Hospitals Reap Millions from Primary Care Residency Programs

Primary care residency programs attract tens of millions -- sometimes hundreds of millions -- of dollars to teaching hospitals, bringing in more cash per resident than subspecialty training programs. That's according to payment tables on graduate medical education (111-page PDF; About PDFs), or GME, released July 16 by the Robert Graham Center in Washington.

The tables list the amount of federal indirect medical education and direct medical education funds that went to every teaching hospital for 2001 through 2005. They demonstrate that primary care residency programs often bring huge infusions of dollars -- in one case as much as $152 million -- to their sponsoring institutions.

"Most residency programs have no idea their institutions are receiving this much money for their residents," said Robert Phillips, M.D., M.S.P.H., director of the Graham Center. "It's a closely guarded secret in many hospitals. Direct GME is supposed to flow directly to the residency program to support their salaries and benefits and the costs associated with education. A lot of hospitals use those funds as general revenue."

Family medicine residency programs need such information to reinforce their message that primary care training provides financial benefits to their sponsoring hospitals, according to Perry Pugno, M.D., M.P.H., director of the AAFP Division of Education. Program directors frequently must justify their continued operation, he said, adding that sponsoring institutions often point to financial reasons for recommending closure of family medicine training programs.

"Many of our residency programs are being challenged as to their fiscal viability," Pugno said. "Since 2000, 64 family medicine residency programs have closed, the vast majority for fiscal reasons. Hospitals don't appreciate the multiple benefits they receive by having a family medicine residency program."

The Graham Center GME tables add to the arsenal family medicine residency program directors can bring to the argument.

"This empowers program directors," said Pugno. "They now know how much money their institution is getting on behalf of its residency programs. This information is part of the equation for justifying the fiscal benefits the institution receives for having the residency program -- in addition to all the other benefits, like clinical services to the community and secondary referrals to local specialists.

"The direct financial benefit is right there. It's a significant amount of money and it's important that sponsoring institutions are clearly aware of the direct financial benefit they receive from the federal government for having a primary care residency program."

The GME tables augment earlier Graham Center resources. Most recently, the Graham Center launched HealthLandscape.org, which enables family medicine residency programs to combine several types of demographic, economic and other data to document and illustrate family medicine residency programs' contributions to improving community health, easing health care disparities, enhancing access to care and reducing primary care shortages.