Graduate medical education funding mechanisms, challenges, and solutions: A narrative review

Abstract

Background: With increased attention on the federal budget deficit, graduate medical education (GME) funding has in particular been targeted as a potential source of cost reduction. Reduced GME funding can further deteriorate the compensation of physicians during their residency training.

Methods: In order to understand the GME funding mechanisms and current challenges, as well as the value of the work accomplished by residents, we searched peer-reviewed, English language studies published between 2000 and 2019.

Results: Direct and indirect GME funding is intended to support resident reimbursement and the higher costs associated with supporting a teaching program. However, policy efforts have aimed to reduce federal funding for GME. Furthermore, evidence suggests that residents are inadequately compensated because their salaries do not reflect the number of hours worked and are not comparable to those of other medical staff.

Conclusions: Our review suggests that creative solutions are needed to diversify GME funding and improve resident compensation.

Keywords: Funding; Graduate medical education; Resident compensation.

Fig. 1

Direct and Indirect graduate medical education payment formulas. IME payments are adjustments to the operating and capital portions of the Medicare inpatient prospective payment system (IPPS) per-discharge payment. Adjusted rolling average FTE count, IRB, and RADC are subject to Medicare GME cap. GME – Graduate Medical Education. DME – Direct Graduate Medical Education. IME – Indirect Graduate Medical Education. FTE – Full Time Equivalent. IRB = intern and resident-to-bed ratio. RADC = resident-to-average daily census ratio.

Fig. 2

Timeline of policy milestones in Graduate Medical Education financing. GME – Graduate Medical Education. DME – Direct Graduate Medical Education. DRG – Diagnosis Related Group. IME – Indirect Graduate Medical Education. PRA – Per Resident Amount. CHGME – Children’s Hospital Graduate Medical Education. HHS – Department of Health and Human Services. CMS – Centers for Medicare & Medicaid Services. HRSA – Health Resources and Services Administration. FY – Fiscal Year. CPI-U – Consumer Price Index for all Urban Consumers.

Fig. 3

Graduate medical education funding mechanisms. GME – Graduate Medical Education. DME – Direct Graduate Medical Education. IME – Indirect Graduate Medical Education. CHGME – Children’s Hospital Graduate Medical Education. HRSA – Health Resources and Services Administration. VHA – Veterans Health Administration. DoD – Department of Defense. Not depicted are teaching physicians, who receive salary support from DME, private payer payments, teaching hospitals, community-based training sites, and medical schools, and contribute faculty revenue to teaching hospitals, community-based training sites, and medical schools.

Fig. 4

Graduate Medical Education average per resident payment, 2010. Data from Mullan et al..