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Federal government proposes to slash graduate medical education funding

Robin Wulffson MD's picture
physician training, physician shortage, Affordable Healthcare, budget cuts

Substantial budget cuts in all sectors of federal spending are looming for January 1, 2013; unless congress intervenes, the financing of graduate medical education (GME) will be severely impacted. The publication, “Health Policy Brief: Graduate Medical Education,” notes that a heated debate continues over the size and scope of federal subsidies to support residency training of the nation’s physicians.

Substantial budgets cuts in all sectors of federal spending are looming for January 1, 2013; unless congress intervenes, the financing of graduate medical education (GME) will be severely impacted. On August 17, the journal Health Affairs published online a health policy brief addressing the situation.

The publication, “Health Policy Brief: Graduate Medical Education,” notes that a heated debate continues over the size and scope of federal subsidies to support residency training of the nation’s physicians. The Department of Health and Human Services (HHS), through the Centers for Medicare and Medicaid Services, is the single largest funder of GME. The brief notes that this is the training that medical school graduates receive as residents in more than 1,000 of the nation’s hospitals, known as teaching hospitals. These trainees are a key part of the labor supply at these hospitals. Currently, almost $10 billion in Medicare funds and $2 billion in Medicaid dollars are annually provided to cover the costs associated with training, plus payments to children’s hospitals, and a new program to prepare physicians for community-based ambulatory patient care.

GME funding now faces possible reductions and other changes because the Obama administration and some members of Congress want to cut back on this subsidy. Many hospitals, medical schools, and medical associations are opposed; furthermore, they want to increase funding and residency slots to train more doctors. Beyond the costs of the public subsidies to medical education, other issues at stake include whether or not the nation is training enough doctors or other healthcare professionals, and what the impact would be of increased accountability for the subsidies.

The brief explains that in the US, students training to be physicians attend four years of medical school, typically paying most of those costs directly or through loans. Upon graduation, they receive their MD degrees and finish their preparation as residents. During this period, they see and treat patients under the supervision of experienced physicians. This training usually takes place in hospitals. On average, physicians spend four years in graduate training; however, the length of training in highly specialized fields is several years longer.

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In a news release, Health Affairs noted, “As implementation of the Affordable Care Act continues and more Americans acquire health insurance, it is likely that more providers will be needed. That prospect worries those who believe that a reduction in GME funding would conflict with efforts to expand the nation’s physician supply.” At issue is whether the nation is training enough physicians, whether federal support for GME is too costly, and whether federal support should be tied to accountability measures designed to encourage successful achievements of specific outcomes.

In 2010, the National Commission on Fiscal Responsibility and Reform recommended reducing both direct and indirect GME payments. In 2011, President Obama proposed reducing indirect Medicare GME support and cutting in half GME funding for children’s hospitals. Congress has not acted on either of these proposals. The brief notes that several medical associations express concern that cuts in GME funding “would conflict with efforts to expand the nation’s physician supply, including plans to open up 18 new US medical schools.”

The brief notes that the number of specialist physicians currently outweigh the number of primary care physicians by about two to one. In many nations, the numbers are about equal. The brief explains, “The relatively weak role of primary care in US health care may explain why other countries achieve better and more cost-effective health outcomes than the United States.”

The report notes “the unsettled state of GME financing provides an opportunity for care delivery sites, professions, educators, and policy makers to evaluate the number and types of healthcare professionals that will be needed in the future; how they should be educated and trained; how physicians in particular should be educated and trained; and the most appropriate amount of and use of public funding for these purposes.”

Health Policy Briefs are produced under a partnership of Health Affairs and the Robert Wood Johnson Foundation. The full report is available at this link.

See also:
Affordable Health Care Act may impact Medicaid and Medicare patients
Healthcare costs predicted to soar in next decade
Doctors just saying no to Medicare and Medicaid patients



Resident physicians achieve academic excellence in high school and college and spend ~200,000$ to attend medical school while their colleagues are out making money. As a resident they make 12-15$ per hour and are required to work 80 hours a week, 6 days a week, and have almost no control over their work schedules for as many as seven years. They struggle to get by into their mid-thirties and beyond while their peers in law and business are often making 5-10 times as much money with a better lifestyle to boot. The residency system is one of the only remaining apprenticeship systems in the country. It is outdated and treats residents very poorly; squeezing this population any further is a sure-fire way to decrease the quantity and quality of practicing physicians in America, turn our nation's brightest into more lucrative, less altruistic careers and drive down the quality of our healthcare system.
Been there, done that. I worked many hours, including nights and weekends during my training. I earned $300/month as an intern. Altogether, I endured 10 years of training after college (including two years in the Army (I was drafted and sent to Vietnam)). Thus, I was in my 30s before i began private practice. Medical training is less brutal than when I went through it; however, it is still quite demanding and the pay is poor. During my internship and residency, I worked up to 120 hours/week. When you calculate it on an hourly basis, it is probably wwell below the minimum, wage. The brightest and the best are no longer choosing a medical career. One can earn a nice living and have a rewarding career with far less academic investment in many fields.
This is obsurd!! As a new MD graduate and resident........how far can this government go? We barely have enough to live on plus we are expected to pay back the $200,000 in loans all the while studying and working 80 hours a week? Now you want to cut the little salary that we get (after 4 years of paying you!) and make us work more??? Obama- you want to mandate insurance for all these people.....and then cut the funding for new physicians, then you want to cut our salaries once we manage to climb out of the debt? There are only so many hours in a week. There is not enough man power as of today for this new "plan" of yours! Why dont you sit a few plays out.....and let the adults do their jobs.