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Overview: Graduate Medical Education and Health Care Reform
AAMC Reporter, 07/14/09

Harris S - Since its creation in 1965, the Medicare program has helped cover a portion of the costs associated with graduate medical education (GME) and the patient care missions of teaching hospitals. It does so through two discrete payments: direct graduate medical education (DGME) and indirect medical education (IME). DGME payments help fund resident stipends and benefits, as well as other costs directly related to residency training. IME payments help cover the higher patient care costs incurred by teaching hospitals...Several issues remain on the table that could significantly affect funding for GME. For one, the Medicare Payment Advisory Committee (MedPAC), the influential body that advises Congress on Medicare issues, has recommended a decrease in GME spending. On Jan. 6, during a MedPAC meeting to discuss Medicare payment updates, the commission voted to recommend reducing the indirect medical education (IME) payments by 18 percent. MedPAC sees it as a way to reduce Medicare spending; teaching hospitals say it could significantly affect their ability to balance patient care with educating doctors. According to AAMC estimates, an 18 percent cut would mean $1.1 billion less in IME payments for teaching hospitals, and $214 million less for teaching hospitals in the state of New York alone. Given that the current administration is looking to overhaul the nation's health care system, there is little doubt that GME itself may also become the subject of intense discussions.