much should be paid.

Current G.M.E. funding is based on statutes enacted 20 or 30 years ago, when hospitals were the primary sites of physician training and patient care was centered on doctors. In the last decade, however, health care has shifted increasingly to ambulatory centers, outpatient clinics and team-based care that relies at least as heavily on nurses and physician assistants as it does on doctors.

The Institute of Medicine panel spent two years analyzing the extent to which the current financing system helps prepare physicians to provide “high-quality, patient-centered and affordable care.” Ideally, the subsidies would be linked to how well trainees cared for patients and the extent to which they addressed not just a particular hospital’s needs, but regional and national health care priorities.

Training programs that produced doctors who had better outcomes, eventually practiced in underserved areas or worked in specialties facing severe shortages would, for example, be eligible for more funding. But committee members were stymied in their efforts to answer even the most basic questions regarding the amount Medicare has contributed to individual G.M.E. programs and the effect of those contributions.

Teaching hospitals, the primary beneficiaries of Medicare G.M.E. funding over the years, have never had to account for anything more than the simple details necessary to calculate future funding. They routinely kept track of the total number of trainees in their programs, the trainees’ salaries and benefits, and the percentage of Medicare patients cared for at their hospitals.

But the hospitals were under no obligation to Medicare to account for the quality of care provided by trainees, the places where their trainees eventually opened practices and the percentage of Medicare and Medicaid patients their graduates accepted into those practices.

Some of these training programs even lost track of how much Medicare money they received.

The committee tried to illuminate what it called “the black box of G.M.E. costs and benefits” by focusing on four representative academic medical centers and working closely with their G.M.E. officials. But they came up nearly empty-handed.

The committee’s report acknowledges that even without hard data, the financial stability that public funding provides has allowed training programs to improve physician training and therefore the medical work force over the last fifty years. Real progress has been made in increasing the diversity and numbers of practicing physicians, improving trainee working conditions and curtailing their duty hours.

With financial stability in mind, the committee’s recommendations emphasize a slow transition to a “performance-based system” of payment and no changes in the overall amount of Medicare spending for the next decade.

But current beneficiaries would probably receive less support, as the Medicare fund would be divided. An “operational” portion would be distributed to training programs according to a single, national per-resident trainee sum, thus eliminating the current funding formula that favors hospitals in regions that had the highest number of trainees nearly two decades ago and relies on an institution’s unaudited report of nonstandardized cost data.

The other portion, one the committee calls “the transformational fund,” would be reserved for financing research on new approaches to training. The hope is that this research will provide the data necessary to create a reliable performance-based payment system.

Whether or not the committee’s recommendations go into effect is now in the hands of lawmakers. But whatever the outcome, the truth regarding how wisely public money has been used to train our doctors may never be known.



Josh Sandberg

Josh Sandberg is the President of Ortho Sales Partners and Partner for The De Angelis Group. He also serves as Co-Founder and Editor of OrthoSpineNews.

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