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FINANCING GRADUATE MEDICAL EDUCATION IN PRIMARY CARE:
OPTIONS FOR CHANGE
Sandra C. Peinado, M.D.
Fellow, General Internal Medicine
and
John M. Eisenberg, M.D., M.B.A.
Sol Katz Professor of General Internal Medicine
University of Pennsylancia School of Medicine
Abstract
To satisfy the nation's need for well-trained primary care physicians,
graduate medical education in primary care requires adequate financial support.
The current mechanisms of GME financing favor inpatient and procedural care,
making the support of primary care programs difficult, since they are more
oriented towards outpatient evaluation and management. The majority of
graduate medical education funding comes from patient care reimbursement
through Medicare Part A direct and indirect payments, and other third party
payers. This scheme results in difficulties for primary care programs in resident
and faculty compensation, as well as general difficulties for primary care program
development.
Criteria for evaluating proposals that aim to improve the financial support
of primary care programs include financial, administrative, and educational
implications of the options, as well as the views of interested stakeholders. The
alternatives for sources of funds to support primary care GME include changes in
existing Medicare payments, an increase in categorical GME funding, an increase
in ambulatory payment, an increase in grants, commitments from future
employers, and a redistribution of current funds. Alternatives for spending these
funds to aid primary care programs include dividing the sources in three ways: on
a per-resident basis, by competitive grants, or by incentives for primary care
education. An analysis of the alternatives for changing GME financing is
discussed in the paper. The most favorable options are summarized and
recommendations for further analysis are made.
The education of primary care physicians is of growing national concern.
However, graduate medical education (GME) is principally funded through patient
care reimbursement for inpatient and procedural care. While there has been a
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general shift from inpatient to outpatient sites for all medical training, primary
care programs provide a greater proportion of care in ambulatory settings, and are
less procedurally oriented than other specialties. Thus, residencies in family
medicine, general internal medicine and general pediatrics are less likely to be
adequately reimbursed by patient care funds. Alternatives for improved financing
of primary care GME must be explored if the nation's need for an adequate
supply of well-trained primary care physicians is to be fulfilled. Financial support
is needed to assure both an adequate supply and a high level of quality in primary
care programs.
The current mechanisms for funding GME will be reviewed briefly here and
the resulting difficulties encountered by primary care programs discussed. We
delineate a set of criteria by which any alternative method of graduate medical
education financing should be judged. The range of options for change is
described and then analyzed in terms of the ability of each option to satisfy the
proposed criteria.
Current GME Financing
Funds for residency programs are generated primarily from patient care
reimbursement by third party payers. Additional funds derive from direct federal,
as well as state and local support. The degree to which the financing of general
internal medicine, general pediatrics, and family medicine programs differs, if at
all, from the general pattern of GME financing is not well known.
Payment for Patient Care
Under the Prospective Payment System, Medicare Part A reimburses
teaching hospitals for a proportion of the direct costs of medical education. These
include residents' salaries and fringe benefits, administration and supervision costs
of teaching physicians, education supplies, space costs, and associated overhead.
Faculty salaries can be included if the teaching physician is salaried by or works
under a written agreement with the hospital. Teaching hospitals are paid a set
amount by Medicare for each resident, based on each hospital's 1984 costs,
adjusted for inflation. Estimates of the magnitude of these payments in 1988
range from $975 million) to $1.4 billions.
In addition to these direct cost payments, Medicare Part A pays teaching
hospitals for the indirect costs associated with graduate medical education.
Introduced by HCFA in 1980, these payments reimburse hospitals for the higher
operating costs associated with resident-directed patient care. As described by
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Judith Lave in a review of these payments, published in this volume, reasons for
the higher costs of teaching hospitals may include: "the increased use of ancilIarsr
services due to the residents' inexperience; the tendency in teaching hospitals to
tog to make a more accurate diagnosis both for educational purposes and to satisfy
the more academically minded physicians' need to know; the increased availability
of state-of-the-art testing facilities and treatment technologies; the fact that very
sick patients may be treated more aggressively and more innovatively; the
decreased productivity of other employees such as nurses who have to break in
the new residents and increased record keeping requirements."3 The indirect
payment is based on a percentage of a hospital's ratio of residents to beds. For
fiscal year 1989, PPS payments to teaching hospitals are increased by 7.7 percent
for each 0.! increase in a hospital's resident-to-bed ratio). In 198S, these
payments were estimated to be $2.02 billion dolIarsi.
