Graduate Medical Education Financing and Governance Reform: How Does the Institute of Medicine's Report Impact Pediatrics?

Abstract

T he Institute of Medicine’s (IOM) recently published report, Graduate Medical Education that Meets the Nation’s Health Needs, recommends significant changes in the $15 billion per year, taxpayer funded graduate medical education (GME) program. An interdisciplinary, diverse, and ideologically disparate 21-member IOM Committee on the Governance and Financing of GME was charged with developing recommendations for policies to improve GME. They strived to critically review the empirical evidence and answer the overarching question: “To what extent is the current GME system producing an appropriately balanced physician workforce ready to provide high-quality, patient-centered, and affordable health care?” The committee concluded almost 2 years of deliberations by issuing a 209-page report in July 2014, which contains 5 bold recommendations to be phased-in over a 10-year period: (1) maintain Medicare GME funding at the current aggregate amount while transitioning to a performance-based system and a phase out of the current Medicare GME payment system; (2) build a GME policy and financing infrastructure, to include a new GME Policy Council in the Office of the Secretary of the US Department of Health and Human Services and a GME Center within the Centers for Medicare and Medicaid Services; (3) create 1 Medicare GME fund with 2 subsidiary operational and transformational funds; (4) modernize GME payment methodology to include replacing the current indirect and direct GME funding streams with 1 payment based on a national per-resident amount (PRA); and (5) maintain Medicaid GME funding at the state’s discretion. The report embeds cross-cutting themes of transparency and accountability while seeking to transform a dated, inpatient-based GME payment methodology to one that reflects the increasingly important ambulatory and community-based clinical and education sites. The report also implicitly recognizes that the publicly funded GME program must be responsive to the nation’s workforce needs in an evolving health care delivery system. Although adapting the current GME program may result in incremental change, the committee emphasized the need for transformational change.