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IOM Urges New System to Fund Medical Education

IOM Urges New System to Fund Medical Education

WASHINGTON-- The federal government should revise its system for funding the training of physicians, to help cut costs and adapt to ongoing changes in health care delivery, says a report from the Institute of Medicine (IOM) at the National Academy of Sciences.

An 11-member IOM panel chaired by Rosemary A. Stevens, PhD, of the University of Pennsylvania, also urged broadening the kinds of institutions eligible for federal support, making funding more equitable to all teaching hospitals, and reducing the incentives for some hospitals to add more residents than they need.

Given the demands to control health care costs, Congress should set specific spending levels for graduate medical education each year, the report said. It noted that Medicare spent in excess of $6 billion to help pay the costs of training more than 100,000 physicians and other health care professionals in fiscal 1996.

A considerable disparity exists in residency funding, with some teaching hospitals receiving 10 times as much as others, the panel emphasized, and this influences graduate medical education.

"Hospitals that are reimbursed $240,000 per year per resident have a terrific incentive to add more residents, compared with those institutions that only receive $24,000," said Dr. Stevens, professor of history and sociology of science. "We need to create a better way of controlling total costs and distributing funds so that hospitals train doctors in the best possible way in fields where they are truly needed."

The IOM panel suggested direct medical education funds should go to institutions other than teaching hospitals if they meet accreditation standards. These include ambulatory health centers, managed care organizations, and specialty centers such as children's hospitals. Graduate nursing education should receive support according to the same principles that apply to physicians, the report said.

The panel also called for reforming Medicare's system for indirect support for medical education, which currently involves extra reimbursement to teaching hospitals that treat Medicare patients.

Noting that the increasing enrollment of Medicare beneficiaries into HMOs is draining away patients once treated in teaching institutions, the IOM committee suggested creating a new trust fund. It would provide a defined level of funding, based in part on an institution's historical commitment to serving Medicare recipients rather than solely on the present levels of care.

The panel said its recommendations, if instituted, would offer policy makers more flexibility in dealing with the special needs of all types of health care institutions.

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