My name is Doug McGee, I'm the Chief Academic Officer for the Einstein Healthcare Network in Philadelphia, and I'm very pleased to present to you the topic of Fundamentals in GME Financing. Let me first begin by disclosing any relationships that I have that may be of interest, and really I have none to disclose, although our residency programs are funded by nearly every source we're going to talk about today. But here are the real disclosures. I want you to understand that I don't have a business degree or an MBA, I don't have a background in finance, and I'm not always sure which is better on a budget sheet, black or red, and when they put parentheses around numbers, I'm not always sure what that means either. But you should know that I've been involved in graduate medical education for 25 years, been a program director, I've been the designated institutional official, and I've wrestled with every GME financing issue in our health system, which is, in fact, probably a lot like your health system. So my interests are aligned with yours, and my presentation today is not a finance presentation, but really a presentation that's aimed at trying to address some of the struggles that you face as you try to manage your residency program finances. So why is this even worth talking about? And really, what does GME funding have to do with your residence, the faculty, your curriculum, your conferences, your lab coach, your simulation training, your coordinator, your teaching time, almost anything you could name for your program? What does it have to do with you and your career? Well, it's important to understand this topic for many reasons, but one of the most important reasons that we're going to talk about today is that GME officials in your institution, finance officers, and the C-suite all speak a very different language than you do as an educator, and they balance priorities differently than you do and that your program does. And until you understand that you need to understand their perspective, you won't be a very good negotiator and you won't be able to speak the same language that they do. So part of our goal today is to make certain that we get those language nuances taken care of. Certainly, many of you have understood that institutional financial pressures have increased. Healthcare is under assault from a financial perspective, and we all are being asked to do more with less, and that's really true for GME as well. Governmental sources are being pressured. Many of you know that we are funded for graduate medical education by the CMS, and you don't have to watch the news for more than one or two days in a row when you realize that CMS is under financial pressure. We're going to talk about some of that today and how that's important to our work as GME educators. But the rest of the stuff that's part of medicine, too, is a real issue. Issues around workforce, how many physicians do we need, how many will we need in the future. We've started more medical schools. The medical schools have gotten much larger. There's been a proliferation of mid-level providers, and we are really starting to reevaluate some of the very foundational elements that have been present in GME financing for decades. And I can assure you that your institution is looking at your program. I know in our institution, we're looking at all of our programs. And the reason that is is because reports like this are out there, and this is one of my favorite reports. If you ever have a chance to go pull a report out and take a look at it, that actually helps you understand some of what we're going to talk about is this report that was produced by the RAND Corporation, and the title really says it all. Does it cost more to train residents or to replace them? Something probably, as a GME administrator, you never even contemplated, but certainly your chief operating officer, your chief financial officer, these are the kind of questions they are answering. And you better have an understanding of what the answer to this question is, too, or else you're going to have a difficult time helping them with this discussion. Because really, without GME funding, there really is no GME, or is there? And so we're going to explore some of these issues today, to talk about the basic elements of GME financing, and to talk to you about some alternatives that might be available for you to fund your program. I think it's important to understand that the accreditation side of this, ACGME, doesn't really care where your funding comes from. They want to make sure that you have sufficient resources to run your program, but that you get the funding from CMS, the traditional mechanism for funding, is not anything that they care about. We are often monolithic in our thinking about GME funding. Jesus comes from the finance, our finances come from CMS, we get them from the government, but that's not always the case. So I'm going to help you understand some of those things today. So who pays for residency training? When I give this presentation to groups, I often ask, who pays for residency training? And probably one of the most common answers that I get, well, is, well, the government pays for it. We know we get our money from Medicare, and that really is, in fact, true. But let me show you a little bit more of an expanded list of who pays for residency training, because I think it's interesting to think about it this way. So certainly CMS provides GME payments to teaching hospitals, and we're going to spend a lot of time talking about that in this module. But if your residents or your fellows take care of Medicare patients, CMS beneficiaries receive care from residents and fellows, and they get bills from attendings that are supervising residents and fellows. So CMS also pays for residency training in a bit of an indirect way with this sort of model. And the state provides Medicaid payments to many GME programs, too. But I want you to also understand that hospitals pay for GME funding. Perhaps a hospital is so far overcapped that they really are, in many real ways, supporting GME funding. I would submit to you that your faculty are paying for GME funding, because many faculty in teaching hospitals are paid less than they may be paid in private practice. So in many ways, the privilege of teaching residents, which often comes with a lower salary, is in part how residency training is paid for. And I would also submit to you that your residents and fellows are also responsible for paying