1. Policy update: Graduate Medical Education funding Jeffrey R. Jaeger, MD, FACP University of Pennsylvania Health System

2. Outline How is GME funded? Whats wrong with this picture Supercommittee Primer Potential scenarios Advocacy opportunities

3. Graduate Medical Education (GME) funding GME is funded through Medicare (CMS) Since 1980s: 2 funding streams: Indirect and Direct Indirect Medical Education expenses: – Factored in as an adjustment to Medicare billings: Varies based on resident/bed ratio, capped at 5.5% add on Example: If usual Medicare DRG is $10000, we get $10550 – Intended to cover: Sicker patients More complex patients More advanced diagnostic and therapeutic modalities Longer lengths of stay and additional testing

4. GME Funding (cont.) Direct Medical Education expenses: – Intended to cover salaries, benefits, administrative costs, overhead, malpractice, faculty teaching time – Hospital-specific per-resident amount (PRA) based on costs to educate residents in 1983 PRA adjusted for inflation but not work hours reform, competencies, oversight rules – Hospitals DME reimbursement = (# of residents*) x (PRA**) x (% of hospitals business attributable to Medicare) *Capped at 1997 numbers of residents ** Large variations between hospitals

5. GME Funding (cont.) IME > DME for most hospitals treating adult patients* DME + IME = $9 billion+ annually for 100000+ residents and fellows nationally Estimates are that current funding just about covers costs (Steinmann, Annals, 2011) * Pediatrics has a separate funding stream also through Medicare

6. Whats wrong with this picture? From Washington: – 2010 Deficit Commission: Charged with making proposals to address the debt / deficit Recommendation 3.3.5: Reduce excess payments to hospitals for medical education Theres a sense that someone other than CMS / taxpayers (profession, hospitals, other insurers) should be funding training Proposal: Fix DME at 120% of salary and cut IME to 2.2% = $6 billion a year saved – Did not gain enough consensus to make it to Congress

7. Whats wrong with this picture? (2) From multiple sources (lay press, academia, politicians): – If GME is going to be publicly funded, then public priorities should inform GME – Might we structure GME funding to achieve some agreed-upon policy goals? Impact workforce? Bend the cost curve? Speed changes in healthcare delivery?

8. Supercommittee Primer Joint Select Committee on Deficit Reduction 12 Congressmen and –women – 6 Senate, 6 House; 6 Dems, 6 GOP – Must come to consensus on cutting $1.2 trillion over 10 years or automatic cuts go into effect for things near and dear to both parties GME again in the crosshairs with this group

9. Impact of GME cuts Some hospitals will fold their residencies Those that do not: – Most will have to find alternative ways to fund resident education – Many will make cuts: Administration Teaching supplements Benefits Numbers of residents?

10. Impact of GME cuts (cont.) Fewer residents means fewer man-hours available for inpatient care – Hospitals will need to hire more extenders or shift rotations from elective/outpatient to inpatient But… Internal Medicine (IM) residents need to spend 1/3 of their time in outpatient, and 130 half-days in continuity clinic – Will the ACGME change the rules for the health of hospitals? – Or will they stand pat?

11. What about a legislative fix? What might we see? – No change? – All-payer funding of GME? – $$$ shifted to programs training PCPs? Its already in Healthcare Reform law (PPACA) Will it include IM? Who would pay to train specialists? – Support for development of new specialties?

12. What does it mean in the medium term? Anyones guess… AMCs and hospitals positioned to compete for funding directed at primary care education will be in better shape AMCs and hospitals positioned to find internal funding for GME will be in better shape ACGME and ABIM may be under pressure to create paths to practice that more reliably produce the docs the nation thinks it needs

13. Pathways to advocacy Call your Representative and/or Senators and ask to speak to the staffer for health care or education Find contact information at http://www.usa.gov/Contact/Elected.shtml Especially important if your Congressman or – woman is on the Supercommittee

14. Supercommittee Membership House of Representatives: – Rep. Jim Clyburn (D-S.C.) – Rep. Xavier Becerra (D-Calif.) – Rep. Chris Van Hollen (D-Md.) – Rep. Jeb Hensarling (R-Texas) – Rep. Dave Camp (R-Mich.) – Rep. Fred Upton (R-Mich.) Senate: – Sen. Max Baucus (D-Mont.) – Sen. John Kerry (D-Mass.) – Sen. Patty Murray (D-Wash.) – Sen. Jon Kyl (R-Ariz.) – Sen. Pat Toomey (R-Pa.) – Sen. Rob Portman (R-Ohio)

15. Advocacy (cont.) ACP Capwiz has links facilitating advocacy on GME: http://capwiz.com/acponline/home/http://capwiz.com/acponline/home/

16. When you write or call Make it clear that you are a physician, caring for patients on Medicare, and that you support preserving funding for Graduate Medical Education Personalized letters with stories about patients are the best Its important to acknowledge the reality that everyone is going to have to pitch in

17. Summary GME funded mainly through CMS Current solution to debt/deficit presents likely cuts to GME funding Outcomes and impact remain unclear Advocacy from academic medicine and from actual residents is critical