Performance Improvement 2007. How Should Graduate Medical Education in the United States Best Be Financed?



This study evaluated the current system, and assessed the strengths and weaknesses of different methods for financing graduate medical education. Researchers performed a literature review and held discussions with experts in the United States and abroad. The study identified a number of ways in which the Medicare program's nearly $8 billion annual support for graduate medical education could be improved. Most of these improvements centered on changes to the formulas used to determine the level of payments Medicare makes to teaching hospitals. The researchers observed that the current system for financing graduate medical education is complicated and the costs of the activities it supports are difficult to measure.

The study identified five elements on which to evaluate any alternatives to the current system: equity, adequacy, efficiency, accountability, and administrative feasibility. Three different models identified in the study for financing graduate medical education were: market-, incentive-, and regulatory-based approaches. Researchers did not recommend replacing the current system, but suggested changes to address limitations in the present system and to achieve particular policy goals. The study cited two policy directions for making refinements for Medicare policies: either emphasizing that Medicare's purpose is to pay for patient care provided to Medicare beneficiaries or using graduate medical education payments to achieve health care workforce needs. The study concluded that any changes in funding policies should occur gradually in order to allow program sponsors and affiliated teaching institutions time to adjust to any redistribution of funds.

Report Title: Alternative Ways of Financing Graduate Medical Education
Agency Sponsor: ASPE, Office of the Assistant Secretary for Planning and Evaluation
Federal Contact: Nonnemaker, Lynn, 202-690-7807
Performer: Rand Corporation; Santa Monica, CA
PIC ID: 8294

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"PerformanceImprovement2007.pdf" (pdf, 717.63Kb)

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