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| Statement
to The National Bipartisan Commission The following statement was submitted to the National Bipartisan Commission on the Future of Medicare on November 5, 1998 by STFM and the Organizations of Academic Family Medicine. A substantially similar statement was submitted to the Medicare Payment Advisory Commission that same day. Statement on Graduate Medical Education in the Evolution of Medicare
to the National Bipartisan Commission on the Future of Medicare
On behalf of: Society of Teachers of Family Medicine Association of Departments of Family Medicine Association of Family Practice Residency Directors North American Primary Care Research Group
November 5, 1998
EXECUTIVE SUMMARY· The Federal Government has a duty to ensure the production and training of physicians to provide care for the nation. It is a public good, and an infrastructure that must be explicitly supported in the same way the nation provides for the nation's defense and transportation infrastructures. · Funding in support of this infrastructure must be broad based and stable. An all-payer system is needed where Medicare continues to pay its share, but all other health care insurers also must pay. Congress must guarantee stable funding through some form of trust fund, rather than through an annual appropriations process. · Funding for graduate medical education should reflect physician workforce policy, with preferential funding for training needed generalist physicians, and concomitantly less funding for the training of limited- and sub-specialists in surplus. · We support a financing policy that limits the total number of funded first-year post-graduate residency positions to 110 percent of the number of U.S. MD and DO graduates, (based on 1993 levels) phased in from current levels over a five year period. Of these positions, we support a minimum goal of 50% residency positions in primary care, with at least half of them in family practice. We define primary care as family medicine, general internal medicine, and general pediatrics, as defined by the Public Health Service Act. · GME financing support should be provided in a per-resident capitation amount to the entity legally responsible for paying the costs of training the resident. · GME financial support to the institution sponsoring residency training must be used to pay the direct and indirect costs of training the residents for whose training the capitation payments are made. Such training may occur in any site authorized by an Accreditation Council for Graduate Medical Education (ACGME) accredited or American Osteopathic Association (AOA) approved residency program. · Full GME capitation payments should be made to support the training of individual residents for the minimum number of months necessary to meet the training requirements of only one certifying board. · Per-resident capitation payments should reflect national physician workforce policy; i.e. increased payments should be made to support the training of residents in undersupplied specialties or geographic areas. Moreover, residency programs which have a track record of producing generalist physicians, physicians located in and/or serving rural and inner city populations, or physicians from underrepresented minorities should be preferentially funded. · Sponsoring institutions will receive GME capitation payments based on the number of residents enrolled in the training program(s) through a national program (such as the National Resident Matching Program {NRMP}) determined by the public-private commission, regardless of the school of graduation of the resident, as long as the resident is eligible for post-graduate residency training in an ACGME accredited or AOA approved residency program in the U.S. · Revise the Temporary Visa Program so that it is consistent with its original intent. Phase out J-1 waivers for purely service reasons; increase the J-1 visa return-home period from 2 to 5 years for exchange visitor physicians; eliminate the use of H-1B visa program for physician residency training. · Financial support for the National Health Service Corps (NHSC) should be increased to produce more scholarship and loan repayment recipients to be placed in geographic areas where reductions in residency positions result in decreased service to vulnerable populations. Similarly, transitional financial support, to be phased out over time, should be made available to assist sponsoring institutions which experience a reduction in residency positions, and which continue to demonstrate a need to provide services to vulnerable populations. Disproportionate share payments should continue to support training institutions serving vulnerable populations. · Changes in the BBA, which purportedly support training in the ambulatory setting, have had a negative effect on family medicine training programs, the very ones that historically have conducted ambulatory training. Implementation of the BBA also does not support production of rural physicians in a way that would be in keeping with the intent of the statute. · Section 747 of Title VII of the Public Health Service Act, which provides funding for family medicine training grants to departments, residencies, and faculty development programs is successful, fills a different niche than GME funding under Medicare, and should continue.
