Graduate Medical Education Reform: A Worthy Trek Through Thin Air

By Steve Lipstein

Recently, the Institute of Medicine released recommendations of a Committee, chaired by former CMS administrators Gail Wilensky and Don Berwick, chartered to conduct an independent review of the governance and funding of graduate medical education in the United States. The recommendations are aimed at producing a physician workforce that better meets the nation’s health needs.

Upon reading the IOM report, I immediately retrieved a dust-covered copy of the 1985 Report of the Commonwealth Fund Task Force on Academic Health Centers entitled Prescription for Change. A much younger version of me served as the associate program director for this compilation of three reports: “The System and Costs of Graduate Medical Education Programs in the United States;” “The Role of Teaching Hospitals in the Care of the Poor and the Uninsured;” and “The Future Financing of Teaching Hospitals.”

The 1985 Task Force report on graduate medical education “outlines the system of resident training in this country and describes the multiple organizations that influence the size, content and length of such graduate programs. The report finds that none of these organizations has a proper relationship to the financing of graduate medical education and none takes real responsibility for the overall size and cost of graduate medical education.”

In this regard, not much has changed in the past three decades. Myriad problems in the structure and financing of GME remain, and there is now an even keener appreciation that the physician workforce being produced is insufficient in size, specialty composition, and geographic distribution to meet the nation’s health needs.

Policymakers fear that the academic medicine establishment may not be equal to the task of needed reforms. Typically, my teaching hospital and medical school colleagues advocate for no disruption to current direct (DME) and indirect (IME) graduate medical education cash flows, and seek greater funding for GME “slots” to increase the output of residency-trained physicians to serve the needs of an aging and growing US population.

In their defense, the Association of American Medical Colleges (AAMC), the national advocacy organization for teaching hospitals and medical schools, has advanced the dialogue around greater accountability for the output of GME programs – including a physician workforce better trained and more skilled in patient safety and medical error prevention, team-based multi-disciplinary care, use of information technology, evidence-based decision making, and techniques of performance improvement.

And, in September, the IOM produced a discussion paper on the “Essential Stewardship Priorities for Academic Health Systems,” which describes these systems as extending well beyond the historical and dated definition of one medical school and one teaching hospital to a larger, more diverse and better connected system of care delivery facilities and health services,  now able to offer many venues for graduate medical education, reaching from primary care-based medical homes, to outpatient specialty care centers, to the more traditional acute care hospitals, and then into transitional care settings that offer rehabilitation, sub-acute care, and home-based services.

Nevertheless, problems with the structure and financing of graduate medical education programs in the United States are real, are well-known, and are well-documented. In this respect, the IOM Report offers a reaffirmation of a long-standing diagnosis. However, unlike the earlier work of the 1985 Commonwealth Fund Task Force (which recognized that it is unwise to separate the structure and financing of GME in isolation from the financing of the other societal missions of teaching hospitals), this latest 2014 version of a “prescription for change” offers up several legislative reforms as “remedies” that fail to take into account the other, already legislated health care reform remedies that affect the future financing of all hospitals.

At a recent forum to review the IOM proposals, hosted by Health Affairs, I shared with the audience a broader context within which to consider potential reforms to GME financing.

Imagine that the nation’s teaching hospitals are now engaged in a worthy trek to higher elevations, in pursuit of the nation’s triple aim of improved health, improved experiences of health care and outcomes, and lower per capita costs – as well as academic medicine’s triple aim of educating health care professionals, advancing medical science and generating new knowledge, and providing medical care of the highest order and sophistication. A triple aim times two!

Next, imagine that as these teaching hospitals reach higher and higher altitudes, the air gets thinner and thinner – meaning that the costs of achieving these two triple aims is increasing faster than sources of revenue can keep pace. It gets harder and harder to breathe.

