Despite the well-established fact of the growing physician shortage, the training pipeline for new physicians remains constrained by outdated funding structures.
Demand for physicians continues to rise, particularly in primary care and rural communities, but many health systems say the capacity to train residents has not kept pace.
According to Justin Frederick, MD, chief medical officer of graduate medical education at Renton, Wash.-based Providence, one of the most significant bottlenecks in physician training today stems from federal funding caps on residency positions first set by the Balanced Budget Act of 1997. Although Congress has modestly expanded funding for new residency slots in recent years, he said the gap between the cost of training residents and the reimbursement hospitals receive remains substantial.
Dr. Frederick joined Becker’s to discuss the policy changes he believes could help address the training bottleneck and offset the nation’s workforce problem.
Editor’s note: This interview was edited lightly for clarity and flow.
Question: From your vantage point, what would you say are the biggest bottlenecks in graduate medical education in the U.S. right now?
Dr. Justin Frederick: I thought about this question from the lens of our healthcare system, as well as nationally, speaking with colleagues and others. The largest hurdle within GME right now, I think, is the federal funding caps on residency positions. Those caps were established with the Balanced Budget Act in 1997 and were based on residency slots from 1996 — that was 30 years ago.
They’ve only been revisited through the Consolidated Appropriations Acts of 2021 and 2023, and we’re very grateful that the government saw fit, through Sections 126 and 4122, to allow for increased funding of about 1,200 slots. At Providence, we took advantage of those opportunities. Yet there remains a significant gap between the cost to train residents and the reimbursement for residents. Addressing that gap is going to be critical for the future.
Q: What policy change would you most like to see to address that gap?
JF: That’s a great question. One thing I’ve seen work very well is the Teaching Health Center GME program, funded through HRSA on annual appropriations. We were fortunate to receive a four-year extension of our Teaching Health Center grant.
The reason I think this model is so effective is that it sets a per-resident amount that isn’t dependent on DRGs [diagnosis-related groups] or inpatient-to-resident ratios, and the funding doesn’t flow through acute care facilities. It also allows us to embed residents directly in the communities they serve. We have family medicine, internal medicine and psychiatry residents truly embedded in these communities.
That has done an incredible job of giving them opportunities to serve vulnerable populations, build relationships and address the maldistribution of specialties in rural and underserved areas.