The State of Graduate Medical Education Funding and Meeting Our Nation's Health Care Needs.

Direct GME funding from Medicare is calculated by a ratio of the total number of inpatient days spent by Medicare patients divided by the total number of inpatient days by all patients in a specific hospital. Residents in primary care specialties (ie, family medicine, general internal medicine, general osteopathic medicine, general pediatrics, geriatric medicine, obstetrics and gynecology, and preventive medicine) receive a slightly higher PRA because of a 6% inflation update in 1994 and 1995 that was not similarly adjusted for non–primary care residents.7,6 Teaching hospitals generally incur more costs because they have a sicker patient load and more nonquantifiable costs (eg, residents ordering extra tests) and therefore receive additional indirect GME funding.8 Indirect GME payments are based on a formula of the ratio of the number of interns and residents and the number of patient beds (institutional review board [IRB] ratio) adjusted with a variable multiplier and IRB ratio caps that are set by Congress. Indirect GME payments are not weighted like direct GME funding in which the number of residents in their “initial residency period” are counted as 1.0 FTE and those beyond this period as 0.5 FTE. These funding formulas are adjusted with each new legislative action on GME. The Institute of Medicine (IOM) released their recommendations in Graduate Medical Education that Meets the Nation’s Health Needs1 on July 29, 2014, pushing for a substantial overhaul of GME financing and governance over the next 10 years to increase transparency and accountability. These recommendations seek to address the geographic, subspecialty, and practice-setting discrepancies that exist vs the type of health care in demand by patients and health care facilities. Unless these recommendations become enacted into law by Congress, aggressive lobbying efforts will continue to occur to block their realization. Supporting and opposing arguments for each recommendation1 are outlined below. The State of Graduate Medical Education Funding and Meeting Our Nation’s Health Care Needs