IOM Report Calls for Reforming Physician Education Funding

Medicare provides much of the public financing for graduate medical education -- an estimated $9.7 billion in 2012. The report calls for more oversight and accountability.

The Institute of Medicine on July 29 released a report titled "Graduate Medical Education That Meets the Nation's Health Needs." Prepared by a 21-member IOM committee, the report recommends significant changes to optimize the public's investment in GME -- the system of residency and fellowships that are provided for physicians after the obtain a medical degree.

The scale of government support for physician training far exceeds that for any other profession, but transparency and accountability are lacking in the GME financing system, the report notes.

The estimated sources of $15 billion in public funding for GME in 2012 included Medicare ($9.7 billion), Medicaid ($3.9 billion), the U.S. Department of Veterans Affairs ($1.437 billion), and the Health Resources and Services Administration ($464 million), according to the report. Additional sources included the Department of Defense, state sources, private insurers, and other private sources.

The recommendations were made because the Medicare GME payment rules date to 1965, and the payment system discourages physician training outside the hospital, even though most health care is now delivered outside of hospitals in the United States. The committee recommended a 10-year transition from the status quo to full implementation of its recommendations.

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