Journal of Medicine - Since the 1960s, Medicare has paid for a substantial portion of medical residency programs. But in 1996, it limited the number of residents that would be funded to that year’s total, preventing any significant expansion of training programs since that time.

Today, there are 110,000 doctors in residency training programs nationwide.

About $12 billion a year is spent on training, with Medicare covering about $3 billion in direct costs. Other funds come from clinical revenues, grants and other support.

As Medicare and Medicaid payments continue to fall below the actual cost of providing care, “that clinical revenue stream, we think, will get tighter and tighter, making it harder for teaching hospitals to pay for more trainee,” said Dr. Atul Grover, chief advocacy officer for the Association of American Medical Colleges.

Federal funding works this way:

•The Direct Graduate Medical Education program uses a funding formula based on expenses, number of Medicare patients at a training hospital and number of resident trainees, all based on 1996 caps.

•The Indirect Medical Education provides money to teaching hospitals in recognition of the higher costs involved in training doctors. The formula calculates the number of residents using 1996 caps, multiplied by per-resident funding set by Congress that has fluctuated over time. Medicare pays $6.5 billion a year through this program.

•Pediatric residencies at children’s hospitals get funding from the Children’s Hospital Graduate Medical Training Program. The $300 million program was cut by $48 million this fiscal year as part of deficit reduction, Grover said.


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