In addition to these payments to teaching hospitals under Medicare Part A,
teaching physicians can bill for patient care under Medicare Part B. This includes
patient care services provided while fulfilling supervisory duties.
Medicaid has lagged behind Medicare in its reimbursement to teaching
hospitals for the costs of GME. Of 37 states with Medicaid prospective payment
systems, 23 include "some type of adjustment for teaching costs."2 Some states
have threatened to withdraw their support of graduate medical education through
Medicaid.
Private insurers have traditionally paid teaching hospitals' higher charges,
which have included the costs of GME. Specific funds are not targeted as a GME
contribution by insurance companies, in large part because hospitals have not
specified what portion of their charges could be attributed to resident and fellow
training. With the advent of HMO's, PPO's, and other managed care
organizations negotiating for lower hospital charges, however, a lower proportion
of GME costs can be expected to be obtained from these sources4.
Direct Federal Support
The Veterans Administration currently supports 12% of residency positions
in the U.S. In 1988 the VA invested $224 million in resident salaries and fringe
benefits alone. As of 1986, this included 15% of all general internal medicine
residents, only 1.~% of family medicine residents, and none in general pediatrics5.
Title VIT of the Public Health Service Act enables the Bureau of Health
Professions to help support approximately 10-15% of residencies in internal
medicine and pediatrics. In 198S, 79 awards, totalling $13.S million, were
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approved for general internal medicine and pediatric residencies. Grants to 184
programs in family medicine were approved for a total of $20 millions. Originally
designed to help increase the overall number of physicians today, grants under
Title VII are awarded to programs that aim to redress perceived geographic and
specialty maldistribution of physicians7. This section of the Public Health Service
Act also enables the Bureau of Health Professions to support faculty development
in family medicine, general internal medicine and general pediatrics. In 198S, 29
family medicine programs received $4.5 million for this purposed.
Direct State Support
State support of GME is highly variable but generally stems from three
sources other than Medicaid payment. State governments provided operating
subsidies to teaching hospitals in 29 states as of 19872. Direct support for
resident education was provided by 37 states, 17 of which targeted this support to
family practice programs. State support to medical schools indirectly aids GME in
its support of supervising physicians' salaries2.
Issues For Primary Care GME Raised By Current Funding Scheme
Primary care residencies spend most of their resources on personnel costs.
The main components of their budget include the following: full and part-time
faculty salaries, residents' salaries, administrative costs of academic units,
operating costs of outpatient centers, and educational evaluation and/or quality
controlled. These costs have been particularly difficult for primary care
residencies to cover for several reasons. These include the facts that 1) the
services pronded by primary care residents and faculty are generally paid at
relatively low levels compared with inpatient and procedural services; 2) primaly
care residents' contributions to the operation of hospital inpatient programs may
be perceived by the hospital administration to be less essential than that of
residents in other specialties; 3) primary care residencies include a number of
rotations on other specialty services, usually in outpatient settings, where the
residents' abilil~r to pronde service is limited; and 4) primary care programs
generally include substantial amounts of formal education in topics such as
prevention, medical decision-making, and doctor-patient communication, and this
time in conferences and workshops may occur at the expense of service time.
From the point of view of primary care residencies, the current scheme of
financing graduate medical education principally through hospital payment is
flawed. Physician payment also favors surgical and certain medical fields by
paying them disproportionately for patient care, so that physicians' revenue from
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patient care is less capable of cross-subsidizing educational programs. Other funds
are insufficient for primary care program development. In the following
paragraphs, the problems of the current GME reimbursement scheme are
discussed in somewhat more detail in terms of how the arrangements result in
difficulties in resident and faculty compensation, as well as general difficulties for
primary care program development.
