Richard Silver, M.D., agrees that the funding mechanisms for graduate medical education need to be retooled, but that's where his agreement with an influential IOM committee seems to end.

"Whether overt or under the guise of better training for doctors, you are talking about significant reductions in funding," Silver told me yesterday. Those cuts, he says, would dramatically impact patient care and teaching hospitals' ability to train physicians.

The chief academic officer and chairman of the department of obstetrics and gynecology services at NorthShore University HealthSystem, Evanston, Ill., was reacting to an IOM report issued yesterday that called for major changes to the way GME is funded and organized, including embracing a performance-based system, combining GME and IME into one pot of money, and creating a transformation fund to "finance incentives" for innovative GME programs. Silver's concerns echo those from key hospital lobbying groups, including AAMC and the AHA.

Linda Fishman, senior vice president, public policy analysis and development at the AHA, stated that the panel's recommendations "do not adequately address the current limits on the number of Medicare-funded residency training slots when a nation is already facing a critical shortage of physicians."

The IOM took up the GME issue at the request of the Josiah Macy Jr. Foundation. Eleven other organizations joined in funding the research. GME is a big-ticket item, costing $15 billion annually. Medicare and Medicaid cover the lion's share — $9.7 billion and $3.9 billion, respectively, in 2012. The panel, co-chaired by former CMS administrators Don Berwick, M.D., and Gail Wilensky, calls on Congress to enact changes that would "better shape the physician workforce for the future."

During a discussion about the report, which was streamed on the IOM's website, Wilensky argued that the recommendations hold Medicare funding steady, but seek to realign incentives with a delivery system that's evolving to more team-based care and more reliant on ambulatory and home-based services.

"We are saying that when it comes to the use of public funds, like Medicare, those should be targeted to meet public needs," she said, adding that as the delivery system moves toward a value-based model, doc training should follow suit and reward performance.

One of the recommendations would shift funding to organizations that sponsor residency programs, rather than having it just go to teaching hospitals. About half of residency programs are sponsored by teaching hospitals, according to the report. "Hospitals have little incentive to train residents in community ambulatory settings," the report states. Giving "fiduciary control" to sponsoring organizations would, in the panel's assessment, ensure that money and training flow to nonhospital settings.

Silver doesn't dispute that some teaching hospitals have trouble providing residents with those experiences. However, he points out that NorthShore, an integrated system, has begun to leverage its resources and provide residents with significant experience in ambulatory settings. He believes partnership between institutions, like the one NorthShore has with the University of Chicago for family medicine, can further expand those opportunities.

He also suggests that market forces can help to address some of the challenges the nation is seeing in terms of the right mix of physicians. For instance, NorthShore has doubled the size of its family medicine residency over the past couple of years. That's in direct response, he says, to the increased emphasis on primary care.

So what's next? A healthy debate, that's for sure, which is kind of what George Thibault, president of the Josiah Macy Jr. Foundation, wants. During the panel discussion, he asked stakeholders to read the report carefully and engage in a fair dialogue about what can be done to fix the system. He outlined five key principles behind the report, and suggested that people keep them in mind as they review the recommendations:

  1. Create accountability.
  2. Develop educational goals that meet the public's needs.
  3. Promote innovation.
  4. Ensure a sense of stability (in governance and financing).
  5. Improve alignment between the education and delivery systems.

"The system can't be changed overnight. We need everyone's involvement," Thibault said, adding, "We can work on the details."

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