QUESTIONS TO BE ADDRESSED BY STATE OFFICIALS IN CONTINUING TO SUPPORT MEDICAL EDUCATION

As evident by their long history of extensive financial support, most States believe medical education to be a public good. That is, they believe it to be a good or service that benefits the public at large and will not be produced at the appropriate level in the private market because of difficulty in pricing it. Although the community at large, including future patients and physicians, benefits from medical education, it is impossible to charge future beneficiaries. If left to itself, the private market will underproduce GME. MCOs and other private health plans are not investing significant support for medical education. Moreover, the costs of training are too great for many medical trainees to pay entirely without incurring large debts.

However, in deciding how to continue their support for medical education, States should be prepared to address the following questions:

What does the State want from its medical school(s)?

More specifically, what are the State’s current priorities versus those of the State’s medical school(s)? Do common or differing missions exist regarding:

• training an appropriate supply of physicians to address State health workforce needs,
• attracting Federal and private research dollars,
• producing and harboring innovative biotechnology, and
• developing and sustaining a reputation for community service?

How effective are State-supported medical schools and residencies in preparing physicians to meet public needs?

• What is the school’s mission with respect to specialty and geographic distribution of graduates?
• Does the school have a department of family medicine? What proportion of the clinical faculty is primary care physicians? How many schools require a family practice clerkship for students?
• What proportion of medical school applicants graduated from high school in non-metropolitan counties and inner-city communities? How does that proportion compare with the proportion of the State’s population living in these areas?
• What proportion of graduates is doing residency training in the State? How many residencies are located in medically underserved areas of the State? What proportion of graduates is doing State-based residency training in primary or specialty care in shortage areas? What proportion of the residencies requires a rural or inner-city rotation?
• What proportion of physicians completing residency training is practicing in the State’s rural and medically underserved areas? What proportion of physicians is practicing primary care or shortage specialties in the State? Is there a process for tracking and reporting such information to training programs and the general public?

How can States improve the chances that their State-supported medical schools and residencies will prepare physicians to meet public needs?

Monitoring and Oversight

• Is it appropriate for State legislatures to become involved in defining and monitoring the missions or expected achievements of State-supported medical schools and residencies? Should State appropriations remain unrestricted or should they be linked to performance with respect to these achievements?
• Does a State have the right to oversee and perhaps direct a public medical school’s placement and expenditure of revenue for clinical practice plans?
• Should the State establish regular reporting requirements for training programs and enforceable penalties for non-compliance?

Level of Funding

• What is an appropriate and fair level of State support for graduate training? How understood, documented, and justified are statewide GME costs and revenue?
• How should a State determine the importance and level of Medicaid GME support in comparison to GME funds from State appropriations and other sources? Is there value in having Medicaid pay for GME in other ways that better match the State’s workforce needs? Will the needs of Medicaid’s managed care “gatekeeper” workforce be met without its having to be funded through GME?
• In determining Medicaid’s fair share, should a State continue to link GME payments to patient care or weigh the value of making payments based only on education costs? Should Medicaid GME funds go to training institutions that provide little or no service to Medicaid recipients?

Funding Efficiency and Accountability

• How can a State maximize its funding and public accountability for GME? Should State support for graduate training be weighted to creating new programs or to strengthening existing programs?

• Can Medicaid use more efficient means to pay for GME? Should the number of filled residency and graduate nursing positions that qualify for Medicaid GME payments or total funding levels be capped to control costs and to allow the State to pay only for those physicians it needs?

• Should the State enhance its investment in GME by establishing a dedicated medical education and research trust fund that pools general revenue funds, Medicaid, other State monies, provider or insurer taxes, and other funds? Should such a trust fund be created to offset a proportion of teaching hospital revenue at risk of being lost to health plans?

• Should a statewide health professions education council be created to determine, justify, receive, and distribute all State Medicaid and general fund GME payments to training programs to achieve workforce goals?