Plug the Leak: Align Public Spending With Public Need

As the authors pondered the massive deposition of crude oil after the 2010 Gulf of Mexico oil spill, we began to note similarities between that disastrous event and the poorly organized, yet extraordinarily expensive, investment taxpayers make each year to support graduate medical education (GME). The passage of the Patient Protection and Affordable Care Act now offers the opportunity for health care provision to nearly all Americans. Together, the Centers for Medicare and Medicaid Services (CMS), along with the US Department of Veterans Affairs (VA), spend nearly $10.5 billion annually to train doctors in disciplines that medical school graduates themselves are free to choose.1 Yet, despite these billions of dollars poured into GME by the federal government, it has been projected that the emerging physician workforce will not come close to meeting the needs of the additional number of US citizens who will soon become eligible to access health care.2 One reason is that physicians are increasingly electing to train in non–primary care specialties. According to the National Resident Matching Program data, there has been a steady decline between 1998 and 2009 in the number of US medical school graduates pursuing primary care residencies, particularly family medicine, in favor of training in medical specialties.3,4 The consequent spill of specialists into the market actually drives the cost of care increasingly higher.5 This contributes to an expenditure currently accounting for approximately 17.5% of the US gross domestic product, and further growth is unsustainable.6 

In this article, we explore the history behind the current structure of GME funding and the many problems with continuing along the current funding path, and we offer suggestions for change that could potentially manage this health care spill.

It was after World War II when the government first took responsibility for financing the training of physicians. Young doctors, whose career paths often had been derailed to support the war effort, became eligible for federal dollars to continue their training. The support of GME by the government later became part of the initial Medicare legislation and continues to this day.7 However, federal GME funding is no longer linked to prior public service. Rather, it has become principally a means to fulfill the career aspirations of new doctors and the resource needs of individual hospitals and health care systems. The Balanced Budget Act of 1997, intended to help contain federal spending on GME, capped the number of training positions that CMS would reimburse. Initial concern that the number of available GME training positions would be curtailed by institution of the cap has not been borne out. The number of GME positions continues to grow.8 The financial resources for that growth have come almost entirely through expenditure of public funds by the federal government and only to a very limited extent through investment of private money by health care delivery systems.9,10 

Currently, federal funds for GME are provided to hospitals and other health care delivery systems without any regulatory control over workforce output. Health care systems are free to determine the distribution of federal funds within their training programs based on what is most favorable to the fiscal and workforce needs of those institutions. Not surprisingly, this unregulated market rewards an entrepreneurial approach to physician training, disproportionately growing the more profitable specialty programs.5 This abundance of specialty GME positions has created an environment in which the workforce is flooded annually with specialists, whose high supply drives up demand for their services,5 and in turn leads to increased health care costs.

Newly minted physicians are not immune to these free market forces. Each year, US medical school graduates enter environments in which the cards are increasingly stacked against a decision to become a primary care physician. While making career choices can be complex, young physicians give numerous reasons for selecting careers that are not in primary care.11,12 Specialists are perceived as having better pay, higher stature, and greater independence compared with primary care physicians, who are perceived as being underpaid, undervalued, and lacking control over their practice environments.13,14 Internal medicine, which had traditionally placed approximately half of its residency graduates into primary care, now reports only between 20% and 25% entering the generalist specialty.15 A similar trend can be seen in pediatrics.16 The cumulative result is that the abundant supply of specialist physicians streaming from government-funded training programs is mismatched with the dwindling supply of doctors entering primary care specialties.5 

If we accept that the status quo is both undesirable and unsustainable, how do we derive new models to manage this resource leak? First, we must acknowledge that we may not be able to comprehensively foresee or agree upon what the future systems of health care delivery should look like. The patient-centered medical home, interprofessional team-based practice, and coordinated care organizations have all been suggested.17 However, the basic questions of who will deliver care, what infrastructure will support it, and whether the system will be managed at a federal, state, or regional level remain unanswered. Despite this inherent uncertainty, we have a 2-year deadline before the health care system will be inundated with 32 million or more newly insured.18 We cannot afford to wait for all of the answers before beginning the transition to the next model (or models) of care delivery.

We believe this problem should be addressed in two ways: by aligning federal GME funding so that we are graduating a physician workforce that meets the future needs of the populace, and by requiring compulsory service by newly trained physicians in primary care settings.

In the United States, the only effective means of centrally guiding the composition of the physician workforce is through leveraging CMS funding of residency training programs.19 It is time the nation begins to align federal funding for graduate medical training with the projected needs of society. But what is the best model? Evidence suggests that more primary and preventive care would result in improved outcomes, increased efficiency, and decreased cost of community health systems.19 However, the mantra of “more primary care, fewer specialists” may be too simplistic. A well-designed delivery system will need both.

We know that the ideal primary care panel size varies depending on age and medical complexity of the patients within that panel. For younger populations with relatively few medical problems, a busy primary care physician would be expected to follow about 2500 patients, whereas older patients with greater medical complexity would limit that ideal number to 2000.20 Given an anticipated 32 million newly insured patients on the horizon, all of whom will require access to primary care, we can reasonably project an estimated deficit of between 12 800 and 16 000 primary care providers in 2014. This will add to the current critical shortage of accessible primary providers. At present, only 66% of adults under age 65 have access to primary care.19 

Once the most desirable mix of primary and specialty providers is determined, achieving it will require a transformational change in the way GME is funded. The authors believe that a significant redistribution of CMS dollars is the best way to support this new model. That is, federal control will mandate the conversion of some subspecialty residency positions to shortage specialty positions. Advanced practice professionals (nurse practitioners, physician assistants, and other nonphysician providers) could also serve some of the same roles as physicians in a newly designed primary care workforce.

A strategically designed mandatory public health service could serve as another model for a new health care delivery system to provide the primary care needs of the community. Strong precedent already exists in this country for providing federal financial incentives to new health care graduates to perform medical service in the public good, for example, the Public Health and Indian Health Services, the VA Health System's Educational Debt Repayment Program, and the Uniformed Health Services.21–24 However, the United States currently lacks the centralized authority to mandate that new medical graduates serve in these public programs. Models for such a social design of health care delivery have existed in countries outside the United States since the early 20th century. As of 2010, as many as 70 countries had adopted policies requiring physicians to provide compulsory health care in rural and underserved areas. Newly graduated trainees in regions of Japan are required to provide 1 year of rural health service for each year of support received during medical training. In Ecuador and South Africa, physicians are granted a private practice license only after a period of compulsory service. Several countries, including Venezuela, Malaysia, and Mexico, require physicians to work for 1 year without any link to financial support, licensure, or other incentives. Compulsory medical service has been shown to have both immediate and lasting impacts on health care provision. In Norway, an estimated 20% of physicians assigned to rural health service stay in rural areas after their required service has been completed. In South Africa, compulsory service in underserved areas has improved staffing and decreased patient waiting times.25 Requiring public service of US residency graduates in exchange for funding GME training programs would tap into a vast workforce resource, and would return to the original post–World War II intent of linking service with governmental support.

We must develop a workforce policy that supports training the right mix of primary care and specialist physicians to meet the current and projected health care needs of the population. Experimentation, practice, and observation will allow us to identify novel strategies for the most efficient and highest quality care. However, the time to act is now. To delay will mean that the most extraordinary health care legislative accomplishment of the century will not have the underpinnings to become reality. Legislators have an obligation to allocate public treasures for the greater good. Ultimately, our national leaders must plug the chronic leak of dollars into medical specialties the United States does not need and that continue to add to the cost of health care.