The Organizations of Academic Family Medicine, on behalf of faculty, researchers, program directors, and chairs of departments of family medicine, appreciates the opportunity to provide input to this Commission in its current deliberations over the future of Medicare. As you move forward in your discussions, we would like to provide you with some principles to guide your decision-making. There are three main policy areas about which we wish to share our views. Most of our interest and concern relates to the question of how this nation should provide for the training of physicians. For the purposes of Medicare, this most significantly involves graduate medical education funding. We believe, however, that the Commission is looking more broadly at the entire question of funding the training of physicians as it looks to reshape Medicare. Our statement emphasizes three main areas. First, we affirm the need for an explicit national commitment to pay for the training of physicians. Second, we discuss how such a commitment should be paid for, and what criteria are needed to assure the stability of such funding. Finally, we discuss policy goals and devices needed to operationalize the spending of such funds through the system.
Training of Physicians Must Continue To Be A Federal Mandate · The Federal Government has a duty to ensure the production and training of physicians to provide care for the nation. It is a public good, and an infrastructure that must be explicitly supported in the same way the nation provides for the nation's defense and transportation infrastructures. As Congress established Medicare in the early 1960's, it recognized that in order to provide the nation's senior citizens with health care, it had a duty to ensure the production and training of physicians to provide care for those citizens. As the Commission makes decisions about recommendations for restructuring Medicare we ask that it be mindful of how vital this physician training system remains. One can question, as the Commission does, whether Medicare as a program for the elderly should bear the lion's share of this type of infrastructure building. In fact, our position is that these costs should not be borne solely by the Medicare program. However, we stipulate that these are real costs that must be explicitly accounted for and financed. The federal government has a duty to protect the nation's health care access infrastructure in the same way it provides for the nation's defense and transportation infrastructure. To leave the training of physicians to the whims of the marketplace will secure neither the production of a balanced specialty mix, nor the geographic distribution necessary to provide care across this nation. Moreover, the whole question of care to the underserved should be addressed in an explicit manner, ensuring access for all to appropriate health care.
Funding of the Training of Physicians Should Be Broad-based and Stable · Funding in support of this infrastructure must be broad based and stable. An all-payer system where Medicare continues to pay its share, but all other health care insurers also must pay, is needed. Congress must guarantee stable funding through some form of trust fund, rather than through an annual appropriations process. The Organizations of Academic Family Medicine believe that everyone should participate in the securing of the national commitment to provide for the production of physicians. Medicare should continue to pay its share of this commitment, but other health care insurers should also be expected to contribute. We find that currently, in addition to the Medicare program paying for the bulk of graduate medical education funding, contributions include clinical income generated by teaching hospitals and medical faculty practice plans, and some state governments' Medicaid payment subsidies, which vary widely by state. In addition, a large number of faculty, particularly in the ambulatory setting, contribute their time voluntarily to provide education support. Who is missing from this list of contributors? Health insurers other than Medicare and Medicaid in some states, have not explicitly contributed to the training and production of physicians. In fact, in recent years, competition in the managed care environment has reduced funds that were available from private payers for the support of GME. As far back as 1993, the Physician Payment Review Commission (PPRC), a forerunner to the current Medicare Payment Advisory Commission, an advisory body to Congress, called for an all-payer pool, stating that "All payers should contribute a percentage of their payments for medical care to a national pool. This pool would be used to support the direct costs of graduate medical education for residency positions approved as part of a process in which policymakers, the medical profession, and other interested parties participate." The Council on Graduate Medical Education (COGME) in its Third Report (1992), its Fourth Report (1994), and again in its most recent report (adopted in concept at September 1998 meeting of the Council), also calls for the development of an all-payer pool. The Organizations of Academic Family Medicine affirm that all payers of health care services, in addition to the federal government, should share in contributing to a total GME funding pool. In addition to the policy question of fairness and equity in making GME funding an all-payer commitment, there is a practical reason as well. As the federal government looks for more ways to ratchet down its growing commitment of resources to GME, it is increasingly important to find additional revenue streams to pay for this costly yet invaluable commodity. Although it is clear that the federal government must be responsible for ensuring that such an infrastructure exists, we do not believe it must be the only entity bearing the costs. As part of the federal commitment to assuring the existence of an appropriate infrastructure to train physicians, it is incumbent upon Congress to guarantee that the funding for such an infrastructure is stable. One of the great strengths, and weaknesses, of the Congressional appropriations process is that prevailing sentiments about needs for federal programs change from year to year, often in the face of issues unrelated to the need for or success of such programs. This leaves many federal programs with a lack of constancy of funding needed for long-term planning. The production of physicians is a pipeline process, and the funding supply valve cannot be turned off and on from one year to the next. It would have grave consequences to the ability of hospitals and other educational institutions to survive and deleteriously impact the production of physicians. We have seen this impact directly in the last decade with the only other federal program that pays for training of generalist physicians (Title VII of the Public Health Service Act which funds the health professions training programs). Requests for funds for such programs have varied tremendously - being both decreased and increased - from year to year, and from one administration or Congress to the next. If we agree that there is a federal commitment to assuring the training of physicians, to provide for access to needed health care services, we must guarantee that funding is both viable and predictable every year. To do this, we would envision a trust fund that would be made up of revenue from both Medicare and other health insurance payers. The contribution from both of these sources to the trust fund must be defined by formula, so that it is predictable each year. The lack of an explicit, stable system to fund physician training puts our nation's GME infrastructure in jeopardy.