for GME funding, because they are often working at salaries that you wouldn't really expect someone with four years of college and four years of graduate school to make. And so our residents and fellows are also contributing to this idea that they're in part responsible for paying for residency training. So there are a lot of parties sharing in the cost of your residence training. So with that as a backdrop, we're going to talk about some of the issues you see here on this overview slide, including the cap, and the difference between direct and indirect money. We're going to talk about counting residents and some of the financial pressures that are present in your program, a brief mention about teaching time, and then, finally, some comments about advocating for your residents. And here's a list of our learning objectives, many of which I've already mentioned to you. So to really understand where we're headed with GME financing, it's important that you understand that there is some historical perspective here related to how our programs are funded. So the history of GME funding really begins in 1965, when the Social Security Act was created and included Medicare, Medicaid, and graduate medical education funding. And so you have to ask yourself, well, why do they even do that? And the why for this really lies in this sentence right here. And I want you to look at this sentence because there's some important things that are here that are relevant today. And that sentence reads, education improves quality of care and should be an element in the cost of care to be borne partially by the hospital insurance program until the community bears the cost in some other way. So as you can see, this GME funding was never really designed to continue in perpetuity until the community bears the cost in some other way was an important part of the basic reason why GME funding was started in the first place. In 1980s, there was some reform of the GME payments, and it was really at that time where direct costs and indirect costs were split out into much of what looks like the current model that we use today. And really then, GME funding became the primary source of hospital-based indigent care for teaching hospitals and residents that trained in those hospitals. And for many hospitals, it really became perhaps not the sole, but one of the most important sources of care for poor populations. And that gave rise to the disproportionate share hospital funds, funds that are often referred to as DISH payments. And so if you hear the term DISH payment, it stands for disproportionate share hospital funds. So the historical financing of GME involves all of these different elements that all come together here in the middle to fund our residency training programs. And as you look at each one of these different boxes, you'll recognize that you do see that there is funding coming from many of the different elements here that's surrounding the money that goes into residency program funding. In 1997, something very, very important happened, and that was CMS established a cap. And this cap was applied to the intern and resident bed ratio in the hospital, and we're going to talk some more about that in just a few minutes. And really, when you talk to people and they say, well, we're over cap, what they really mean is that the hospital employs more residents than it has for funded slots. Now, this cap halted the development of residency programs for many years, and if you look at this graph, you can see that starting in the late 70s, there was an increase in the number of programs and total number of residents until it flattened out right here when it was capped in 1996, this line right here. Since that time, this number has continued to increase, and we now have more residents than we had back then, and that's a really important thing to remember because some of the narrative when GME goes to Washington and says, hey, we're going to have a hard time training our residents, the federal government looks at this idea that we are training more residents than ever since the cap was introduced. And so some of the argument that we need this money to grow programs to train residents to meet a physician shortfall in the workforce is a little bit difficult for some to buy when they see that we've been able to grow our programs and add more residents. So this cap really capped the money, and that's another very important principle to understand. In 1997, Congress imposed this cap on the amount that they would reimburse for GME training, and that amount is about $9.5 billion in Medicare and about $2 billion in Medicaid. This cap was determined by counting the residents that were present in 1996. So you can see that in 1997, they looked backwards at the previous year's Medicare cost report and counted the number of residents that you had on your cost report at that time. And so while the amount of money that your hospital received was derived by counting the number of residents on the cost report, what was really capped is the money that your hospital gets, not the number of residents. So we often talk about how far over cap you are, and we express that in terms of number of residents, but really what's capped is the money. And I'm going to swing back to that concept in just a moment. There are, of course, some other third-party payers that support GME, and there's a separate program for funding for pediatric hospitals and some other one-off arrangements for GME funding. And it's important to note that the states also paid almost $4 billion in Medicaid, and of course, much of that comes from shared federal money. So this cap has long been a roadblock in the development of new GME programs. But what was a simple roadblock at one point now has become a major obstruction on the road to developing new programs. And nearly every teaching hospital wrestles with this idea that the cap is a problem. If you go talk to your hospital president or your hospital chief operating officer, I can assure you that they've heard about the cap and this idea that we are over cap. It's a fairly big problem. I want you to understand a little bit more about the cap, so when you have these conversations with these administrators, you can understand a little bit better what it is that we're talking about. So let's talk for a second about why it is that we actually train residents well. So if I asked this group, why is it that you train residents, you'd say, well, it's really related to our