Are hospitals wasting GME money?

The federal government pays $15 billion a year for the training of medical residents--an expenditure that may be largely unnecessary, according to the International Business Times.

Hospitals actually benefit greatly from the medical students and residents who rotate through their facilities, and they are not actually a drain on their resources, the newspaper reported. 

To illustrate its point, the newspaper cited Keith Chan, M.D., who is currently in his fifth year of residency as a radiologist. His daily duties are similar to those of a practicing radiologist but he receives a fifth of the salary. In addition, Chan served as the only night shift radiologist on duty at the University of Washington Medical Center and Harborview Medical Center in Seattle.

Most residency payments are made in lump sums, with no accountability as to how the money is spent, according to the Times. The Cleveland Clinic is paid about $119,000 per year per resident, and pays each of them about $50,000 annually. At the same time, many residents often have trouble finding slots.

"There's no indication that anyone other than the residents bear the cost of their training," former Centers for Medicare & Medicaid Services Chief Gail Wilensky told the Times. "When we've seen significant changes in (graduate medical education) funding, the programs continue and they continue to grow because there are many benefits to the hospital, including prestige, which can allow them to increase the billing rate that they negotiate with third-party payers as a result of being a teaching hospital."

However, the current payment structure is staunchly defended by hospitals and healthcare lobbies, the American Hospital Association and the Association of American Medical Colleges specifically, according to the Times. And to date, there has been no actual evidence that hospitals profit directly from GME funding, which comes primarily from the Medicare program. But the Institute of Medicine issued a report last year concluding that the federal government overhaul how the GME program is operated in the U.S.

A recent article in the journal Health Affairs suggested that the role played by the Council on Graduate Medical Education be expanded to deal with GME issues moving forward.

To learn more:
- read the International Business Times article 
- check out the Health Affairs article