Given the present methodology for calculating Medicare direct and indirect graduate medical education support, which obstructs rather than facilitates the flow of payments to consortia and community-based training sites, it is understandable that such payments almost invariably are made to hospitals and that, for the most part, individual hospitals within existing consortia maintain their own graduate medical education revenue accounts.
Despite this, a number of consortia have established some measure of collective fiscal authority. About half of the consortia responding to the AAMC/CHP Survey, for example, reported that disbursement of Medicare direct graduate medical education payments was controlled by the consortium as a whole rather than by individual members. Consortia with such authority reported management efficiencies much more commonly than consortia in which payments were controlled by individual members, and the cost of administering educational programs was lower as well. Moreover, developmental and operational costs were more likely to be spread equitably across the entire membership (see p. 40).
It is hardly surprising that collective control of graduate medical education payments is a determinant of administrative success. Nor that partnership equity follows the provision of fiscal authority. It is also likely that the scope and nature of the financial authority individual members cede to a consortium will be a critical arbiter of the power of the organization and of its ability to reform medical education and reshape the physician workforce. After all, to be effective, consortia must have access to the resources essential to the conduct of graduate medical education.
Consequently, COGME recommends that consortia should:
- Have either a prospective agreement on how to determine and distribute graduate medical education payments or a common graduate medical education accounting system;
- Develop mechanisms to ensure that graduate medical education payments are disbursed to training sites on the basis of actual expenses incurred; and
- Develop mechanisms to ensure that operating costs are shared equitably be all members of the organization
Graduate medical education is currently financed from a variety of sources, including Medicare, Medicaid, private insurers, and faculty practice plans, amongst others. However, with the exception of Medicare (and certain Medicaid programs), it has been difficult to quantitate the precise magnitude of such support or to determine whether "educational" monies are truly utilized for education. Because of this, as well as to provide a reliable and equitable financing system, medical educators (and some policy makers) are pressing for the establishment of a "shared responsibility" or "all-payer" system to finance graduate medical education. By ensuring a broad involvement of state and private sector medical insurance systems, together with Medicare, "shared responsibility" financing of graduate medical education would greatly facilitate consortium development, and COGME strongly supports such an approach.
The financing of community-based education is particularly troublesome because of statutory limitations on the direct flow of Medicare graduate medical education payments to health care delivery sites other than hospitals and fiscal disincentives that limit the ability of hospitals to channel Medicare graduate medical education payments to community-based ambulatory care sites. The capital costs of developing non-traditional educational sites and the negative impact of education on clinical productivity in the ambulatory environment raise similar concerns.
Legislation to allow the Health Care Financing Administration to direct Medicare graduate medical education payments to appropriately constituted consortia (and other organizations legitimately involved in graduate medical education) is long overdue. Ideally, such disbursement should not only include Medicare direct graduate medical education payments, but funds equivalent in purpose to Medicare indirect graduate medical education payments as well.
Indirect graduate medical education payments provide compensation for the additional inpatient costs incurred for the specialized services and treatment programs provided by teaching institutions and the additional costs associated with the teaching of residents, and have a vital role in maintaining the financial viability of teaching hospitals. However, such "additional costs" are not restricted to the inpatient environment alone. They arise in the ambulatory care arena, be it hospital clinic or community physician office, as well. As such, they are as worthy of support as inpatient educational costs, especially as the proportion of medical education conducted outside of hospitals increases.
Mechanisms that would resolve all these difficulties have yet to be identified, but both statutory relief and fiscal incentives for academic medical centers to shift appropriate educational costs out of the inpatient and into the ambulatory environment will be needed. As residents move to non-hospital training sites, the "additional costs" born by hospitals should decline. This should allow the transfer of an appropriate portion of Medicare indirect graduate medical education payments to consortia, with subsequent flow of these monies to the non-hospital entities actually incurring the costs of ambulatory care education. Without some mechanism of this sort, it is difficult to envisage how the substantial cost of education in the ambulatory environment could be addressed.
With these considerations in mind, if consortia are to have a role in restructuring the physician workforce, COGME recommends that:
- Statutory limitations precluding the flow of Medicare graduate medical education payments to appropriately constituted educational consortia be eliminated;
- The costs of developing and maintaining hospital- and community-based ambulatory care training sites be taken into ac- count when adjustments in Medicare direct and indirect graduate medical education payments are contemplated;
- If an all-payer system for the support of graduate medical education is enacted, appropriately constituted consortia be able to receive payments from all health care payers; and
- The costs of developing and maintaining hospital and community-based ambulatory care training sites be carefully considered in any new system for financing medical education.
Providing Oversight for the Development & Assessment of Consortia
A viable consortium model must provide for a substantive role in defining educational and workforce outcomes, determining the content and assessing the quality of medical education, and receiving and distributing educational resources. Such a role is best assured by promulgating national standards for educational consortia. However, the development of standards is unlikely to proceed efficiently in the absence of an appropriately constituted oversight body.
Consequently, COGME recommends that:
- An appropriately constituted advisory body, reporting to the Secretary of Health and Human Services, be empowered to guide the development of national standards for graduate medical education consortia;
- These standards be directed at achieving national educational and workforce goals in an accountable and cost-effective manner; and
- This advisory body also oversee the assessment of the effectiveness of consortia in achieving national educational and workforce goals.
In making these recommendations, COGME recognizes the importance of similar bodies already implemented or under consideration at the state level (for example, in New York and Tennessee), and encourages the joint development and implementation of standards for educational consortia by appropriate national, state and regional oversight bodies.
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