mission as an academic institution. And while that is true, and that is certainly the driver for many of the decisions that we make as they relate to our residents and our fellows, it's important to understand that the residents and fellows are part of the hospital's subsidized workforce. Now that's something that academic people don't like really to hear, that residents and fellows are trainees, they're not employees, they're not health care providers, they're here to train. And all of that is true, but one of the important things you need to understand is that when you're in the C-suite, it really is true that the residents are part of the workforce that's present to take care of our patients. And these residents that are subsidized are subsidized with a fixed subsidy. That's really what the cap is. There are two exceptions, however, podiatry and dental are not subject to the cap. So if you have a podiatry residency in your hospital or a dental residency, you can have as many of those folks as you want to, and they'll be fully paid for on the cost report. So because of this cap, which is the subsidized part, and that it can't go up anymore, when more trainees are added, what really happens is the amount of trainee per resident is reduced. So if you think about it in terms of a pie, these may all be reimbursed residents at 100%, but as soon as you add more residents, you just cut the pie into smaller pieces. So overcap means that we have more employed residents than we have subsidy, and we're going to talk in a few minutes about what it means to count residents. So because of that, really no one program is actually overcap. Adding residents just reduces this per resident subsidy. So if your hospital administrators ever say, you're the overcap program, you want to point out to them that your residency isn't responsible for necessarily being overcap, even if you were the last residency added. What really is capped is the money, and that the amount of money per resident gets chopped into smaller pieces as you add more residents and more programs. A couple other important definitions to recognize. Programs to receive money on the Medicare cost report must be accredited, and the four accrediting agencies are listed here on this slide. ACGME, AOA, CODA, which is the Council on Dental Accreditation, and CPME, the Council on Podiatric Medical Education. Those are the four accrediting bodies. And of course, as you know, the AOA and the ACGME have come together for a single accreditation system, and when that occurs, then AOA in 2020 will no longer be accrediting programs. Well, unaccredited programs really can, in an indirect way, receive some Medicare funding, that is, if they take care of Medicare patients. But it's very important to understand that if you're on the cost report, you're on the cost report because you're one of these four accrediting agency programs. That's a very important concept. Let me talk now about what is known as the initial residency period. And this sounds like it's a little bit more detail than you may need, but I want you to understand it because it has something to do with how your residents are reimbursed, particularly if you're training fellows or if you're taking transfer residents. So the initial residency period is set when the resident begins training, and it does not change. So if you happen to be a medical student, the day you graduate and start your first program, that hospital puts on its Medicare cost report your name and your social security number, but it also puts a code by your name that indicates that you have started in a particular sort of training program. And that code is attached to a specific number of years, and that is known as the initial residency period. The initial residency period is as long as it takes for you to become board certified, and that's another very important concept. If you go past your IRP as an individual resident, then there's a part of your funding stream that is only reimbursed at 50%. So we're going to talk some more about that in just a minute. There are a few exceptions, but it's important to remember that when you go past your IRP as a resident, some of your funding is placed at risk. So suppose a medical student matches into an internal medicine residency specialty, and in that case, their IRP is set for three years, because a medicine residency program is three years. That's how long you have to train to become board certified by the ABIM. But suppose after a year, that medicine resident says, I don't really want to do medicine anymore. I'd like to do surgery, and instead transfers into a surgical residency. Well, that resident's IRP was set at three years the very first time they showed up on a Medicare cost report, and their IRP remains three years for the rest of their training. So that means that as a surgical resident, if they were to transfer after their second year, after their first year, they would receive 100% of the direct medical education, but only for two more years, until their whole IRP had been spent, and then they would only get 50% of the direct medical education reimbursement for the next three years of their surgical residency. So when you contemplate taking residents that are transferring from one program to another program, you need to be mindful that those residents had an IRP set the day they started as their very first resident, and you need to understand whether your hospital is going to get reimbursed fully or not. And this is why some deans, as an example, will say to the program directors, listen, you can only take medical students. You can't take anybody who's in a current training program in the match. And it's in part because you may not get fully reimbursed if they have exceeded their initial residency period. The IRP code for PM&R is 2050, and the IRP for PM&R is four years. Okay, so we've talked about IRP, and now I want to talk about direct and indirect medical education. These two funding streams come together to provide to the hospital the money that's necessary for GME training. Let's first begin by talking about the direct portion. So direct GME is fairly easy to understand. It's really intended to pay for Medicare share of the added costs that a hospital has to train residents. So this is easy to get, right? You pay resident stipends, and you pay their benefits. There are salaries for your faculty, and of course, they have benefits. You have to have a program director. There must be a library, a