Secondary Logo

Journal Logo

Letters to the Editor

Understanding GME Financing

Grover, Atul MD, PhD

Author Information
doi: 10.1097/ACM.0000000000000014
  • Free

To the Editor:

The recent article by Chen et al1 assigns rankings to teaching hospitals based on the outcomes of their graduate medical education (GME) programs in two specific dimensions: graduates practicing in underserved areas and graduates practicing in high-need specialties, namely primary care. The authors are critical of programs that rank low among producers of graduates practicing in underserved areas and high-need specialties because they argue that programs receiving federal funding should be accountable to the needs of the taxpayers. While producing adequate numbers of primary care physicians is an important goal of our medical education system overall, the authors present incomplete and misleading information about the nature of GME financing that requires clarification.

Specifically, the authors have incorrectly included in the “per resident” amounts of GME funding two separate sources of federal support with distinct and different purposes. The first is direct GME funding from Medicare, which covers approximately 20% of total training costs (including resident stipends, benefits, and faculty time) and is heavily weighted towards the training of primary care physicians. An individual teaching hospital generally receives a per-resident payment for a family medicine trainee that is twice the amount of the direct GME payment for a cardiologist in training. Direct GME support is also tied to the percentage of care delivered to Medicare beneficiaries.

The second type is indirect medical education (IME) payments, which are made on a per-discharge basis—not a per-resident basis. IME payments reflect patient characteristics, not trainee characteristics. According to Congress, these payments are added to Medicare discharges because of the failure of claims data “to account fully for factors such as severity of illness of patients requiring the specialized services and treatment programs provided by teaching institutions.”2,3 Teaching hospitals that provide more complex care—for instance, trauma, burn, transplant—and have higher Medicare patient volumes receive larger aggregate IME payments for that specialized clinical care.

Both direct and indirect GME payments are greatly affected by Medicare patient volume. If Medicare funding were to flow disproportionately to programs based on production of a particular specialty, Medicare dollars currently being used to treat Medicare patients would potentially be shifted to institutions even if they care for few beneficiaries.

Ultimately, the missions of major teaching hospitals are diverse and sometimes focused on particular clinical needs (such as pediatric or cancer care) or training physician–scientists (who are often subspecialists). By focusing on part of only one mission, the authors appear to suggest that high-touch care should be provided at the expense of high-tech care. While a strong primary care system is vital, teaching hospitals must pursue varied missions to meet the evolving health care needs of patients and their communities.

Atul Grover, MD, PhD

Chief public policy officer, Association of American Medical Colleges, Washington, DC; [email protected]


1. Chen C, Petterson S, Phillips RL, Mullan F, Bazemore A, O’Donnell SD. Toward graduate medical education (GME) accountability: Measuring the outcomes of GME institutions. Acad Med. 2013;88:1267–1280
2. . House Ways and Means Committee Rept., No. 98-25 March 4, 1983
3. . Senate Finance Committee Rept, No. 98-23 March 11, 1983
© 2013 by the Association of American Medical Colleges