ABSTRACT
Graduate Medical Education (GME) payments through the Health Care Financing Administration (HCFA) represent the largest portion of federal funding in direct support of training for health professionals. Whatever the benefits of these funds, they clearly have not served as a positive factor in addressing the emerging shortfall of generalist physicians. Therefore, a variety of options are being discussed for restructuring the incentives associated with HCFA GME funds. Seven principal alternatives that have been proposed to address these problems are the following: modification of hospital GME payments, GME payments to medical schools, GME payments to residency programs, GME transfers through Medicare part B, GME transfers to the Health Resources and Service Administration, GME transfers to states through block grants, and GME payments to academic consortia. Unfortunately, each of these approaches offers substantial disadvantages and faces important opposing constituencies. To address these weaknesses, combined strategies and "all payor" federal mechanisms of GME financing have recently been proposed. These compromise approaches have their own administrative and political liabilities as well. Revisions in current HCFA GME payments may be preferable as a first step, but more comprehensive approaches involving all payor financing with mechanisms that reconnect medical school training with primary care practice will likely be required to ensure efficient and effective reform. Such major shifts in the federal funding of GME will not be quick in coming, however, and will doubtless be characterized by a compromise of policy effectiveness with political feasibility.