simulation center. There's equipment and conference rooms. All of that stuff is really part of what goes into the direct GME. Here's the formula right down here, and this formula actually is a fairly simple formula. It uses the per resident amount, which we're going to talk about in just a moment, times the hospital's Medicare utilization rate. It's very important to understand that that is in there because GME funding provided by CMS is there to pay for Medicare's fair share of GME funding. Medicare is not under the impression that it should pay for all GME training, but it's willing to pay for its portion of the training as it relates to their beneficiaries. And so that's why this number right in here is important in the formula, Medicare utilization. So you could go from one hospital to another in town, and if one hospital has more Medicare patients than another, its direct GME payments are probably higher. So it's the per resident amount times the Medicare utilization times the resident count or the cap that we talked about before. Now this per resident amount is a really important number in this formula, and the per resident amount was set a long time ago, and it varies by hospital in part because what the federal government did was look backwards, like they did with the cap, to see how many of your expenses you captured on the Medicare cost report. And if you did a really good job of capturing these costs on your cost report, then your per resident amount was higher. How much does it cost you to train your residents per resident? That's what the PRA is. This was set in 1984, in 1985, and it was really fixed. Now there is some adjustment to that, but really the cost of our training has gone up far faster than the consumer price index over the past 20 years, and really most of us aren't receiving any increases related to CPI, although there's a couple of carve outs for some specialties. But this per resident amount is an important piece of the formula, too. So as an example, if you were to calculate the direct medical education stream of reimbursement and your per resident amount was $100,000 and you had 100 residents and 35% of your inpatients were Medicare patients, you'd see that your hospital would be entitled to $3.5 million. So you can see how Medicare utilization and this per resident amount is important, and if for some reason our hospital was only $80,000 when the hospital down the block was $100,000, we would actually get less money to train the same number of residents. And likewise, if I was in a hospital where we didn't take care of very many Medicare patients, then I might not get nearly as much reimbursement for the direct medical education expenses. So again, direct GME pays for the time that the residents spend at the hospital and what is referred to as non-provider settings, which are really usually offices, when they are primarily engaged in furnishing patient care and didactics. It's important to understand that, again, CMS pays for the training of residents when it relates to patient care. And they'll pay you for didactics, and actually they'll also pay you for vacation, so long as that vacation doesn't take and drag out the resident's training any longer. So your residents can go on vacation, so long as that vacation is not any longer than it takes for them to finish their training program, to become board certified, and the federal government will reimburse you for vacation, and it'll reimburse you for didactics if they occur in a certain way. They will pay the hospital if the hospital assumes substantially all of the cost and salary of the benefits for the resident. So this means that if you send your resident out of the hospital, it depends on where they go. So if they go to an office-based setting, and you're still paying their salary, and they're working in an office, the hospital is very likely to be able to claim that on the Medicare cost report. If on the other hand, the resident is rotating to another hospital that is also a teaching hospital, that other hospital for away rotations gets to claim your residents on their Medicare cost report. You can't claim them. So it's important to understand, and we're going to talk about this further on in the lecture, where your residents are doing their training is very, very important because that relates to who it is that you can claim on your Medicare cost report and who you can't. And of course, it'll pay for some portion of the teaching faculty's salary and their benefits as well. So direct GME funding is a very important piece of the funding pie. It amounts to about one-third of the total amount of funding that's available. The IME, the indirect GME, is a much bigger portion. Now we all call it direct GME, but it's really a misnomer. It's really not there to take care of graduate medical education. It's really used for the indirect patient costs related to having a GME program. So what does that mean? It's really intended to pay for this idea that residents are not quite as efficient. The residents might drop two IVs on the floor before they get one in. They may open a central line kit and have to open a second one. And certainly many teaching hospitals have standby capacity for advanced services like trauma or burns. So all of those things go into this idea that it is more expensive to run a teaching hospital than a non-teaching hospital. Now one of the most important things that you need to understand about that particular concept is that that indirect patient cost is a hard thing to measure. Because it's a hard thing to measure, it has become a target in many of the GME funding bills that have been before Congress. If you ask the hospital to show you what the indirect costs are for GME, they have a hard time expressing that. So whenever you see a new GME bill come up in Congress or look at the ones that have been proposed in the past, you'll see that it's the IME payments that they often want to try to cut or at least place you in some sort of accountability model for. It doesn't really pay for time when the training occurs in a medical school setting, if there's not a hospital, or if your simulation lab or your conference space is there, it doesn't really pay for conferences when you're away, and it certainly doesn't pay for international rotations since there aren't any Medicare beneficiaries in another country to care for. Now this is a formula that, of course, only the federal government could come up with, and it's right here, you