Resident Compensation
1. Since the majority of patient care payment (and also the majority of
GME financing) is obtained through hospital care, residents and their educational
programs are disproportionately reliant on inpatient hospital services ii.
2. Residents are an important and apparently economical source of
manpower for teaching hospitals. Several studies have shown that replacing
residents with fully trained workers would cost hospitals more than residents'
salaries 12. In shifting the training of residents, especially primary care residents,
to the outpatient setting, hospitals will be forced to hire more clerical and
technical support, nurses, and house physicians, and to develop better clinical
information systems. Thus, unless hospitals are reimbursed for the time spent
by residents in outpatient settings, they are likely to oppose the development of
curricula that focus on those settings and deploy residents away from traditional
inpatient settings.
3. Under Medicare Part A direct medical education payments, wide
variation exists in per-resident costs among hospitals. The range of per resident
amounts for the base year varies from below $10~000 to over $100~000 per
residenti3. This differential is now fixed at 1984 levels and embedded into the
formula used by Medicare7. This has almost certainly led to inequities among
teaching hospitals in their ability to fund primary care programs and to support
reform of residency education.
4. The Omnibus Budget Reconciliation Act of 1986 allows, under Medicare
Part A direct GME payments, that residents' time in outpatient settings may be
paid by hospitals if those hospitals incur "all or substantially all" of the cost of
training. How this will be interpreted is important for the continued development
of an adequate variety of outpatient teaching sites. While proposed rules have
been published in the Federal Registerlll3, the final explication of those rules has
not been established.
5. Although Medicare Part A direct GME payments pay for time spent by
residents in outpatient sites, there is no requirement that these payments actually
20~
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be allocated to support the teaching costs of those practices. Thus, faculty may
report time spent in graduate medical education and the hospital may be paid for
their efforts, but the hospital need not channel these funds directly into the
teaching program.
6. Medicare Part A indirect medical education adjustment payments exclude
the time spent by residents in outpatient sites other than hospital clinics from
their calculations.
7. Most state Medicaid programs and private payers do not recognize
teaching as a reimbursable cost in the outpatient setting.
Faculty compensation
1. Outpatient payment for physician services is generally less than
inpatient payments, allowing less for the support of residency programs. Medicare
Part B reimburses 80% of an allowable physician charge for outpatient visits, and
the customary charge for hospital-based teaching practices is set at 85% of the
prevailing rate (in part to avoid it being even lower because of the lower profile of
charges often rendered to the low-income clientele of these clinics). The
population served by most teaching clinics is generally poor, resulting in low
collection rates, and preventive services (almost all of which are outpatient) are
infrequently covered by third party payersi4. For these reasons, outpatient sites
are less able to support supervisory and other faculty costs.
2. Outpatient teaching is generally more facul~-intensive than inpatient
teaching. Fewer residents and students can be involved in an ambulatory visit,
and faculty must be present for the entire period of care. Patient visits are also
longer, on average, in a residency practice, but are reimbursed under Medicare
Part B and other payers at best as if in a private practice setting7. The fee
differentials between evaluation/mana~ement ("cognitive") and procedural services
~. ~. . ~. . ~.
compound the problem. Adoption ot a Resource based Relative Value Scale may
partially compensate for this differential if it redresses the perceived inequity in
payment levels for evaluation/management and procedural services.
· ~
Be Faculty billing for outpatient visits may be paid at a rate that may
provide more net income for hospital-based clinics than for non-hospital-based
clinics (this results, in part, from the way in which payers assume overhead is
paid by the hospital and thus pay a fee corrected for what overhead is assumed to
have been). This formula may provide a disincentive to the development of
community-based practices for resident training.
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4. Primary care faculty may have a disproportionately difficult time
developing their own teaching and research skills since they are often required to
spend a large proportion of their time in patient care to generate practice income.
Development of teaching and research skills is particularly needed at this time to
improve the quality and efficiency of primary care residency programs. In
addition, primaly care research tends to be poorly funded by federal agencies, thus
making it more difficult for these faculty to gain support for their academic
activities and to progress in academic careers.
