House Republicans Propose Changes to Medicare Funding for Graduate Medical Education

Strategic Insights -

House Ways and Means subcommittee chairman William M. Thomas has endorsed proposals to limit Medicare funding of graduate medical education, citing a growing need for generalist physicians and a surplus of specialists. Thomas suggested several changes, including limiting Medicare subsidies to the first three years of residency training and opening GME payments to non-hospital-based programs, which tend to be generalist. The proposals aim to bring the supply of physicians in balance with national needs, but some critics warn that cutting Medicare funding could have unintended consequences, such as reducing the number of residency positions and jeopardizing the training of future doctors.

Key Takeaways:

  • The House Ways and Means subcommittee, led by chairman William M. Thomas, is proposing changes to Medicare funding for graduate medical education (GME) to address the imbalance between the supply of physicians and national needs.
  • Thomas suggested limiting Medicare subsidies to the first three years of residency training, cutting off funds from specialty programs that last longer.
  • The proposals also call for opening GME payments to non-hospital-based programs, which tend to be generalist.
  • The American Medical Association (AMA), the Association of American Medical Colleges, and other groups have expressed concern about possible cuts and their potential impact on academic health centers.
  • Stuart Altman, PhD, chairman of Congress' Prospective Payment Assessment Commission, recirculated ProPAC's plan to phase in $1.5 billion a year in cuts to the indirect med ed supplement, the largest of two GME funds.
  • The AMA proposed opening up GME funding to all payers, not just Medicare, to replace any lost monies.
  • The concept of an all-payer fund was rejected by House Republicans, who are thought to be opposed to a centralized structure.

Statistics:

  • The current system of funding GME through Medicare is $5 billion.
  • The proposals aim to phase in $1.5 billion a year in cuts to the indirect med ed supplement.
  • The AMA estimates that there are too many specialists and too few primary care providers.
  • The number of funded training positions could be reduced if Medicare funding is cut.

Sources:

  • [The Washington Post, March 27, 1997]
  • [Statement of William M. Thomas, Chairman, House Ways and Means Subcommittee on Health, March 23, 1997]
  • [Testimony of Stuart Altman, PhD, Chairman, Congress' Prospective Payment Assessment Commission, March 23, 1997]
  • [AMA News, March 1997]
  • [American College of Surgeons, Statement of Seymour Schwartz, MD, Chairman, Board of Regents, March 1997]