Primary Care Physicians Financing Their Graduate Medical Education in Ambulatory Settings (1989) / Chapter Skim
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Financing of Medical and Graduate Medical Education: Issues in Primary Care Education Support
Financing of Medical and Graduate Medical Education: Issues in Primary Care Education Support
Pages 173-196
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From page 173... ...
Research Professor and Consultant George Washington University Introduction The financing of graduate medical education is complex and evolved pragmatically with the historic development of teaching hospitals and patient care financing. For almost all of this century, medical and graduate medical education clinical instruction has been concentrated in the hospital setting.
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From page 174... ...
Graduate medical education and clinical faculty were supported by hospitals and fees _1 _ ~ 1~__ A_ __ 11 1~ · · ~ ~ · 1 generated oy faculty trom provision ot patient care services to private patients. The majority of clinical education was conducted in hospitals with indigent patients until the advent of Medicare and Medicaid and since that time large programs continue to be concentrated in public hospitals and/or hospitals with large indigent caseloads (Hanft, unpublished)
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From page 175... ...
Biomedical research funding became a major source of revenue for the development of medical schools and the expansion of facula with clinical faculty involved in graduate medical education as well as undergraduate education. NTH grants awarded for the conduct of research and research training included funds for salaries of faculty who conducted research and also spent time in teaching.
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From page 176... ...
During residency years patient care funds from both hospital and faculty practice plan revenues dominate, paying an estimated 80 percent or more of the total costs of graduate medical education, with the majority of funds from hospital revenues. Table ~ shows trends in revenues; Table 2 shows sources of revenue for public and private medical schools.
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From page 177... ...
Table 1 Trends in U.S. Medical School Revenues Selected Years 1971-1987 Revenue Source 1970-1971 1975-1976 1986-1987 Percent Percent Percent Federal research 25.6 24.3 19.9 Other federal 18.8 11.7 3.8 State and local government 18.9 23.8 18.5 Tuition and fees 3.7 4.6 5.3 Medical service 12.2 18.0 37.6 Other income 20.9 17.6 14.8 Total*
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From page 178... ...
Table 2 Revenues of Public and Private Schools by Source of Funds. 1986-1987 Percent Distribution Source of Funds Public Private State and local government 29.7 2.2 Professional fee income 19.4 22.5 Recovery of indirect costs 5.0 S.3 Tuition and fees 3.2 7.6 Endowment 0.2 2.3 Gifts 0.2 1.2 Income from college services i.7 0.S General university funds 2.4 1.0 Reimbursement from hospitals 7.S 21.2 Research and teaching training 1.5 1.1 Sponsored programs*
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From page 179... ...
Biomedical Research Federal direct investment in support of medical education began in the early sixties but indirect support from biomedical research was in place. Biomedical research funding, predominantly from the National Institutes of Health, began to grow rapidly after World War II, and provided a base of indirect support for medical schools, particularly for undergraduate medical education.
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From page 180... ...
Efforts to provide hospital insurance for the elderly and increased federal involvement in the care of the indigent elderly through the Kerr-Mills Act contributed to growing public and congressional fears that the increased demand for services could not be met due to a shortage of health professionals. Although some private and public commission reports urged federal support for health professions education, organized medicine stood firm in its opposition to such support until the early 1960s.
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From page 181... ...
The Congress however, has repeatedly rejected termination of grant support for primary care and family medicine education. Patient Care Support Patient care activities are an integral part of the educational process.
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From page 182... ...
This support took two forms: additional salary support of residents and supervisory teaching physicians in hospitals, and support for patient care services to individuals newly covered by public or private insurance. These new sources of revenue enabled teaching hospitals to expand their residency programs, increase substantially the stipends paid to residents, pay faculty for supervision of residents, and allowed these programs to keep pace with the expansion of undergraduate medical school programs.
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From page 183... ...
Financing of education through third party payments has different economic burdens and benefits than financing through general revenues of government. The benefits and burdens also fall in geographically uneven patterns since the location of graduate medical education programs is not related to per capita population in a state nor to the number of undergraduate medical student positions within a state.
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From page 184... ...
The recent enactment of the Medicare, catastrophic benefits adds a progressive tax for the catastrophic provisions for both Part A and Part B Medicare Part A pays for graduate medical education through a complex methodology that recognizes direct costs and provides an indirect education adjustment.
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From page 185... ...
Physician fee payments in many state's Medicaid programs are also well below the usual, customary and reasonable charges of physicians affecting the revenues of practice plans which provide faculty support. Role of the States The states have played a major role in support of undergraduate and graduate medical education and have been primarily responsible for the expansion of the number of medical schools and for increased enrollment, as well as for the support of primary care residencies.
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From page 186... ...
. The states varsr widely in how they support graduate medical education, their teaching hospitals and the degree of control they maintain over the number of residency positions in their own hospitals with some states, notably New York, attempting to control the total number of residencies.
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From page 187... ...
The financing of graduate medical education however, has not changed accordingly, except for the recent Medicare change which recognizes the direct cost the hospitals pays when the resident is in an outpatient setting, including outpatient settings outside the hospital if the hospital is willing to support these costs. There are no national data on financing of graduate medical education in ambulatory care settings.
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From page 188... ...
While there are two sources of patient care support for hospital based or hospital outpatient linked training there is only one in the non hospital ambulatory care setting. Payments for physicians services as distinguished from payments for hospital services, historically did not incorporate education costs since education was almost exclusively hospital based in allopathic medicine.
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From page 189... ...
The organization of medical schools on a departmental basis and graduate medical education on a specialty/program basis combined with the departmental flow of hospital and practice plan revenues leave the medical school institution with a paucity of flexible funds. Institutions that do not receive public appropriations, or where the appropriation is in the form of line items, unless the institutional percentage of practice plan revenue is .
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From page 190... ...
The departmental structure of practice plans and the consequent lack of flexible funds at the medical school level that could allow it to cross subsidize across revenue generating and nonrevenue generating graduate medical education programs. Greater burden on patients since outpatient services generally have higher proportinate deductibles and coinsurance than inpatient services.
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From page 191... ...
Yet even in these instances ambulatory care training in primary care is more difficult to support than surgical or subspecialty care because of the fee structure. Payment to cover the education costs, assuming that graduate medical education is additive to the cost of practice, would entail transfer of some costs directly to the patient because of deductibles and coinsurance applied to most outpatient services.
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From page 192... ...
Patient care financing under certain programs, notably insurance premiums and Medicare, is regressive. Opponents of using patient care funds to finance graduate medical education object on several grounds: That this constitutes a "sick tax" on teaching patients 192
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From page 193... ...
flow for the support of graduate medical education. The issue is not the amount of revenues but the distribution of the revenues in support of graduate medical education priorities.
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From page 194... ...
Prescription for Change, Report of the Task Force on Academic Health Centers, The Commonwealth Fund, New York. Council on Graduate Medical Education, (COGME 19871.
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From page 195... ...
Report to the Division of Health, State of Wisconsin. Annual Education Milbank Memorial Graduate Medical Lundy, J
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From page 196... ...
(19801. "Financing Graduate Medical Education" in Graduate Medical Education Present and Prospective A Call to Action, Josiah Macy Foundation, Inc., New York.
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