Policy Goals and Financing Reform Graduate medical education in the United States has been subsidized by the Medicare Program without substantial reference to policy issues such as reducing the oversupply of physicians or ensuring appropriate distribution of physicians by geographic location and specialty. Although the Balanced Budget Act of 1997 (BBA) has recently attempted to put forward some policy direction to the financial incentives within Medicare, principally in capping the contribution Medicare will pay for GME, there has not yet been time for any analysis of what its impact might be. We have grave concern that the provisions in place to institute payment for training in the ambulatory setting are inadequate, ineffective, and counterproductive. Moreover, at this point, many provisions of the BBA have yet to be implemented. Reforming the financing of GME should address these and other policy issues. Federal funding for graduate medical education should reflect physician workforce policy, with preferential funding for training needed generalist physicians, and concomitantly less funding for the training of limited- and sub-specialists in surplus.
Workforce Policy Recommendations: · We support a financing policy that limits the total number of funded first-year post-graduate residency positions to 110 percent of the number of U.S. MD and DO graduates, (based on 1993 levels) phased in from current levels over a five year period. Of these positions, we support a minimum goal of 50% residency positions in primary care with at least half of them in family practice. We define primary care as family medicine, general internal medicine, and general pediatrics, as defined by the Public Health Service Act. Why should financing take into account workforce goals? Numerous studies and commission reports (IOM, COGME, PPRC, PEW, etc.) have stipulated that there are too many specialists produced in this country. While there recently has been some reduction in overall numbers of residency positions, the BBA did not actually cap positions at 110% of 1993 levels. Instead, it limited payment that Medicare would fund at current (1997) levels, or approximately 140% of 1993 total allopathic and osteopathic graduates. As COGME stipulates in its upcoming (draft) report, current levels of physicians expected to enter non-generalist specialties in the 1996/97 academic year, was nearly 14,000. This is well over COGME's (and our) goal of 9879 (50% of 110 % of the 1993 graduates.) The Consensus Statement on the Physician Workforce states that "It is likely that many traditionally underserved communities will continue to have an inadequate number of physicians, particularly generalist physicians [emphasis added], to meet the needs of the population." The statement goes on to request that federal funds be provided to increase medical school student experiences in rural and inner city communities, and to call for "federal incentives to encourage students to pursue careers as generalist physicians and to establish practices in these communities." Other expert bodies have also spoken to the need for increased production of generalist physicians, particularly to address service needs in rural and other underserved areas. While we have historically supported a cap on the total number of resident slots, we have also advocated that 50 percent of those slots should be primary care. Moreover, 50 percent of the primary care slots should be in family medicine. We have not yet reached that goal. Today, there is improved data to support this figure. The AAFP's current family physician workforce reform plan, adopted in September of this year details this need. The plan:
· GME financing support should be provided in a per-resident capitation amount to the entity legally responsible for paying the costs of training the resident. GME financial support to the institution sponsoring residency training must be used to pay the direct and indirect costs of training the residents for whose training the capitation payments are made. Such training may occur in any site authorized by an Accreditation Council for Graduate Medical Education (ACGME) accredited or American Osteopathic Association (AOA) approved residency program. One of the decisions this Commission needs to address is the question of whether GME funds are explicitly to support graduate training, or rather to help maintain hospitals balance sheets. Our experience has been that frequently residency programs do