5. Faculty time is reimbursable as supervisory time under Medicare Part A
direct GME payments only if faculty are salaried employees of or have a written
work agreement with the hospital. The fear of double dipping by faculty, that is
billing under Part B while being reimbursed for time spent under Part A, has led
to restrictive rules on faculty's ability to bill for services rendered by residents
they are supervising. This presents a potential problem for reimbursement of
clinic services under Part B. for the employment of part-time faculty, and for the
partial compensation of voluntary teachersi5.
General Concerns
1. Medicare Part A indirect medical education adjustments are based on an
estimate that was doubled in the establishment of the Prospective Payment
System to cover increased costs associated with case mix and market factors).
This may cause an inequitable distribution of payments: hospitals with larger
programs may be reimbursed relatively more since their increased costs of clinical
care can be spread over more residents, though their costs may not be
proportionately higher. The recent introduction of a declining rate of indirect
adjustments addresses this issue, although the decrease in payment per resident is
relatively small. On the other hand, if the indirect costs of medical education are
disproportionately higher with larger programs (which tend to be located in major
medical centers), smaller programs might benefit. Whether this relatively fixed
rate of indirect payment per resident helps or hinders primary care programs is
not known.
2. Support through Title VIT of the Public Health Service Act (for training
grants administered by the Bureau of Health Professions) is small and suffers
from year to year uncertainty. It also requires that at least 25% of a resident's
time be spent in a continuity setting, which many programs find difficult to
accomplish and unduly restrictive on their curriculums. The requirement that
residents spend at least 25% of their time in a continuity practice has limited the
203
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ability of programs to experiment and to utilize other ambulator care sites than
continuity settings, such as specialty clinics and practices, home care, geriatric
practices, and occupational health.
3. Internal Medicine and Pediatrics receive little state support. Family
Medicine and Pediatrics receive little VA support.
4. The proportion of GME financing paid by HMO's and PPO's, which is
unknown, may actually decline, as these managed care systems negotiate for
smaller payments or switch to nonteaching hospitalst6.
Criteria For Evaluating Alternative Proposals
Any proposal for altering the current mechanism of financing GME with
the purpose of improving primary care training should be judged from at least
four viewpoints. As discussed here, these include 1) financial implications; 2)
administrative requirements; 3) educational impact; and 4) views of interested
stakeholders. (Table 1) Although we discuss these criteria individually, we
recognize that to use them to evaluate any proposal, the complexity of the
interrelationships between the criteria must be considered. Simply adding up a
score of how well any one proposal meets the individual criteria may oversimplify
its relative advantages or disadvantages. We do not expect any one proposal to
satisfy all criteria, but by judging all proposals against the same criteria, we may
find certain alternatives that make more sense than others.
Financial Criteria
1. The proposal should be budget neutral, at least in terms of the
federal budget.
During a time of fiscal constraint for the U.S. government, it would be
politically infeasible to raise total federal spending for GME substantially.
Therefore, increases in funding for primary care graduate medical education would
be likely to require decreases in funding in other federal expenditures, not
necessarily but probably in other expenditures related to GME.
The ideal of social budget neutrality also suggests that a reduction in other
outlays will probably be required to identify additional funds for primary care
education. It is likely that these reductions will be in the health care sector.
While these reductions may occur in the funds available for hospital or physician
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payment, they could also imply reduced profits or surpluses for third party payers
or managed care systems, decreased state expenditures in other areas, lower
salaries for residents or faculty, or decreased funds available for medical
care services. Politically more difficult, but certainly possible, would be increased
health insurance premiums, surcharges, or higher taxes.
2. AU those who benefits from GME In pr~marSr care should contribute
to paying its costs.
All of those entities which benefit from quality education of primary care
physicians should contribute to its costs. These entitites include hospitals,
patients, health maintenance organizations, physicians themselves, payers (e.g.,
HCFA, insurance companies), and society as a whole.
3. Funding should be preclictable.
The financing of GME should not vary widely from year to year to such an
extent that programs cannot plan for several years in advance. Program directors
need to be exempt from year to year uncertainty in funding in order to develop
stable, high quality residencies. Policy makers, in both professional and legislative
organizations, also need time for continued development of financial policy and
structures.
