The Impact of Health Care Economics on Surgical Education

Abstract

Just like the world economy in 2012, health care is in a state of flux. The current economic environment will impact not only current colorectal surgery residents, but also future generations of surgical trainees. To understand the economic impact of the current health care environment on colorectal surgery residencies, we need to know the basics of graduate medical education (GME) funding for all residents. Since the 1960s with the initiation of Medicare, the federal government through the Center for Medicare and Medicaid Services (CMS) has been the largest source of GME funding. There are two types of costs associated with GME. Direct GME (DME) funding covers costs directly attributed to the training of residents. These costs include residents' stipends, salaries, and benefits; cost of supervising faculty; direct program administration costs; overhead; and malpractice coverage. Indirect GME (IME) costs are payments to hospitals as an additional or add-on payment for the increased cost of care that is generally found in teaching hospitals. In 2010, President Barak Obama signed into law H.R. 3200, the Patient Protection and Affordable Care Act (PPACA). In 2011, the Supreme Court held that the majority of the PPACA is constitutional. Although the true impact of this bill is unknown, it will change the formula for Medicare GME reimbursement as well as shift unused residency positions to primary care.

Keywords

graduate medical education - funding - GME costs

• References

• 1 Wagner K, Fischer SA. Financing of graduate medical education. Med Health R I 2011; 94 (6) 161-163
• 2 Medicare Act (H.R 1nd S.R1). 1965
• 3 Blount LL, Waters JM, Gold RS. Methods of insurance reimbursement. In: Blount LL, Waters JM, , eds. Mastering the Reimbursement Process. Chicago, IL: AMA Press; 2001: 6-7
• 4 Medpac. Graduate Medical Education Financing: Focusing on Educational Priorities. Report to the Congress: Aligning Incentives in Medicare June 2010. Available at: http://www.medpac.gov/chapters/Jun10_Ch04.pdf . Accessed December 15, 2011
• 5 H.R. 2015–Balanced Budget Act of 1997 (Enrolled Bill [Final as Passed Both House and Senate] - ENR). Available at: http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.2015.ENR . Accessed November 27, 2011
• 6 Williams Jr TE, Satiani B, Thomas A, Ellison EC. The impending shortage and the estimated cost of training the future surgical workforce. Ann Surg 2009; 250 (4) 590-597
• 7 Steinmann AF. Threats to graduate medical education funding and the need for a rational approach: a statement from the alliance for academic internal medicine. Ann Intern Med 2011; 155 (7) 461-464
• 8 Fetter RB, Thompson JD, Mills RE. A system for cost and reimbursement control in hospitals. Yale J Biol Med 1976; 49 (2) 123-136
• 9 Centers for Medicare and Medicaid Services. Acute inpatient PPS. Available at: http://www.cms.gov/AcuteInpatientPPS/07_ime.asp#TopOfPage . Accessed November 27, 2011
• 10 Medpac. Graduate medical education financing: focusing on educational priorities. Available at: http://www.medpac.gov/chapters/Jun10_Ch04.pdf . Accessed December 5, 2011
• 11 Iglehart JK. Health reform, primary care, and graduate medical education. N Engl J Med 2010; 363 (6) 584-590
• 12 H.R. 3590–Patient Protection and Affordable Care Act (Amendment in Senate - AS) Available at: http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.3590.as . Accessed December 15, 2011
• 13 Association of American Medical Colleges. CMS releases final rule implementing GME redistribution and 2011 outpatient payment changes. Available at: http://www.aamc.org/advocacy/washhigh/highlights2010/160232/110510_cms_releases_final_rule_implementing_gme_redistribution.html . Accessed December 20, 2011
• 14 Centers for Medicare and Medicaid Services. Acute inpatient PPS. Available at: http://www.cms.gov/AcuteinpatientPPS/06_dgme.asp . Accessed December 10, 2010
• 15 Iglehart JK. Health reform, primary care, and graduate medical education. N Engl J Med 2010; 363 (6) 584-590
• 16 Slavin PL. Commentary: health care reform and the finances of academic medical centers. Acad Med 2011; 86 (9) 1076-1078