not see the funds Medicare expends on their behalf. In many cases the program is not even able to find out from the hospital finance office how much money the hospital is reimbursed under GME for that program's residents. Prior to the BBA, hospitals were practically the only entities eligible for GME funding. If the money is to fund the true costs of graduate training, such funding should go to the entity incurring the cost. · Full GME capitation payments should be made to support the training of individual residents for the minimum number of months necessary to meet the training requirements of only one certifying board. In keeping with a goal of increasing the supply of generalists and reducing the supply of sub-specialists, Medicare should not be paying for additional years of training past one certifying board. · Per-resident capitation payments should reflect national physician workforce policy; i.e. increased payments should be made to support the training of residents in undersupplied specialties or geographic areas. Moreover, residency programs which have a track record of producing generalist physicians, physicians located in and/or serving rural and inner city populations, or physicians from underrepresented minorities should be preferentially funded. Studies underway (Coltis, Colwill, personal communication) indicate that the ratio of rural physicians to population has been declining steadily over the past 50 years. Now, for the first time in half a century the ratio appears to be increasing. This increase is almost entirely a result of increased numbers of family physicians. Currently, half of U.S. rural counties are officially designated Health Professions shortage areas. We have approximately 34 family physicians per 100,000 people in rural areas (1995 data). If our current level of production remains stable, by the year 2010, that number would increase to 42 family physicians per 100,000 individuals in rural America. This will go a long way toward alleviating current rural physician shortages, but is dependent upon future funding of family practice training programs. · Sponsoring institutions will receive GME capitation payments based on the number of residents enrolled in the training program(s) through a national program (such as the National Resident Matching Program {NRMP}) determined by the public-private commission, regardless of the school of graduation of the resident, as long as the resident is eligible for post-graduate residency training in an ACGME accredited or AOA approved residency program in the U.S. Using a 110% cap on first year residents, there is more than enough space to allow for competition among U.S. and internationally trained physicians for residency slots. This, in conjunction with changes to U.S. visa policy, (see below) will allow programs to choose residents based on quality, rather than birth origin. · Revise the Temporary Visa Program so that it is consistent with its original intent. Phase out J-1 waivers for purely service reasons; increase the J-1 visa return-home period from 2 to 5 years for exchange visitor physicians; eliminate the use of H-1B visa program for physician residency training. · Financial support for the National Health Service Corps (NHSC) should be increased to produce more scholarship and loan repayment recipients to be placed in geographic areas where reductions in residency positions result in decreased service to vulnerable populations. Similarly, transitional financial support, to be phased out over time, should be made available to assist sponsoring institutions which experience a reduction in residency positions, and which continue to demonstrate a need to provide services to vulnerable populations. Disproportionate share payments should continue to support training institutions serving vulnerable populations. We cannot continue to allow the marketplace to define access to care for the underserved. Although we are making headway in reaching rural areas through our increased production of rural physicians, there is still a large problem of access to physicians both in rural, inner city, and other locations. As we shape the workforce of the future, we must recognize that there will always be certain areas or populations which have need for physicians' care, but for whom it is unlikely that a physician will locate for the long-term. In these situations, it is highly appropriate for the federal government (or all payers) to fund transitional support.
