AHA Policies and Positions

MEDPAC'S GME REPORT

To view the report, visit MedPAC's Web site at http://www.medpac.gov/.

August 5, 1999

BACKGROUND:

In an August 5 report, MedPAC is proposing a significant shift in the way it recognizes and pays for medical education that teaching hospitals provide to seniors and their families. Specifically, MedPAC is proposing to combine direct medical education payments (which recognizes resident salaries and physician supervision costs) with indirect medical education payments (which recognizes additional operating costs incurred in a teaching environment). Currently, the Medicare program pays hospitals for its share of both the direct and indirect costs of training physicians.

TALKING POINTS:

• While we applaud MedPAC's efforts to explore the future of graduate medical education (GME), the AHA is troubled by the commission's recommendation. Failing to recognize the unique role played by Medicare in financing the education and training teaching hospitals provide goes against the very essence of what teaching hospitals are all about: training and patient care research.

• The medical breakthroughs and training of tomorrow's physicians that occur in teaching hospitals benefit everyone, especially seniors. These important activities add significantly to the overall costs in teaching hospitals. We're pleased that MedPAC recognizes these higher costs, but are concerned that this role would no longer be explicitly supported.

• Our view is that these additional costs for education and research should be recognized explicitly and shared by both public and private payers, optimally through an "all-payer" trust fund

• Because Medicare payment policy sets the benchmark for other payers, MedPAC's major change in philosophy on GME support will cause a ripple effect with other public and private payers. In an increasingly competitive market, many private and public payers do not want to recognize or underwrite teaching costs. If the costs of training are lumped in with other costs and not specified as educational costs, it becomes increasingly difficult to move to a system where government and private insurers pay their fair share.

• MedPAC's proposal is just a concept-it cannot be implemented as proposed-- so we'll need additional details to provide a more complete analysis. We look forward to working with MedPAC as they continue to study the important issue of GME.

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