Press Release

Embargoed Until Contact

August 16, 2012

Sue Ducat
Director of Communications
(301) 841-9962


Graduate Medical Education


Bethesda, MD -- A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation analyzes the debate over financing of graduate medical education (GME). In the United States, approximately 115,000 medical school graduates are being trained each year through residencies at more than 1,000 teaching hospitals--with much of the financial support coming from the Centers for Medicare and Medicaid Services (CMS). The Obama administration and some members of Congress, looking for places to cut in the federal budget, want to reduce GME funding, a move opposed by many medical schools, professional associations, and hospitals, who want to increase that funding to train more doctors.


Topics covered in this policy brief, which provides background on GME funding as well as the arguments on both side of the issue, include:


  • How much does government pay? CMS contributes nearly $10 billion in Medicare funds and $2 billion in Medicaid dollars annually to cover the costs associated with training, plus payments to children's hospitals and a new program to prepare physicians for community-based ambulatory patient care. There are also contributions from several other federal agencies. More than 40 states also pay ($3.78 billion in 2009) to support GME. The brief details the amounts and purpose of governmental payments.

  • What's new: GME and quality improvement. GME subsidies are not tied to evaluations of the quality of training, to how well residents perform in accomplishing their duties, or to any other quality measure. In 2010 the Medicare Payment Advisory Commission recommended creating a performance-based incentive program, which would tie a portion of the GME payments to successful achievement of specific outcomes. More recently, a bill was introduced in the Senate that would allow hospitals to compete for additional GME funding by linking their residency programs to quality and performance goals.

  • What's next? Last year's budget law requires Congress to make major cuts in federal spending by January 1, 2013. In the months ahead, parties with a stake in GME funding can be expected to voice their recommendations to those lawmakers overseeing the budget process. As implementation of the Affordable Care Act continues, and more Americans acquire health insurance, it is likely that more providers will be needed. That prospect worries those who believe that a reduction in GME funding would conflict with efforts to expand the nation's physician supply.
About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.