Dive Brief:
- An Institute of Medicine panel co-chaired by former Medicare head Gail Wilensky is recommending big changes to the way government pays for doctor training, arguing that the $15-billion system isn't set up to meet future medical workforce needs.
- The funding, which includes $11 billion per year from the federal government and $4 billion per year from states, is arguably not being used efficiently, creating uneven distribution of doctors geographically, an excess of specialists and too few primary care doctors. It also fails to produce cultural diversity in the physician workforce, the report concludes.
- The report, which has been sharply criticized by some physician groups, suggests that the program should be completely overhauled and shifted to a performance-based system, with fewer dollars being funneled into direct subsidies to teaching programs and more going to funding targeted priority medical disciplines and geographic areas.
Dive Insight:
If the government adopts the changes proposed by the IoM panel, teaching hospitals would get the same funding from Medicare over the next decade, though the emphasis of the funding would be different. The panel does not endorse lifting the current cap on residencies supported by Medicare, so any changes to the system would not be based on a higher volume of medical grads. In other words, things would look somewhat similar for the first ten years.
Still, the impact of such changes would be felt sooner in some locales. In particular, major teaching hospitals in the Northeast, which currently consume a disproportionate share of Medicare medical education funding, would face a squeeze. Rather than payments favoring those institutions, payment would shift to a flat "per resident" payment for training sponsors, adjusted for geography. This is likely to be controversial.