profession
Cash-strapped states target residency programs for cuts
■ Academic health centers nationwide are scrambling to reduce costs or find new funding sources to maintain graduate medical education.
By Carolyne Krupa — Posted Oct. 4, 2010
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Maricopa Integrated Health System in Phoenix needs to grow its residency program. Arizona has a shortage of physicians, and more young doctors are seeking training opportunities with the expansion of area medical schools.
But like other states across the U.S., Arizona is facing tough economic times. Legislators cut more than $14 million in graduate medical education funding statewide, meaning a loss of nearly $65 million with federal matching funds. That forced Maricopa Integrated to come up with $2 million usually paid by the state to maintain its $2-to-$1 federal match for Medicaid GME funding.
"We're able to tread water for now," said Michael Grossman, MD, associate dean of graduate medical education at the University of Arizona College of Medicine and vice president of academic affairs at Maricopa Integrated. "We're not planning on cutting back [residency] positions. What we're not doing is expanding programs right now."
Arizona is one of many states that are targeting graduate medical education as a place to trim their budgets. As a result, academic health centers nationwide are scrambling to cut costs or find new funding sources to maintain their residency programs at a time when, they say, they need to be expanding them instead.
Officials have expressed concern that they may have to cut programs if more funding isn't made available soon.
"It's very hard to deal with the needs that academic centers and residency programs see out there -- needs that they want to address but that they cannot," said Roland Goertz, MD, president-elect of the American Academy of Family Physicians.
Medical school enrollment has climbed 2% annually during the past five years due to new medical schools and expansion of existing medical schools. But the number of residency slots funded by Medicare has been capped at 100,000 since 1997.
"The cap was put in place because at the time we thought we would have too many physicians. Obviously that hasn't proven to be true," Dr. Goertz said.
GME funding varies nationwide. In addition to Medicare, states may provide direct payments for residency programs or get a federal match through Medicaid -- the second-largest funding source for GME.
But with no increase in Medicare GME funding and tightening state budgets, academic health centers are unable to expand residency programs to meet increasing needs.
"It's a particularly perplexing problem because of the growth of medical school classes," said Alice Coombs, MD, president of the Massachusetts Medical Society. "How do you increase the GME slots when you don't have the funding that's going to incentivize that? We need more GME slots now."
Some states cut Medicaid GME funds before the economy went sour, said Christiane Mitchell, director of federal affairs for the Assn. of American Medical Colleges.
Forty-one states and the District of Columbia provided some Medicaid support for GME in 2009, down from 47 states in 2005, according to an AAMC survey released this year. Five states -- Massachusetts, Montana, Rhode Island, Vermont and Wyoming -- have stopped Medicaid GME funding within the past five years, costing academic medical centers millions.
"Those were all state budget-driven decisions," Mitchell said.
Despite reductions in some states, overall state Medicaid support for GME increased to $3.8 billion in 2009, up from $3.2 billion in 2005.
At the American Medical Association's House of Delegates in June, delegates approved a report to advocate seeking funding from a variety of sources to create more residency spots. Demand for physicians is expected to outpace supply by as many as 200,000 doctors by 2020.
The federal health reform law calls for redistribution of unused residency positions and more federal funding equivalent to about 300 new training slots, but that's "far below what the population growth and aging population will require," according to the AMA report.
Coping with cuts
Massachusetts has stopped all funding for direct medical education to acute care hospitals. Such cuts have particularly hurt hospitals that serve a disproportionate share of poor and uninsured patients, said Dr. Coombs, a critical care specialist and anesthesiologist at South Shore Hospital in South Weymouth, Mass., and Milton (Mass.) Hospital.
Some states have preserved GME funding by shifting reductions to other areas.
Georgia legislators have made medical education a top priority despite budget shortfalls, said Michael Herbert, the Medical College of Georgia's executive associate dean of administration and interim president and chief executive officer of the Physicians Practice Group.
The medical college opened a four-year branch campus in partnership with the University of Georgia in Athens. The college has satellite clinical campuses in Albany and Savannah, Ga., and plans to open another clinical campus in Rome, Ga. (See clarification)
In 2008, a consultant advised the University System of Georgia that it needed to add more than 100 residency positions to accommodate the additional medical school graduates. The medical college has maintained its residency programs despite a 25% cut in state funding by shifting cuts to other areas, but there's no money to create more residency slots.
"Until such time as the [Medicare] residency cap is increased, we're really not going to make the dent in the physician work-force shortage," Herbert said.
The University of Minnesota Medical School in Minneapolis has expanded its class size 10% but has seen about a $35 million reduction in state funding in the past four years. More cuts are anticipated, said Frank Cerra, MD, the school's dean and senior vice president for health sciences.
"Right now our GME administrative costs are being supported by the [physician] practice plan, and we can't continue to do that," Dr. Cerra said. There is a need to train more physicians, but growing the number of residency slots isn't possible under the current budget situation, he said.
Mitchell of the AAMC said the issue is compounded because the health system reform law will bring an additional 32 million uninsured people into the system.
"While medical schools are working to increase the number of physicians, Medicare and Medicaid are not increasing their support in proportion to the growth," she said. "Now, more than ever, we need support for training additional physicians."