What Can States Do For Graduate Medical Education?

ORGANIZATION OF STATE MEDICAL ASSOCIATION PRESIDENTS June 6, 2014 Paul H. Rockey, MD, MPH Scholar in Residence Accreditation Council for Graduate Medical Education

U.S. Spends $2.7 Trillion Per Year on Health Care

• • •

$8,400 per person per year Median household income $51K Enough money to invest in the health care workforce, including physicians

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How should we pay for GME?

GME Funding Issues

• • • • Need more GME positions to keep up with population growth, aging, chronic diseases and medical school expansion Need new training venues to meet community health needs Need GME positions in new models of health care (medical homes/chronic care models) Need to fund emerging costs (accreditation, technology, simulation, faculty, duty hours, etc.)

Projected shortages of physicians, 2008 to 2020

91 500

With ACA Without ACA

58 000 64 100 30 200 7 400

2008 2010 2012 Projections prepared by the Lewin Group for the AAMC. 2014 2016 2018 2020

Medicare funding of Graduate Medical Education

• • • • • • Medicare is funded by a payroll tax Spends $525 Billion/year on medical services Pays $9.5 Billion/year to teaching hospitals for GME as part B (hospital revenue)

Less than 2% of Medicare is spent on GME

GME payments are tied to hospital beds occupied by Medicare patients

Medicare funding of GME “capped” in 1997

Explicit Payments for GME

•

Total as much as $15 Billion

from all sources: Medicare, Medicaid, VA, DOD, CHGME, HRSA, direct state support, other...

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GME spending is only 0.56 percent of the 2.7 Trillion spent on health care

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Fundamental to future medical workforce What’s the problem?

•

“Public good”

vs.

“subsidy to professional education”

Projected U.S. Medical School Graduates and First-Year GME Approximately 7,000 IMGs also entered first-year GME in 2009.

Projects 1% annual growth in number of first-year GME positions.

Data compiled by AAMC Center for Workforce Studies, 7/2009 from 2008 AACOM and AAMC sources.

Most GME funds go to teaching hospitals

Most data on GME are national.

Why look at states?

State Governments in the U.S. Control the Delivery of Health Care

• • •

States determine

who can deliver health care through professional licensing boards and scope of practice legislation what services are paid for by Medicaid and private insurers through insurance regulations and legislated benefits how care is provided through regulations of health-care facilities

States’ Roles are Expanding

• • • States fund public medical schools and several are funding new medical schools. The Affordable Care Act (ACA) strengthens States’ roles by vesting in them authority to

expand Medicaid and/or to create state based insurance exchanges.

There is a high degree of variability among the States.

Resident physicians per 100,000 state population

10 or fewer residents 11 – 20 residents 21 – 30 residents 31 – 40 residents 41 – 50 residents 60 or more residents

What States Can Do

• • • • Develop sustainable all payer funding Assess health care workforce regularly Train in settings accountable to populations Create new state-wide structures to allocate GME among specialties, geographies and sites • Target GME expansion to high priority needs

What States Can Do

• •

Tap private insurance as a sustainable source for GME funding:

– Bill in the California Assembly would levy an insurance surcharge to fund $100 M/year for Graduate Medical Education

Appropriate funds to initiate new (or expand existing) GME programs:

– Georgia is creating new residency programs in “virgin” hospitals that will qualify for Medicare funding – North Dakota, Florida and Wisconsin have appropriated funds to expand residency training

What States Can Do

• •

Award GME funds to teaching sites in non-hospital settings:

– Kansas, Minnesota, Missouri, and West Virginia – States with large rural populations

Target Medicaid GME funding toward State workforce needs:

– Most States already fund residency training, either through appropriations and/or Medicaid – – GME funding by Medicaid totals nearly $4B per year States could shape GME with their Medicaid funds

Why Use Medicaid to finance GME?

• • • • • States control Medicaid expansion under the ACA States could link health workforce training to innovative models of care for Medicaid recipients, for example, in Teaching Health Centers (THCs) Medicaid has the advantage of Federal matching

1115 Medicaid Waiver application:

– Illinois waiver would restore Medicaid GME, targeted to shortages and THCs Caution: Contracting Medicaid to for-profit insurance companies may exclude GME funds

National “Game Changers”

• • • Institute of Medicine Report on the Governance and Financing of Graduate Medical Education – to be released June 19

Single GME Accreditation System

– ACGME and AOA have agreed to work together

Congressional Action may still happen

– Several Bills would lift Medicare cap on GME funding, (with conditions) – For details, check out the AAMC website at: www.aamc.org

What Can States Do For Graduate Medical Education?

ORGANIZATION OF STATE MEDICAL ASSOCIATION PRESIDENTS June 6, 2014 Paul H. Rockey, MD, MPH Scholar in Residence Accreditation Council for Graduate Medical Education