Along this upward journey, the government passes a law (The American Recovery and Reinvestment Act of 2012), mandating that all hospitals shall become meaningful users of health information technology. A worthy goal no doubt, but also an endeavor that is consuming more health care “oxygen” (the money that is needed to sustain a viable health care enterprise). This upward trek next encounters  the Patient Protection and Affordable Care Act of 2010 – a complicated law with a simple straightforward goal – to reduce the number of people living in the United States who do not have health insurance. The means to this end require an oxygen transfer from the Medicare “tanks” (as well as other sources) to fill additional oxygen tanks for Medicaid expansion and to subsidize health insurance premiums at newly established health insurance exchanges. The problem is that 23 states have not yet purchased the Medicaid expansion tanks, making it harder for hospitals in these states to breathe at higher altitudes of performance. In 2011 and 2013, the Budget Control Act and the Taxpayer Relief Act, respectively, remove even more oxygen from the Medicare tanks, depletions that further reduce Medicare payments to all hospitals.

At the same time, CMS is moving aggressively to remove oxygen from the fee-for-service payment tanks, transferring the vacuumed air to the pay-for-performance oxygen tanks (e.g. value-based purchasing, hospital readmission rate reduction program, and health care-acquired condition penalties) – then moving that “air” away from the P4P oxygen tanks to the Shared Savings oxygen tanks (e.g. accountable care organizations) – and perhaps, finally to the full-risk oxygen tanks (e.g. Medicare Advantage).

There is a lot of oxygen being moved around on the mountain of health care reform. Some hospitals are well positioned to acclimate to the thinner air and adapt to a new oxygen saturation level. They tend to be the hospitals located in affluent communities and the hospitals located in local taxing jurisdictions with a sufficiently wealthy tax base willing to provide oxygen for locally sponsored safety net care (e.g. Grady Hospital in Atlanta, Cook County Hospital in Chicago, Denver Health, Parkland Hospital in Dallas). Other hospitals are breathing heavily, and some are beginning to die (literally) on this mountain of health care reform. These oxygen-deprived hospitals tend to be in poor rural and urban core communities, and in local taxing jurisdictions without sufficient wealth to underwrite local safety-net care.

Against this backdrop, on this mountain of health care reform, as we climb upwards to the summit of these two triple aims, come the IOM recommendations: Drain the current IME and DME oxygen tanks and transfer the oxygen to two new tanks – an operational GME oxygen tank and a transformational GME oxygen tank. And the recommendations go further to place the governance of these two new GME oxygen tanks within HHS and CMS.

My questions:

  1. Who in HHS or CMS ever stays around long enough to accept accountability for the hospital “life and death” outcomes in the American health care system, attributable to moving this much oxygen around over a relatively short time frame?
  2. Is it responsible, or even reasonable, to look at the DME and IME oxygen tanks in isolation from all the other oxygen tanks necessary to finance a teaching hospital?
  3. How can we be sure that safety nets will survive in local taxing jurisdictions that are simply too poor to support a health care provider absent federal government oxygen?

Back in 1985, the Commonwealth Fund Task Force on Academic Health Centers was wise in developing a “prescription for change” that recognized the interdependencies of reforming graduate medical education, care of the poor and the uninsured, and the future financing of teaching hospitals. I encourage the IOM and CMS and other champions of transforming GME to consider:

  • all of the oxygen tanks that support the nation’s teaching hospitals, and not just the IME or DME tanks
  • the stark differences among teaching hospitals, specifically those that exist in local taxing jurisdictions with and without locally funded safety net hospitals
  • new ways to reform GME at a regional, as opposed to a national, level (the country has simply grown too big and too diverse to establish federal policy that effectively addresses the nation’s health needs)
  • structures that do not necessarily create more centralized control and bureaucracy within the federal government, but rather are independent of, yet accountable to government
  • GME reformers who have managed change processes at scale (as contrasted with physician educators who have worked in one specialty area, in one GME program, in one teaching hospital, in one city).

GME reform is necessary. Importantly, however, the operating models and the economic models in each physician specialty area have as much or more influence on the composition of the nation’s medical workforce, as does that specialty area’s training model. Solutions that create more central bureaucracy to reallocate oxygen among the various tanks that support graduate medical education are not workable in a country as large, as complex, and as diverse as the United States.

Steve LipsteinSteven H. Lipstein is president and CEO of BJC HealthCare, one of the nation’s largest health care organizations.  

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