FINDING 8: Many States are developing new GME financing policies and some are promoting health workforce goals. A survey of State GME policies conducted for the Council revealed that over the past several years, many States have developed new policies related to financing GME. As of October 1998, nineteen States removed GME from their Medicaid managed care payments and channeled the money more directly to support physician training. About half of these States distribute some portion of the GME funds to teaching sites based on performance in achieving workforce goals. These State workforce goals are consistent with the COGME goals, particularly an increase in generalist physicians.
RECOMMENDATIONS
Overview
These recommendations are designed to create a new framework for health workforce planning in America. This new system would be built on the premise that the marketplace for the production of physicians and non-physician clinicians will work more effectively if better data and information on supply, demand and needs are compiled and made
available to the education community and current and prospective students. But the system would not rely totally on the marketplace to meet all workforce goals. This market-oriented approach would be strengthened by an integrated planning system for physicians and non-physicians and through collaboration with States. It would also include the development
of financial incentives for priority health workforce goals and the expansion of the National Health Service Corps to help safety net hospitals that reduce residents. In addition, the new system would provide a more stable source of funding for GME.
RECOMMENDATION 1
ENCOURAGE A MORE EFFECTIVE MARKET FOR PHYSICIAN SPECIALTY AND GEOGRAPHICAL LOCATION
CHOICES. The Federal government, the medical education community and the States should foster
a more effective marketplace for the training of physicians by expanding the collection and dissemination
of data on supply, need and demand for physicians by specialty and region. This information should be shared in a systematic manner with medical schools, teaching hospitals, residency programs, medical students, policy makers, States, payers, and the general public.
Evidence suggests that U.S. medical students and residency program directors respond to information
on career opportunities and workforce needs. Yet, in the absence of more accurate and more timely information on the current and projected supply and demand for physicians, it is difficult for the GME marketplace to work effectively. The systematic collection and dissemination of data on supply and demand will promote the training of a physician
workforce more consistent with the needs of the nation. Several recent developments increase the likelihood that the marketplace for training physicians will work effectively to reduce the total number of physicians being trained. This includes the BBA that reduces the financial incentives to hospitals to train more physicians, and new testing procedures
for international medical school graduates (IMGs) that may reduce the number of IMGs applying for and entering residency training. Better information would also help address issues of specialty choice and geographic mal-distribution of
physicians.
As a first step in this direction, the Council will reassess the appropriateness of the COGME goal that the future number of physicians entering residency be 110 percent of the number of graduates of allopathic and osteopathic medical schools in the
United States in 1993 and that the percentage of those graduates who complete training and enter practice as generalists
should be 50 percent (herein referred to as the 110/50-50 recommendation). This report identifies several recent developments that impact on supply and/or demand for physician services. They include: the evolving nature of managed
care, the growth in the supply of non-physician clinicians, and the growing percent of women in medicine. These developments may warrant a modification of the Council’s targets.
RECOMMENDATION 2
INTEGRATE WORKFORCE PLANNING FOR PHYSICIANS
AND NON-PHYSICIAN CLINICIANS. A new national system for integrated health workforce planning should be established. This could include an advisory committee or forum that encompasses a wide variety of health professionals in a
collaborative planning process and expanded data collection on all health professions. This could also include a system to track and monitor the impact on residency training of the Balanced Budget Act, the marketplace, State GME policies and other recent developments.
Over the years, the Council has provided general guidance to the medical education community and identified broad goals for the physician workforce of the future. However, as documented the sharp growth in the number of non-physician clinicians, supports the development of a broader planning process that includes non-physician
clinicians as well as physicians. Non-physician clinicians have the potential to improve and strengthen health care delivery through expanded collaboration with physicians. On the other hand, when combined with the growing supply of physicians,
there is a real danger of growing surpluses and wasteful competition for authority and control. It is in the public interest to promote a national health workforce planning process and collaboration among health professionals.