4. Funding should be sufficient.
The support of GME in primary care should be enough to cover all reasonable
costs. The definitions of "sufficient" and "reasonable" are clearly important. They
would include clear delineation of what appropriate costs of residencies are, and
should attempt to adjust those costs for inflation. The definition of "sufficient"
should include some mechanism for adjusting to the shifting nature of GME.
Curricula for primary care residencies will change, of necessity, and funding
should be flexible enough both to adapt to those changes and to allow the
decisions for curricular change to remain in the hands of qualified educators. The
percentage of residents' time spent in an ambulatory setting is expected to
increase in the next few years and "sufficient" funding options should be able to
cover the cost of that increase. Another component of this criterion is a decision
regarding the number of doctors this funding should support. For example,
"sufficient" funding may be limited to that of all graduates of American medical
schools, to all teaching hospital positions, or to all graduates who agree to fill
federal health manpower needs.
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Administrative Criteria
1. The implementation of any proposal should be administratively
feasible.
The initiation of any new funding scheme should be simple and not unduly
expensive. If new administrative mechanisms are required, the design and
development of these mechanisms could delay, complicate, or even prevent
effective deployment of the funds to support primary care education.
2. The ongoing administration of any new funding scheme should be
simple.
Ideally, present administrative mechanisms should be simplified rather than
made more complex. It is likely that administrative complexity would make the
program difficult to monitor and unwieldy to payers, hospitals, and educators.
3. The ongoing administration of any new funding scheme should be
· e
nexpenslve.
In order to maximize the portion of funds actually available for support of
primary care education, the ongoing administration of the program should be
designed to minimize the bureaucratic overhead required at all levels, from payer
to educator.
Educational Criteria
I. Curmoular autonomy and flexibility should be maintained.
The funding of GME in primary care should provide autonomy for educators
in the choice and implementation of curricula, as well as flexibility for the
development of innovative educational programs.
2. The growth and development of primary care curricular elements
should be fostered.
Change in GME financing should provide incentives for the development and
strengthening of primary care in established programs. This applies not only to
the creation of primary care elements within traditional internal medicine and
pediatric programs, but also to the support of family medicine curricula and
already established programs in primary care internal medicine and pediatrics. In
internal medicine and pediatrics, emphasis should be placed on transforming
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traditional programs to a primary care emphasis rather than adding still more
residency positions in these disciplines.
3. High quality programs in non-p~mary care specialties should not be
adversely affected.
If any change in GME funding results in decreased funding available to non-
primary care specialties, a mechanism should be adopted to prevent across-the-
board-cuts to these programs. The better programs should not lose money, but
marginal programs should be eliminated, especially in those specialties perceived
to have more training positions than necessary for the nation's needs. However,
for specialties now handsomely paid for physician services, loss of GME financing
will probably have less impact on the viability of residency programs.
4. Incentives should favor high-quality primary care programs.
No specific type of program is implied here. Rather, some recognition should
be made of those programs that strive to achieve strong educational goals and are
not simply sources of inexpensive manpower for their teaching hospitals.
Stakeholders' Criteria
Stakeholders are the entities that are most likely to be interested in and/or
affected by change in GME financing. The categories are intended to be generic.
We do not expect to be able to predict the response of any specific individual or
individual organization (with the exception of HCFA) to any one option.
1. Society: U.S. citizens who benefit from an adequate supply of well-trained
physicians, and tax payers whose dollars contribute to the training of physicians.
2. Federal Government: Congress, elected officials, and federal departments
and agencies.
3. Health Care Financing Administration: considered separately because of
its particular interest in and importance to the policies discussed.
4. State Government: state legislatures, elected officials, and agencies.
5. Private Payers: insurance companies, self-insured businesses, health
maintenance organizations (HMOs), preferred provider organizations (PPOs),
individual practice associations (IPAs), and employers who contribute to a health
insurance plan.
