For those of you interested in graduate medical education (residency training) the news that how we pay for our trainees affects what they do for the rest of their life is not new. It may come as a surprise that we have been engaged in a broad-based discussion regarding the nature of payment for training and how that relates to who sets rules for training. This discussion is not a transparent policy discussion such as was the recent one on health insurance reform (despite the term “death panel” now being used as a verb). It is a much more subtle discussion between the Academic Health Centers (the folks who employ the medical school graduates for their first couple of years after graduation), the AAMC (the association of medical schools), the ACGME (the body who sets the rules for training after medical school), and CMS (the folks who pay for employment of RESIDENTS but not for training of MEDICAL STUDENTS.

To oversimplify, the medical schools take tuition from students. They are producing undifferentiated graduates to enter into the practice of medicine AFTER finishing a residency. Although some schools (mostly those funded by state legislatures) have the local health manpower needs as part of the mission, for the most part medical schools see manpower as a policy problem independent of the medical education process. It is their supposition that if the policy conforms with the desired outcomes, the students will follow.

There are 8,734 ACGME-accredited residency programs in 130 specialties and subspecialties. All told, there are many more slots than there are graduating US citizens. Each of these programs requires learners to choose them for training or they will cease to exist. The ACGME can dictate standards for training for each of these specialties based on input from volunteers from within the specialty. The specialties are PRECLUDED from limiting slots because of a Reagan era believe that if we had unlimited specialists prices would fall.

The teaching hospitals train most of our countries health professionals. The care they provide, although essential, is skewed towards high-tech care that requires inexpensive manpower (provided by resident physicians). They require a steady supply of inexpensive labor to continue to provide this high-tech care and in exchange offer resident physicians the opportunity to practice such high-tech care upon graduation. These graduates, though, may not have sufficient patient volume on which to practice the high-tech interventions that they have been trained in. The believe is that these procedures will translate into primary care practice such that upon completion the fully trained physician will practice the type of care needed by America.

The federal government has not had a clear sense of where they fit into the equation. Although they have been paying the salary of medical school graduates in the first several years of training for 40 years, the intent of this payment has become increasingly unclear. As I alluded to, the “market driven” changes of the 1980s led to policies that treated residency training as an educational process. Fueled by a believe in the power of the market, the believe was that learners would choose training activities based on projected need. After 12 years it became clear that this led to an increase in the numbers of non-primary care physicians (see above for reasons). The Clinton administration brought about a change in policy with significant improvement in attention to manpower needs and exerting rationality into the system through changes in policy. These changes were not necessarily welcomed by the medical schools, residencies, or teaching hospitals (see above for reasons). With the change in adminstration the policies changed again. Under GW Bush the regulators who I spoke with had several deeply held beliefs. They believed in the market approach to health care. They believed that the government should not be in the business of training physicians, much less dictating what type of medicine was practiced, and they remained puzzled as to why this approach led to a wasteful, bloated system.

Enter President Obama and the “new law” has ushered in another change in policy. It appears that primary care reimbursement will be improved and the environment will become much more favorable towards primary care. This does not change the training environment. One thing to watch as a potential game changer is the Teaching Health Center. These are enshrined in the “new law.” They are in training environments specific for primary care and the training dollars do not go to the hospital but instead go to primary care practice (usually on FQHC). Many of us are excited about this development. It should allow a decoupling of the training from the manpower needs of the Academic Health Center, an increase ion effective primary care training, and the provision of needed primary care services to a population that will likely remain underserved even as the “new law” goes into effect. Although the devil is in the details, watch this as it develops.