This process should provide a forum for discussion across major health professions and should encourage expanded data collection and evaluation of outcomes for all health professions. An advisory committee, with representation from a wide array
of health professions, could be established to monitor trends in supply, demand and utilization, to promote collaboration among professions, and to promote education and training to meet the health care needs of the nation. Alternatively, existing national advisory committees on the health professions workforce, such as the COGME, and the National Advisory Council on Nursing Education and Practice (NACNEP), could coordinate to carry out integrated analyses and assessments
of the health professions workforce supply.
RECOMMENDATION 3
PROVIDE FINANCIAL INCENTIVES FOR PRIORITY NATIONAL WORKFORCE GOALS. A portion of the GME
carve out from the Medicare+Choice payments should be distributed based on performance consistent with national physician workforce goals.
While progress is being made toward the COGME workforce goals for the nation, progress has been slow and there are some important gaps. There is a continued need to ensure adequate support for quality training in ambulatory settings’,
there are still significant shortages in many rural communities, and there has been little progress in increasing the diversity of the physician workforce. The implementation of the carve out of GME funds from Medicare+Choice, payments authorized by the 1997 Balanced Budget Act, is an opportunity to support these health workforce priorities using existing
funding streams.
The BBA authorizes the phase in of the carve out of GME dollars from the Medicare payments for Medicare+Choice enrollees. The Health Care Financing Administration (HCFA) estimates that the dollar value of this carve out will reach $2.6 billion for Federal fiscal year 2002. The carve out will be a major source of Federal funding for GME. These funds are to be distributed based on current Medicare GME reimbursement policies.
Several States that now carve out the GME portion of Medicaid managed care payments and distribute the funds
to teaching hospitals, link the distribution of a portion of these funds to performance in achieving State workforce policy goals. This includes such goals as increasing the number of generalists being trained and training in ambulatory sites. These State strategies may be models for the Medicare+Choice GME carve out.
Under the Balanced Budget Act, the amount of funds to be carved out of the Medicare+Choice payments
is based on historical rates of GME payments and Medicare patients use of teaching hospitals. Payments to teaching hospitals, however, will be based on actual use of teaching hospitals by Medicare+Choice enrollees. Because use of teaching hospitals by Medicare+Choice enrollees is likely to decrease due to changes in patterns of use under
managed care, the amount carved out of the payments is likely to exceed the amount to be paid out to teaching hospitals. This difference could form the base for financial incentives to promote priority national health care workforce goals. The implementation of the Medicare carve out is an opportunity to promote workforce goals without raising new funds. The Council recommends legislation to authorize these changes.
RECOMMENDATION 4
PROMOTE FEDERAL-STATE PARTNERSHIPS FOR HEALTH PROFESSIONS PLANNING. Federal policy
and programs should support and encourage the development of State GME policy-making structures
and effective workforce policies. The Federal government should explore approaches to collaboration
and partnerships with States with workforce planning systems.
Nineteen States now carve GME funds out of Medicaid managed care payments. Many States are using these funds and/or other State funds to promote and support specific health workforce goals. States have a major interest in GME within their
boundaries. GME is a major determinant of the supply and specialty mix of physicians in most States, which directly affects the availability and cost of services. As documented in this report, many States have recently become involved with GME
financing and policies. This builds on traditional State commitments to undergraduate medical education (74 of the nation’s 125 allopathic medical schools are publicly supported), State supported academic medical centers, and State efforts to address shortages in underserved rural and inner city communities. State GME policies are still in the early stages of development.
A new Federal initiative to help States build the expertise and capacity for workforce planning would be very timely. This might include the expansion of the Health Resources and Services Administration (HRSA) cooperation agreements for State health workforce distribution studies. Particularly important for States is the willingness of HCFA to support
State innovations under the Medicaid program, which is the major source of State GME funding. Permitting the flow of Medicare GME funds consistent with approved State systems and priorities is another option to be explored.
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