IOM Report Calls for Restructuring of Nation's GME System

Overhaul Long Overdue, Says AAFP

July 30, 2014 06:24 pm News Staff

On July 29, the Institute of Medicine (IOM) released its long-awaited critique of the nation's graduate medical education (GME) system. Specifically, the 21-member IOM committee, convened at the behest of the Josiah Macy Jr. Foundation in 2012, reviewed how U.S. GME is both governed and financed.

[Three young doctors posing]

The committee's analysis and recommendations are spelled out in a final report( titled Graduate Medical Education That Meets the Nation's Health Needs.

In an accompanying report brief(, the committee noted that since the creation of the Medicare and Medicaid programs in 1965, American taxpayers have funded GME to the tune of tens of billions of dollars.

In 2012 alone, the authors estimated that public financing of GME totaled about $15 billion, and two-thirds of that funding -- or nearly $10 billion -- came from Medicare coffers.

"Although the scale of government support for physician training far exceeds that for any other profession, there is a striking absence of transparency and accountability in the GME financing system for producing the types of physicians that the nation needs," wrote the authors.

Review of Recommendations

In the brief, the IOM committee called the job of transforming Medicare's role in GME financing a "complex undertaking" and urged a10-year transition from the current status quo to full implementation of its recommendations.

Story highlights
  • On July 29, the Institute of Medicine (IOM) released a report with recommendations that would change how the U.S. graduate medical education (GME) system is governed and financed.
  • Report authors noted that the current GME financing system lacks transparency and accountability and is not producing the types of physicians the country needs.
  • The IOM committee offered a specific set of recommendations to be phased in over a 10-year period; the AAFP commended the committee's work and called the overhaul long overdue.

Committee members noted that Congress would have to act to amend existing Medicare law and regulations to enable the transition to an accountable, performance-based system.

Specifically, the committee made these recommendations(

  • Maintain Medicare GME funding at its current level, while at the same time acting to modernize GME payment methods based on performance and working to ensure program oversight and accountability.
  • Build a GME policy and financing infrastructure that includes creating a GME Policy Council as part of HHS and establishing a GME Center within CMS to provide ongoing guidance for the policy council.
  • Create one Medicare GME fund with two subsidiary funds: a GME operational fund to distribute ongoing support for currently funded residency training positions, and a GME transformation fund that would, for example, finance initiatives to develop new GME programs and determine appropriate GME performance measures.
  • Modernize Medicare GME payment methodology by, among other things, replacing the existing duel sets of Medicare GME payments -- known as direct and indirect -- with a single-payment process whereby funding would be paid directly to organizations that sponsor GME programs; those payments would be based on a national per-resident amount.
  • Keep Medicaid GME funding in the control of individual states, but require the same level of transparency and accountability that would be required of Medicare GME.

"The IOM report provides an initial roadmap for reforming the Medicare GME payment system and building an infrastructure that can drive more strategic investment in the nation's physician workforce," concluded the authors in the report brief.

Overhaul Overdue

From the AAFP's perspective, an overhaul of the nation's GME system is long overdue.

"Although the AAFP has advocated for quicker change on a large scale, the report is consistent with our policies on transparency and accountability to align our investment in GME with the health care needs of our population," said AAFP President Reid Blackwelder, M.D., of Kingsport, Tenn., in an AAFP statement also released on July 29.

Blackwelder reserved his highest praise for the IOM's recommendation to "decouple" GME payments based on the volume of Medicare patients treated and shift funding away from the long-standing hospital-based system.

In other words, funding would go directly to organizations that sponsor residency training, such as community-based training sites, which then would decide how best to train those residents to address the health needs of the community.

"As family physicians, we practice on the front lines of health care and see most of our patients outside of a hospital in an ambulatory office-based setting. Ensuring that more training takes place in these environments is key to preparing our future physician workforce," said Blackwelder.

In the end, Blackwelder commended the IOM committee for completing an important task and applauded its members for recommending changes that "move us in the right direction for the nation's health."

In addition to the Macy Foundation, 11 other private foundations, including The Commonwealth Fund, the California HealthCare Foundation, the Robert Wood Johnson Foundation and the Kaiser Permanente Institute for Health Policy, provided support for the study. The Health Resources and Services Administration and the Department of Veterans Affairs also were involved.

The project gained bipartisan support from 11 U.S. senators, who encouraged the IOM to tackle the massive two-year project.