The Affordable Care Act: Oversight on Providing for Graduate Medical Education


For more than 50 years, the federal government has accepted the responsibility for financial support of graduate medical education. Legislation passed during the 1960s – beginning with the term of President John F. Kennedy and included in President Lyndon Johnson’s Medicare legislation in 1965 – provided funding for direct medical education and indirect medical education.

Although funding continued to be supported during the 1970s and 1980s, in 1997 the federal government capped Medicare’s support of graduate medical education at approximately 15,000 GME positions, which is about a third of the increases seen during the 1970s and 1980s. Growth in undergraduate medical education is occurring to address the overall physician shortage, with 138 new or expanded schools. However, new GME positions are needed to complete the requirement that all licensed physicians in the United States must have some GME. The Medicare budget needs to be increased to accommodate about 10,000 new first-year residency positions.

Currently the United States ranks 24th in the Organization for Economic Cooperation and Development with a ratio of 243 physician positions per 100,000 population. The appropriate ratio of surgeons to population is usually assumed to be 4-6 per 100,000 – a number that is now at approximately 5/100,000 and less than 3/100,000 in parts of the United States. Those ratios are obviously a generalization and they don’t address the service provided. Moreover, maldistribution of generalists and specialists exists, notably in rural America.

The Affordable Care Act (ACA) was analyzed by John K. Iglehart, who noted that “the law takes only modest steps to expand the workforce which is already stretched in some geographic areas and in some specialties” (N. Engl. J. Med. 2011;365:1340-5).There has been some modest expansion through nonfederal financial sources. As Iglehart notes, the vast expansion of coverage called for in the ACA will require more physicians and other health care providers. Currently the number of GME positions is capped by the Balanced Budget Act of 1997, precluding expansion in Medicare’s GME support.

The role of the federal and state government in shaping the workforce by financing GME needs to be addressed. As has been suggested in the past, an all-payor system would be optimal, so that the burden of GME support of the more than $9 billion annually could be spread among all insurers, including Medicare.

The Bowles-Simpson budget plan, issued by Sen. Erskine Bowles and Sen. Alan Simpson in December 2010 as co-chairs of President Obama’s National Commission on Fiscal Responsibility and Reform, included a five-step program:

1. Decrease spending on discretionary issues.

2. Increase taxes to $100 billion.

3. Control health care costs and develop an Independent Payment Advisory Board.

4. Reduce entitlements.

5. Reform Social Security.

Many of the proposed cuts in Medicare targeted the $9 billion spent annually on GME. While the commission’s work has not been implemented, it remains a likely framework for eventual Medicare payment reform.

To the degree that the government is supportive of GME, it is supportive of primary care. While no one would deny the importance of primary care, 21st-century health care requires the availability of the skill sets of all 24 American Board of Medical Specialties. Modern health care is patient-focused and team-centric. While primary care was defined in 1992 as a service and not a specialty, it is usually associated with internal medicine, family medicine, and pediatrics.

Recently, there has been a growing awareness across the country that a shortage of general surgeons and surgical specialties exists. The population has grown by 15 million each decade since 1980, but the number of general surgeons certified each year remains relatively constant at 1,000 a year. In 1981 the American Board of Surgery certified 1,047 surgeons; in 2009, 909. Shortages in other surgical specialties are rapidly evolving as well.

Federal funding needs to be available for all core specialties. Moreover, government programs such as the National Health Service Corps – now available only to primary care fields, dentists, nurse-practitioners and midwives – needs to be made available to all specialties willing to provide 2 years of public service.

The U.S. Public Health Service Commissioned Corps presents a potential opportunity to address geographic maldistribution of physicians and surgeons (JAMA 2010;303:2080-1). Founded in 1798, the Commissioned Corps is the oldest uniformed service, and has expanded its physician personnel from 6,600 to 10,000. The Commissioned Corps has a variety of epidemiological and related responsibilities, and provides direct patient care to populations such as inmates of federal prisons and the Indian Health Service. It also serves as the medical corps of the U.S. Coast Guard and is the uniformed service led by the U.S. Surgeon General.

The U.S. Coast Guard is a first responder to many disasters such as Hurricane Katrina and the earthquake in Haiti, and the Commissioned Corps could provide health services as part of the response. The Coast Guard is part of the Department of Homeland Security, and the Disaster Medical Assistance Teams function as first responders. It would be possible for the Commissioned Corps to fill provider roles in places where no infrastructure exists, such as in Haiti. It could also be deployed into the Health Professional Shortages Areas. Considering that a 2-year commitment to serve would allow for loan forgiveness, it seems such an organizational change would benefit many individuals.

The federal government assumed a covenant with GME in the passage of Medicare in 1965. Under today’s budget constraints, it is reasonable to develop an all-payor system. It is also a useful and a relatively modest expense to expand the National Health Service Corps and the U.S. Public Health Service Commissioned Corps to provide health care to underserved populations and regions.

Dr. Sheldon is Past President of the American College of Surgeons.


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