Changes In the BBA Do Not Support Production of Family Physicians Although ostensibly the BBA is supposed to have leveled the playing field and remove disincentives to ambulatory training, we find it to be just the opposite for family medicine graduate training. Many of you may believe that the recent changes to Medicare graduate medical education funding (as passed in the Balanced Budget Act (BBA) of 1997), such as the capping of residency slots, will help reduce the nation's total production of physicians, while protecting the production of physicians who serve in rural areas. Unfortunately, this is not the case. While we wholeheartedly support the intent of the statutory changes, the implementation of some of them will have two unintended consequences: 1) penalizing family practice programs that have historically sent residents for training in non-hospital settings, including rural site rotations, while promoting such training for other specialties, and 2) restricting growth of all family practice programs, when 40 percent of their graduates serve in rural areas. These consequences are especially troubling since Congress intended support for production of rural physicians. We have bill language that would correct these problems with minimal cost to the Medicare program. In the 105th Congress, two bills were introduced in the Senate (S.2259 and S.2216) and a companion bill in the House (H.R. 4219). We hope this commission will be able to recommend support for this legislation. These bills include technical legislative changes to alleviate some untoward effects of the Balanced Budget Act of 1997 that are beginning to have grave consequences for family medicine residency programs. As you know, the statute put in place hospital-specific caps on the numbers of full time equivalent residents Medicare would pay for under GME. It also finally allowed for the counting of residents who spend time training out of the hospital in ambulatory settings for the purposes of reimbursement by Medicare. The bill also directs the Secretary to give special consideration to facilities that meet the needs of underserved rural areas. These are all changes academic family medicine supports wholeheartedly. Unfortunately the language used in the BBA to carry out these GME changes has created disproportionate harmful effects on family practice residencies. The bills introduced by Senators Collins and Murkowski would solve these problems by: 1. Recalculating the IME and DME caps based on the number of interns and residents who were appointed by the approved medical residency training programs for FY 1996, whether they were being trained in the hospital or in the community. Currently only programs prospectively introducing ambulatory training will be allowed to have those positions supported by Medicare. The impact has been disproportionately harmful to family practice programs because the hospitals in which they were located were not allowed to count the residents they had serving in community settings in the cap. Only family practice residents are trained extensively out of the hospital and only family practice residencies were significantly harmed by this provision in the BBA. 2. Changing the cut-off date for adjusting the DME funding cap to September 30, 1999. Approximately 10 family medicine programs were "in the pipeline" for ACGME accreditation at the time of passage of the BBA. We believe that very few programs other than these would also fall into this window, since family medicine was one of very few specialties that were in a growth cycle. 3. Expanding the exception to the funding caps to include programs with separately accredited rural training tracks even if the sponsoring hospital is not located in a rural area, and for residency programs which are the only one offered in a hospital. The inability to expand programs to teach more effectively in rural areas also significantly affects only family practice residencies, since family medicine is the only specialty in which 25% of its doctors serve in rural areas, equal to the population as a whole. Programs must have a separate accreditation for rural training tracks. We do not believe other specialties train utilizing a separately accredited rural training track. There are currently 26 accredited rural training tracks in family medicine. The average rural training track has four residents, two in each of the 2nd and 3rd years of training. Based on this, the number of residents thus affected will be modest. The ACGME has indicated that only approximately 300 programs exist nationally as single programs within hospitals. Of this number 191 are family practice programs. The rest are exceptions across specialties, and most are extremely small. All other programs of any specialty would be able to grow to meet community needs based on a diminution of other specialty slots within the 1996 cap on FTE's. The cost of the exclusion from the cap of the hospitals that sponsor only one family practice residency should be minimal. Most of the family practice programs are located in small community hospitals. The programs are smaller than the national average, and we believe they cannot expand a great deal because the infrastructure needed to support larger programs is not available. For example, nationally, the average size of a family practice program is 27 residents; the average size of those family practice programs that are the sole program in its hospital is just under 21 residents.
What Role Does Title VII of the Public Health Service Act Play in Medical Education - Graduate and Undergraduate? In our deliberations over funding for these programs over the past year, we have found that there seems to be a misunderstanding as to the relative use of Medicare graduate medical education funds (GME) and Title VII dollars. Some have made the argument that since Medicare funds residency training through GME, there is no need for Title VII funding. There is a great deal of difference between the goals and effects of the two programs. Medicare GME funding is money that is directed to hospitals to help defray the costs of having residents train in those institutions. Title VII funding, for the most part, is money directed at medical schools and universities to help develop a primary care infrastructure within the medical school environment. Only about one-third of the nation's family practice residencies receive Title VII funding, and that money, unlike GME funds, goes to the program itself. There it is used to develop innovative curricula, linkages with community training opportunities, faculty development, and to maintain fiscal stability of departments of family medicine. Even if changes to GME would occur that would finally fund family medicine residencies appropriately for training in the ambulatory setting, there is a place for Title VII funding of family medicine programs, in particular for undergraduate, faculty development and department functions, and to support innovation in residency training. Within the medical school environment, family medicine departments must compete with other departments without access to the same funding streams the others have. For example, the federal government has instituted conflicting incentives that have made it fiscally difficult to develop a family medicine infrastructure. Medicare reimbursement rates for procedural services, Medicare reimbursement for graduate medical education in a hospital setting, and the more than $13.5 billion a year spent on NIH research all serve to strengthen other departments more than they strengthen family medicine and thereby causing the academic medical environment to produce significantly more subspecialists than primary care physicians.
