IOM REPORT: GOVERNANCE AND FINANCING OF GRADUATE MEDICAL EDUCATION

IOM REPORT: GOVERNANCE AND FINANCING OF GRADUATE MEDICAL EDUCATION Barbara Ross-Lee, D.O., FACOFP Vice President Health Sciences & Medical Affairs New York Institute of Technology

CONTEXT COGME prediction of oversupply of physicians - 1990-1994 Rapidly increasing IMG recruitment into US GME (without a ceiling) Growth of Osteopathic Medical Schools (parallel GME pathway-opti) Concensus statement limit GME slots to current level of US Graduates; restrain growth in UGME 1995

CONTEXT Cap on Medicare funded GME positions BBA 1997 Buz Cooper:Economic Model projects physician shortage Chronic and persistent geographic maldistribution Progressive specialty shortages reported Federal deficit reduction strategies by Congress

DEFICIT REDUCTION EFFORTS Simpson/Bowles (2010) Domenici-Rivlin (2010) Cut GME funding $10-20B Potentially eliminate GME BCA -sequestration (2010) Cut GME 2% Biden Negotiations (2010) Cut GME 15%

DEFICIT REDUCTION EFFORTS Super Committee (2011) Cut GME 15-60% Obama Budget (2012, 2013) Cut GME 10% Sen. Corker R-Tn (2012) CAP (2012) Cut GME by $50B/10yrs Cut GME by $28B/10yrs

DEFICIT REDUCTION EFFORTS CBO Deficit reduction (2012) Cut $20B/annual by 2020 Obama fiscal cliff (11/29/12) Republican fiscal cliff (12/3/12) Domenici/Rivkin task force Cut $400B care payments Cut $600B in health spending Cut $65B in health spending Bipartisaon Policy Center (2013) Cut IME % (5.5 to 3.5)

CHARGE TO THE COMMITTEE The IOM will develop a report with recommendations for policies to improve GME, with an emphasis on the training of physicians. Specific attention will be given to increasing the capacity of the nation s clinical workforce that can deliver efficient and high-quality health care that will meet the needs of our diverse population.

CHARGE TO THE COMMITTEE In developing its recommendations, the committee will consider: the current GME financing and governance structure the residency pipeline geographic distribution of generalist and specialist clinicians types of training sites relevant federal statutes and regulations respective roles of safety net providers, community health/teaching health centers, and academic health centers

GUIDING PRINCIPLES: TRIPLE AIM Improving the patient experience of care (including quality and satisfaction) Improving the health of populations Reducing the per capita cost of

FUNDAMENTAL CONCEPTS Alignment with needs/responsive Transparency Accountability Modernize/diminish complexity Transformation/innovation Flexibility Link GME Policy with GME funding Endorsement of Medicare funding for GME Establish a pathway to lift the cap on GME slots

PERSISTENT CONCERNS Mismatch between health needs and the specialty make up of the physician workforce Geographic maldistribution Insufficient diversity of the physician trainee pool

PERSISTENT CONCERNS Gap between physicians knowledge and skills and the competencies required for current medical practice Cultural competence Quality improvement, patient satisfaction, cost Health information technology Team-based care

Key Findings:PHYSICIAN WORKFORCE The number of GME positions offered is not connected to local, regional, or national workforce needs; neither is their distribution across specialties or geographic locations GME programs are producing an increasingly specialized workforce GME graduates preparation for practice-and their choices of practice type and location-are likely influenced by the predominance of training occurring in hospital settings More information about how to effectively influence trainee s career choices is needed.

Key Findings: FINANCE I. Payments flow directly to teaching hospitals: UNINTENDED CONSEQUENCES Payments are not tied to outcomes; no financial incentive to improve the quality or efficiency of physician training Physician training in community based settings is discouraged Specialty mix of trainees is largely determined by teaching hospitals not local, regional, or national workforce priorities. UNINTENDED CONSEQUENCES:

Key Findings: FINANCE III. IME adjustment to DRG rates UNINTENDED CONSEQUENCES Inhibits the development and financial stability of training programs in non-hospital settings.

