Report at a Glance
Goals for Improved GME Financing
The IOM committee identifies six goals for an improved GME financing system. These goals guided the committee’s assessment of current GME funding and shaped its recommendations for reform.
- Encourage production of a physician workforce better prepared to work in, help lead, and continually improve an evolving health care delivery system that can provide better individual care, better population health,and lower cost.
- Encourage innovation in the structures, locations, and designs of GME programs to better achieve Goal 1.
- Provide transparency and accountability of GME programs, with respect to the stewardship of public funding and the achievement of GME goals.
- Clarify and strengthen public policy planning and oversight of GME with respect to the use of public funds and the achievement of goals for the investment of those funds.
- Ensure rational, efficient, and effective use of public funds for GME in order to maximize the value of this public investment.
- Mitigate unwanted and unintended negative effects of planned transitions in GME funding methods.
Significant reforms are needed to ensure value in the public’s sizable investment in physician education. Because the rules governing Medicare GME financing are rooted in statute, they cannot be revised without legislative action. As such, the IOM committee strongly urges Congress to amend Medicare law and regulation to allow a transition to an accountable, performance-based system. Transforming Medicare’s role in financing GME will be a complex undertaking and requires careful planning. The committee recommends a 10-year transition from the status quo to full implementation of its recommendations, followed by a reassessment of the need for continued Medicare GME funding. Every effort should be made to mitigate negative effects for the institutions involved. Specifically, the committee recommends:
- Investing strategically: Maintain Medicare GME funding at its current level, but modernize payment methods to reward performance, ensure accountability, and incentivize innovation in the content and financing of GME. The current Medicare GME payment system should be phased out.
- Building an infrastructure to facilitate strategic investment: Establish a two-part governance infrastructure for federal GME financing. A GME Policy Council in the Office of the Secretary of the Department of Health and Human Services should oversee policy development and decision making. A GME Center within the Centers for Medicare & Medicaid Services should function as an operations center with the capacity to administer payment reforms and manage demonstrations of new payment models.
- Establishing a two-part Medicare GME fund: Allocate Medicare GME funds to two distinct subsidiary funds—a GME Operational Fund to finance ongoing residency training activities and a Transformation Fund to finance development of new programs, infrastructure, performance methods, payment demonstrations, and other priorities identified by the GME Policy Council.
The IOM committee began its deliberations with a basic question: Should the public continue to support GME, and, if so, at what level? Ultimately, the committee concludes that continued Medicare support is warranted—at least for the next decade—assuming that current deficiencies are resolved. 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.