Reforming the financing and governance of GME.

S recent reports have highlighted the mismatch between the health needs of the U.S. population and the specialty distribution of newly trained physicians, the continuing geographic maldistribution of physicians within the country, inadequate diversity among physicians, gaps in physicians’ skills for practicing in the new health care delivery context, and the lack of fiscal transparency in the graduate medical education (GME) system. As a direct follow-on to two Macy Foundation reports on these issues,1,2 the Institute of Medicine (IOM) convened a Committee on the Governance and Financing of GME. That committee, which we cochaired, issued its own report on July 29.3 The charge to the IOM committee was to review the financing and governance of GME and to make recommendations for improving it. The committee’s overarching task was to assess the extent to which the current GME system is helping to produce a physician workforce that is ready to provide high-quality, patient-centered, affordable health care. The committee recognizes that GME by itself cannot produce a high-value health care system, but the committee believes that GME can have a substantial influence on the development of the physician workforce that such a system needs. The committee agreed to a set of six goals for the future configuration of GME financing and governance. These include the production of a physician workforce that is better prepared to work in a delivery system that provides better patient care, improves population health, and does so at lower cost — what has been articulated as the “triple aim” 4; innovations in the structure, location, and design of GME to achieve that desired physician workforce; greater transparency and accountability for achieving GME goals; more efficient use of public funds; greater clarity in the planning and oversight of GME policy; and mitigation of unwanted consequences of migration to a new GME system. After reviewing the relevant literature, the committee reached several important conclusions that helped shape its recommendations: forecasts of future physician shortages are variable and have been historically unreliable; increasing the number of physicians is unlikely to resolve specialty and geographic maldistribution; increasing Medicare funding is not essential for increasing the physician workforce — the number of U.S. residency positions has increased by 17.5% in the past decade, despite a cap on the number of Medicare-funded slots; current programs are producing an increasingly specialized workforce that is insufficiently responsive to local and national needs; and many newly trained physicians lack essential officebased skills. The committee debated at great length whether it is justifiable to continue government funding for GME, through either Medicare or other sources; current government funding is an estimated $15 billion per year. It noted the lack of similar funding for undergraduate medical education and for other health care professions and nonmedical professions that are also important to society and whose workforce may also fall short of demand. Three considerations ultimately led to the recommendation that Medicare GME funding (updated for inflation) should continue for at least the next 10 years, assuming that the types of reforms ref lected in our other recommendations are undertaken. The first consideration was that the delivery system is in the midst of considerable change, as it moves toward a health care system focused on improving the patient’s health care experience, lowering costs, and improving population health. Second, continued Medicare funding can be used to leverage the changes that are needed to produce a physician workforce that is better suited to such a reformed delivery system. And third, funding from Medicare, because it is an entitlement program, can provide a level of stability and predictability that other funding sources cannot provide and that is critical for transforming the GME program, which by its nature requires multiyear commitments. The committee proposes, however, that GME funds be distributed in two streams: an operational fund whose role is to support continued funding for current GME programs, and a transformation fund intended to support innovation in the patterns and use of GME funding. Among other uses, a transforma-