Key Findings: FINANCE II. Payments directly linked with Medicare patient volume UNINTENDED CONSEQUENCES Children s and other hospitals with small Medicare caseloads receive minimal support Creates a disincentive to providing services outside hospitals

Key Findings: FINANCE III. IME adjustment to DRG rates UNINTENDED CONSEQUENCES Inhibits the development and financial stability of training programs in non-hospital settings.

Key Findings: FINANCE III. IME adjustment to DRG rates UNINTENDED CONSEQUENCES Inhibits the development and financialstability of training programs in non-hospital settings.

Key Findings: FINANCE III. IME adjustment to DRG rates UNINTENDED CONSEQUENCES Inhibits the development and financialstability of training programs in non-hospital settings.

Key Findings: FINANCE IV. Per-resident payments are based on decades-old historical costs UNINTENDED CONSEQUENCES (Sub)specialties in short supply are funded at the same level as specialties with excess supply (Sub)specialties that boost revenues/productivity receive same support as specialties that need financial support.

Key Findings: FINANCE V. Cap on Medicare funded slots is based on training arrangement in 1996 UNINTENDED CONSEQUENCES Contributes to substantial geographic imbalance of GME payments and training slots Favors Northeastern states despite considerable movement of the U.S. population growth toward other regions of the country

Recommendation 1: INVEST STRATEGICALLY Maintain Medicare GME support at the current aggregate amount (in an agreed-on base year, adjusted annually for inflation) while taking essential steps to modernize GME payment methods based on performance, to ensure program oversight and accountability, and to incentivize innovation in the content and financing of GME. The current Medicare GME payment system should be phased out.

Recommendation 2: BUILD A GME POLICY AND FINANCING INFRASTRUTURE 2a. Create a GME Policy Council in the Office of the Secretary of the U.S. Department of Health and Human Services. Council members should be appointed by the Secretary and provided with sufficient funding, staff, and technical resources to fulfill the responsibilities listed below.

Recommendation 2a (continued): Development and oversight of a strategic plan for Medicare GME financing Research and policy development regarding the sufficiency, geographic distribution, and specialty configuration of the physician workforce; Development of future federal policies concerning the distribution and use of Medicare GME funds; Convening, coordinating, and promoting collaboration between and among federal agencies and private accreditation and certification organizations; and Provision of progress reports to Congress and the Executive Branch on the state of GME

Recommendation 2 continued: 2b. Establish a GME Center within the Centers for Medicare & Medicaid Services with the following responsibilities in accordance with and fully responsive to the ongoing guidance of the GME Council Management of the operational aspects of GME Medicare funding; Management of the GME Transformation Fund including solicitation and oversight of demonstrations; and Data collection and detailed reporting to ensure transparency in the distribution and use of Medicare GME funds.

Recommendation 3 CREATE ONE MEDICARE GME FUND WITH TWO SUBSIDIARY FUNDS 3a. A GME Operational Fund to distribute ongoing support for residency training positions that are currently approved and funded. 3b. A GME Transformation Fund to finance initiatives to develop and evaluate innovative GME programs, to determine and validate appropriate GME performance measures, to pilot alternative GME payment methods, and to award new Medicare-funded GME training positions in priority disciplines and geographic areas.

Recommendation 4: MODERNIZE MEDICARE GME PAYMENT METHODOLOGY 4a. Replace the separate indirect medical education and direct GME funding streams with one payment to organizations sponsoring GME programs, based on a national per-resident amount (PRA) with a geographic adjustment. 4b. Set the PRA to equal the total value of the GME Operational Fund divided by the current number of Medicare-funded training slots.

Recommendation 4 continued: MODERNIZE MEDICARE GME PAYMENT METHODOLOGY 4c. Redirect the funding stream so that GME operational funds are distributed directly to GME sponsoring organizations. 4d. Implement performance-based payments using information from Transformation Fund pilots.

Recommendation 5: MEDICAID GME Medicaid GME funding should remain at the state s discretion. However, Congress should mandate the same level of transparency and accountability in Medicaid GME as it will require under the changes in Medicare GME herein proposed.