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academic unit, increased resident ambulatory time, or for cooperative efforts
between primary care residencies (options II.A - II.H in Table 3). These options
fail in predictability, although this could be offset by setting the term of the
grants as five years or more and by assuring a tapering period at the initiation
and termination of the grant. They would also require significant start-up costs
and a new or expanded administration to review grants, make site visits, dispense
funds, and follow-up on their use. The ongoing costs of administration may also
be significant. While the quality of some programs would certainly improve, not
all primary care programs would receive grants and thus, a greater discrepancy in
quality than currently exists could develop. Depending on the source of funds,
both primary care and non-primary care educators, specialties, and residents may
object to these alternatives. However, a more limited program of competitive
grants, superimposed upon a program of basic payment for all programs, would be
more popular and would likely stimulate improved training in primary care.
The third cluster of spending options appears less feasible. These consist of
those alternatives which Provide a system of incentives for Primary care education
and corresponding disincentives for non-primary care education (options IlI.A-
IlI.H in Table 3~. These fulfill few criteria, have significant administrative
requirements, and would depend entirely on a set of criteria that would need
development. In addition to educators, specialties, and residents (in both primary
care and non-primary care), teaching hospitals could be expected to object to most
of these alternatives as yet another set of regulations with which to comply and a
potential loss of funds for their residencies.
Summary
The growth and development of graduate medical education in primary care
has been hindered by current financing mechanisms. The alternatives discussed in
this paper would attempt to rectify the situation. Criteria by which policy makers
may judge funding alternatives have been proposed. These include financial'
administrative, and educational implications of the options. The views of
interested stakeholders also need to be considered, since many of the options
would affect more than primary care educators and residents. We believe that no
single remedy will be sufficient; instead, several solutions will be needed
simultaneously. Judged against the criteria proposed here, our preferred options
for raising money for primary care graduate medical education are as follows:
0 Adopt a Resource Based Relative Value Scale for payment of physicians
and improve coverage of outpatient services.
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o Include residents' primary/ambulatory care time in the calculation of
resident FTEs for Medicare direct and indirect medical education payment, add
incentives for primary care training in direct payments, and recalibrate payment
per resident to maintain budget neutrality.
0 Increase state support through Medicaid participation in payment for
GME and through grants for primary care education.
O Require participation in payment for GME by other payers, including
HMOs and private insurers, coupled with a surcharge or tax on revenues of non-
teaching hospitals.
O Increase and redistribute Title VIT funding for faculty development,
curriculum design and other innovations. Encourage foundation support for
similar purposes. Faculty development, in particular, should be allowed a separate
funding stream.
0 Experiment with programs to commit residents to future employers, who
in turn would support primary care GME.
O Experiment with a direct medical education subsidy for outpatient
payments to complement payment to hospitals to cover the costs of medical
education. Consider an indirect adjustment to compensate for the higher cost of
practice (e.g., overhead, more severely ill patients) in teaching settings.
The spending options we judge best would involve division of the funds on
a per resident basis to residencies in internal medicine, pediatrics, and family
medicine for the development of primary care curricular elements through faculty
stony site costs, curricular support, academic unit
and primary care cooperative efforts, or to use
as the individual residency chooses. This base funding would be coupled with
competitive grant funding to stimulate innovation and faculty development. In
addition, the appropriate and designated use of Medicare direct payments should
be enforced by HCFA.
support, resident support, ambul"
costs, increased ambulator time,
Recommendations For Further Analysis
1. A sensitivity analysis should be applied to all options to consider how the
effects might change if the definition of primary care is changed to include only
general internal medicine, general pediatrics, and family medicine; or if it were to
be broadened to include geriatrics, occupational medicine, obstetrics-gynecology,
and/or preventive medicine.
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2. A calculation of the amount of funds being discussed in each case is beyond
the scope of this paper. The lOM Committee may want to support a study to
determine these amounts.
3. With most options, a mechanism for preserving quality non-primary care
residencies needs to be adopted.
4. More options for both raising money and for spending for primary care may
need to be considered than are presented here. One means of obtaining the most
relevant options, especially for spending, might be to conduct a survey of primary
care program directors to solicit their opinion on the components of their
programs that are the most difficult to fund.
5. Since few options fulfill all criteria, and few fulfill the criterion that all who
benefit from GME should pay for it, the IOM committee should consider
combinations of two or more compatible options.
