ACS Bulletin - June 2016

A study by the Association of American Medical Colleges projects a deficit of 46,100 to 90,400 physicians by 2025 due to an aging population requiring more care, physician retirements, and the Affordable Care Act potentially introducing 32 million more patients into the health care system. 4 To counteract this projected deficit of physicians, the number of domestic medical school graduates has increased recently. However, this uptick in medical school graduates has added to the complexity of the GME conundrum.

The BBA of 1997 was enacted in an era when health policy experts were projecting an oversupply of physicians. Passing legislation to change the BBA’s cap on residency positions has proven difficult. Because of the increased number of domestic medical school graduates and the capped number of residency positions available, it has become more difficult for medical students to be accepted into the residency programs of their choice. When Governors were asked whether the current level of GME funding should change, 80 percent responded that GME funding should be increased, 19 percent responded that GME funding should remain at the same level, and 1 percent responded that GME funding should be decreased (see Figure 4, page 30). Responses to this question did not vary by age of the Governor. And—although one might anticipate that Governors who work in academic facilities or larger hospitals might be more likely to support an increase in GME funding—the answers did not vary based on practice setting (academic versus employed physician versus private practice) or type or size of the hospital where the Governor works.

Alternative sources of GME funding

For the GME system to be able to produce more physicians to meet U.S. workforce needs, some policymakers and members of the surgical education community have suggested that alternative sources of funding should be developed. New financing mechanisms are necessary for several reasons. First, existing legislation limits the amount of funding that Medicare can contribute to GME. Second, Medicaid contributions to GME are not required under federal law; as a result, some states that are experiencing budgetary issues are choosing to stop making Medicaid payments to GME programs.

The ACS Governors were asked to select options for alternative sources for additional GME funding (see Table 1, page 30). Their responses did not vary by age or practice setting, although Governors in smaller hospitals were more likely to favor the option of “regional sponsorship for a resident’s commitment to practice in the region for a period of time” in comparison with Governors in larger hospitals or academic institutions.

Some states are beginning to develop alternative sources of supplemental GME funding. Although existing teaching hospitals have not received additional funds to support new residency positions since the BBA was enacted, residency programs at new teaching hospitals may receive additional DGME and IME funding if certain Medicare requirements are met.

Georgia, for example, has actively sought to increase the number of new residency positions available in the state by helping new teaching hospitals to develop training programs and by contributing to the start-up costs of these programs. These expenditures can be significant. Start-up costs are estimated to be $3.88 million