Super Committee and GME funding
By Michael Halasy
Super Committee and GME funding
SO, about that super committee. Surely you remember, the gang of 12 that was created by the showdown over the debt ceiling this summer. Well, they’re hard at work but among the proposals out there, is one that is causing some grave concerns.
As a health workforce researcher, I understand implicitly the difficulties that lie ahead and the underlying shortage of physicians that will worsen dramatically by 2025. Current estimates suggest a shortage of over a 130,000 physicians by that time. Many, if not most, do not realize that physician training, at least the post graduate residency phase, is paid for by CMS (Center for Medicare Services).
Currently, as we all know, if the super committee does nothing, there will be an across the board 2% cut to all federal discretionary spending. Some of the other proposals are a little more concerning. In 2010, direct GME expenses totaled 9.5 billion. IME or Indirect Medical Education expenses totaled an additional 6 billion.
IME represents an additional 5.5 % payment to teaching hospitals, as it is understood that they not only teach other health professionals, but that there may be extra costs associated with education. Current proposals are to cut that rate in half (first proposed by Simpson-Bowles) to 2.2%. Among other proposals which include Home Health Co-Pays, SNF (skilled nursing facility) shared payments, raising Medicare eligibility to the age of 67, lies a proposal by the House Ways and Means Committee to cut GME funding by 15 billion over the next ten years, or a 15.7% cut. It is unknown at this time if the Committee will pursue this, but this is problematic.
Adding to the problem is the current GME Cap placed in effect in 1997, when several organizations were predicting an oversupply of physicians. This is not our current concern. This cap is problematic, and with the current budgetary concerns has no chance of changing. By 2015, we will have had over a 30% increase in medical school graduates from 2000. There is significant concern that also by 2015, we will not have enough GME residency slots for all US graduates, without even mentioning the several thousand US citizens who go to foreign medical schools every year.
States have already reduced the amount of money in the GME system, with only 41 states participating, and contributing a little over 3 billion annually. Nine additional states are now likely to opt out as well.
We need a serious look at discretionary spending, but this will only compound and weaken an already distressed healthcare system. I hope that the Super Committee strongly considers this, and looks to other alternatives.
American doctors are significantly overpaid when compared to foreign doctors and American professionals with comparible degrees (law, science, business, professors, etc). Yes, this holds true after you account for the loans. This is almost certainly due to the gating of the production of new doctors by the medical schools and residencies.
Americans do not use medical services more than residents of other rich nations. Rather, we just pay more for every part of the process, including the doctors, nurses, and techs. Yes, we need to produce more doctors – lots of them – and drive wages back down until they are comparible internationally and vs other high-end professions.
But then there is the baby-boomer generation reaching an age when they will need more medical care. So increasing demand, decreasing supply yields (economics 101) increasing prices and higher future costs. So how is saving now and spending later going to balance our long term budget.
rdan,
The US war machine is spending $7800B in the years the commission are pondering.
In the pst week a friend sent me information on the DoD terminating a radio after squandering nwearly $16B.
If the US wasted a thrid of what it does on war it would spend far more than the next big spender in the world our long ally the Brits.
But, limited supply of MD’s is an excuse why the US cannot hold on to health delivery.
occupy wall st!
In response to Chad Brick –
None of the other professions you listed go through the years of rigorous training that physcians endure.
For example a cardiothoracic surgeron goes through 8-10 years of POST-graduate training. That means that while your lawyers, businessmen and scientists are collecting big paychecks, these physicians are spending almost an entire decade working long hours for minimum pay. Some md-fellowships don’t even pay the physicians at all. Now after this physician has gone through 12-14 years of training from med school to fellowship, they are now expertly trained and are comensated appropriately.
Lets compare this physician (10 years) post medical school graduation to a lawyer 10 years post graduation. The lawyer likely has been making over six figures since graduation. If they are any good, they are now likely making over 200k and nearing making partner. You want to tell me that the surgeon that will make 300k for his first year of real work is grossly overpaid? Not to mention, insurance premiums and taxes cut out a signifiant chunk of that number.
You seem to think every healthcare professional is overpaid. Significantly cutting these salaries is not a viable option to fix any of our problems. It would drive good doctors away from practice and increase the gigantic physician shortage that is already upon us. Cutting GME funding will only make this problem signficantly worse.
As ilsm said, the percent of GME education vs. defense spending over the proposed time period is laughable. What is more important to the wellfare of our nation? Having competent doctors they Americans have easy access to or the billions of wasteful dollars spent on developing unnecessary defense tech and maintaining never ending wars?