6. The criterion of "sufficient" funding needs to be defined. Most, if not all, of
the options proposed may need an adjunct mechanism to fulfill the requirement of
adaptation to the changing nature (and cost) of primary care education.
7. The lOM Committee to Study Strategies for Supporting Graduate Medical
Education in Primary Care should investigate the costs of administering the
current system of GME financing. The present requirement that teaching
hospitals collect time and effort reports from faculty to estimate the cost of GME
is Invalidated, time-consuming, and subject to interpretation and gamine. A more
efficient, equitable system should be feasible.
O
S. Two methods of changing GME financing to benefit primary care training
should be evaluated. The first would involve options that redistribute GME funds
to bolster payment for ambulatory care education, and would thus support not
only primary care programs but all specialty training programs with an important
outpatient component. The second method would seek those options that are
specifically targeted to aid primary care training. If the latter is preferred, the
TOM Committee should evaluate each option for source and expenditure of funds
in light of how well it specifically helps primary care programs.
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Table 1
Criteria for Evaluating Alternative Proposals for GME Financing
Financial
1. The proposal should be neutral for the federal budget.
2. All those who benefit from GME in primary care should contribute to its costs.
3. Funding should be predictable.
4. Funding should be sufficient.
Administrative,
i. Implementation should be feasible.
2. Ongoing administration should be simple.
3. Ongoing administration should be inexpensive.
Educational
1. Curricular autonomy and flexibility should be maintained.
2. Primary care curricular elements should be fostered and developed.
3. High-qualiJGy programs in non-primary care specialties should not be adversely
affected.
4. Incentives should favor high-quality primary care programs.
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Paw 2
Stakebolders
1. Society
2. Federal Oovernment
3. "C~
4. State Covernment
5. Private Piers
6. Teaching hospitals
7. Non-teaching hospitals
O ~ .
O. scions
O. Primal care specialties
10. Non-prima~ care specialties
11. Primp care educators
12. Non-prima~ care educators
13. Primal care residents
14. Non-prim care residents
15. Patients
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Table 2
Alternatives for Sources of Funds
Changes in Existing Medicare GME Pavments
1. Eliminate Part A direct and indirect payments
2. Eliminate Part A direct payments
3. Eliminate Part A indirect payments
4. Reduce Part A direct payments
5. Reduce Part A indirect payments
6. Limit Part A direct and indirect payments to first certification
7. Add incentives and disincentives to Part A direct payments
Increase in Categorical GME funding
S. Increase Medicaid
9. Mandate or encourage payments for GME payments by insurers and HMOs
10. Impose a tax on physician services
If. Impose a tax on non-teaching hospital services
12. Impose a tax on third party payers
13. Impose a surcharge on physician licenses
Increase in Ambulatory Payment
14. Adopt Resource Based Relative Value Scale
15. Extension of outpatient insurance coverage
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Page 2
16. Adopt a Medicare Part B teaching adjustment to ambulatory sites
17. Allow resident billing including cost of supervision
Increase in Grants
18. Foundations
19. Title VI] residency support
20. Title VIT faculty development grants
21. VA support
22. State grant support
Commitment from Future Employer
23. HMO's
24. States
25. HRSA
26. National Health Service Corps
Redistribution of Funds
27. Redistribute Title VIT money
28. Redistribute clinical income within teaching hospitals and faculties
225
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Table 3
Alternatives for Expenditures
I. Divide funds on a per-resident basis
A. Use as each primary care residency chooses
or, targeted for;
Il. Divide funds on the basis of competitive Grants
B. Primary care faculty
C. Primary care residents
D Primary care outpatient siteLs)
ITI. Divide funds on the basis of incentives for
primary care education of residents
E. Primary care curriculum
F. Primary care academic unit
G. Increased ambulatory time for primary
care residents
H. Primary care cooperative efforts
226
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Outs
~ appreciate the contr~ut~ns of James S. E~ricb, Edna P. Scb~, M.D~
and Herald T. Perky M.~.
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229
Representative terms from entire chapter:
care programs