How Do We Know This Title VII Money Is Well Spent? Two General Accounting Office (GAO), reports have addressed the issue of how we know this money is well spent. A July 1994 report, states that "the programs were important for funding innovative projects and providing 'seed money' for starting new programs. For example, Title VII was considered important in the creation and maintenance of family medicine departments and divisions in medical schools..."(GAO/HEHS-94-164). The GAO, in an October 1994 report, states that "students who attended schools with family practice departments were 57 percent more likely to pursue primary care." In addition, the report goes on to say that "students attending medical schools with more highly funded family practice departments were 18 percent more likely to pursue primary care and students attending schools requiring a third-year family practice clerkship were [also] 18 percent more likely to pursue primary care." The money spent on Section 747 of Title VII is directly targeted in these areas. (GAO/HEHS-95-9) Title VII has helped build much needed family medicine training capacity and quality. Just one example from the Medical College of Georgia illustrates the importance of these programs. A number of years ago, the family medicine department was awarded an innovative residency curricula grant to develop academic community partnerships with a network of rural health clinics in a four county area - an area that was a Health Professional Shortage area, unable to keep private physicians, and economically depressed. The success of that grant is in the development of self-sustaining rural health clinics as teaching sites, with residents and students providing care under the supervision of a teaching physician. Physicians graduating from this program have subsequently been hired to direct these sites and have stayed for the long term providing continuity of care, and living in the community that they serve.
Conclusions/Recommendations In conclusion, we appreciate the difficulty of the task before you. Reforming, restructuring, and revamping the huge Medicare program is clearly a daunting effort. We hope that as you continue your deliberations, make decisions, and write your report, you will keep in mind the following recommendations: 1. First, a warning! While change is needed and should not be feared, there are enough examples within the history of the Medicare program to prove the law of unintended consequences. The language in the BBA regarding payment for ambulatory training is a case in point. We recommend that any changes in the restructuring of Medicare GME be taken slowly (phased in) with enough time and resources devoted to a thorough examination of its impact. In addition, safety mechanisms must be in place to ensure the continued viability of training programs throughout the change process and beyond. 2. Funding of graduate medical education is a public good. It is the federal government's responsibility to ensure that such training B and the infrastructure that supports it B is explicitly funded. Such funding must be broad-based, stable, and predictable from one year to the next. Using general revenues through the appropriations process is not an adequate mechanism. Moreover, although it is the federal government's responsibility to ensure that explicit, stable funding occurs, the government should only pay its portion. All payers of health care services should be expected to pay their share. 3. Graduate medical education in the United States has been subsidized by the Medicare Program without substantial impact on policy issues such as reducing the oversupply of physicians or ensuring appropriate distribution of physicians by geographic location and specialty. Federal funding for graduate medical education should reflect physician workforce policy, with preferential funding for training needed generalist physicians, and concomitantly less funding for the training of limited and sub-specialists in surplus. 4. Changes in the BBA, which purportedly support training in the ambulatory setting, have had a negative effect on family medicine training programs, the very ones that historically have conducted ambulatory training. Implementation of the BBA also does not support production of rural physicians in a way that would be in keeping with the intent of the statute. Our legislation, the GME technical amendments of 1998, must be passed to correct these problems. 5. Section 747 of Title VII of the Public Health Service Act, which provides funding for family medicine training grants to departments, residencies, and faculty development programs is successful and fills a different niche than GME funding under Medicare, and should continue. Even with a reformed system, there will still be a role for Title VII, family medicine training funds. We appreciate the opportunity to provide input and hope that you can support these recommendations as you deliberate.
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