Institute of Medicine recommends reform of graduate medical education financing

Since the creation of the Medicare and Medicaid programs in 1965, the public has provided tens of billions of dollars to fund graduate medical education (GME). But according to a recently released report by the Institute of Medicine (IOM), there is a striking absence of transparency and accountability in the GME financing system for producing the types of physicians the nation needs. For instance, GME payments continue to reflect an era when hospitals were the central site for physician training. This despite drastic changes in the healthcare system that increasingly place the burden of chronic disease, the need for greater emphasis on preventive care, and modern information technologies in community settings that rely on non physicians and integrated care models.

The IOM came up with the following recommendations:

  • Maintain Medicare GME support at the current aggregate amount while taking essential steps to modernize GME payment methods based on performance, to ensure program oversight and accountability, and to incentivize innovation in the content and financing of GME.
  • Build a GME policy and financing infrastructure.
  • Create one Medicare GME fund with two subsidiary funds: operational and transformation.
  • Modernize Medicare GME payment methodology.
  • Medicaid GME funding should remain at the state’s discretion. However, Congress should mandate the same level of transparency and accountability in Medicaid GME.

More information can be found here.

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