can see that this is the complex formula to calculate IME. This IME adjustment also has some other elements in it that are important, but it's important to understand that the IME is a DRG add-on payment, so on patients that are cared for that have Medicare, and they multiply it by the DRG payment, and that really turns into how IME is calculated, and so there's a complex formula for that too. So two streams of revenue, one direct, that pays for the residence direct expenses, and one indirect, which pays for the standby costs and learner inefficiencies related to being a teaching hospital. Now those are the monies that come from the federal government, but of course the state provides some GME payments as well, and you can see that number's about $4 billion. Part of that funding goes to the state really from CMS in the first place, and the states can match that, and really some do, up to 50%, and some states have their own health care needs, and some states have made some very creative ways to give money to support GME or induce hospitals within their state to train residents in a certain way. So perhaps they're interested in funding urban teaching hospitals, or they may be from a very rural state, and create a GME funding pool to help induce hospitals to train residents in the rural setting, particularly if they stay in their state and work. So we get a fair amount of money from the federal government, but also money from the state. Now let me talk about fellowships for a moment, because they are handled just a little bit differently as it relates to GME funding. So we're talking about ACGME-approved fellowships, and fellows show up on the cost report as, like residents do, for DME and IME. But it's important to remember that a fellow, by definition, has exceeded their initial residency period. So as an example, if a PM&R resident had an IRP of four years, and they finished their four-year training program, and they wanted to do a brain injury medicine fellowship as an example, they could do that. But when they become a fellow, they're past their IRP. Because they're past their IRP, their direct expenses are only reimbursed at 50%. Now there are a lot of rules around whether or not your fellows could actually work as an attending and bill Medicare separately, and there are some circumstances in which that can occur. But if you're contemplating having your fellows actually work and actually bill for their services in attending, assuming they had a license and were properly credentialed and all that sort of stuff, you probably ought to talk to the finance folks in your hospital, because there are a lot of complex rules that are buried in the Federal Register, and that's best left for them to give you some advice. Some can bill for their work outside their field, but it's a very narrow definition. Now, if you happen to have a hospital where you have non-accredited fellowships, non-ACGME fellowships, they're not eligible for any GME funding. So the way those are typically configured is that the individual is functioning as, in many ways, an attending with an unrestricted license, a full license. They're often credentialed members of the medical staff. They see patients, and that they're in a structured training program doesn't necessarily mean that they're not functioning as attending. So they can typically bill for those sorts of services. But for all of the ACGME-approved programs, these are some of the rules that pertain. So, in summary, this is what we've talked about. Now, we put this in here because it's obnoxiously confusing, and you can take a look at this and see many of the things that we talked about in here, but it's really a very complex thing. And I know that hospitals, program directors, coordinators, your faculty all struggle with understanding how this all works, but I can assure you that if you learn what all of this stuff sort of means, it'll serve you well, and it'll allow you to communicate with your folks in the finance office so that you can speak their same language. Let's talk a little bit about how residents are counted. So there's really multiple different ways to count residents, and let me show you here on this diagram of what we're talking about. So the number of accredited positions that you may have in your program are the number of positions that the ACGME says you can have. So if you had a residency program that was four years in length, and there were six residents in your program at each training level, you'd have 24 accredited positions. Now let's suppose that you actually were only allowed to have 20. You couldn't have all 24. Well, that would be the number of employed residents. So in any given hospital, the complement of approved positions may actually be greater than the number of employed residents. But if all of our programs pulled this white bar, we'd go all the way over here to the edge of this slide. And then the number of accredited positions would be the same as the number of employed residents. Now, remember I said earlier that there are some rotations, out-rotations, that we can't count on the Medicare cost report. So if you have a resident that goes to an international elective, as an example, you might not be able to count those on the cost report. And so the residents that show up on the cost report, this box right here, is often less than the number of residents that are employed. Because there's another box out here that contains our out-residents. They're residents that we can't count. Those two things together add up to the number of employed residents. And if your hospital happens to be over-cap, this number here, even this number right here, often exceeds what is known as the cap. So as an example, you could have a cap of 300 residents. You might show 360 residents on the cost report. And you might have 40 FTEs of residents that are on out-rotations, if you're in a big hospital with lots of programs. And you might actually employ 400 total residents and count 360 and only have a cap of 300. So you can actually see that these numbers often vary. And remember that what is capped is the reimbursement for just this box of residents right here. And that's a very important thing to understand, because the total number of employed residents, what the hospital pays for, often exceeds the cap, the reimbursed amount. So see the issue? This issue here means to the hospital, your residents may look like an expense that needs to be taken out. And I'm going to talk some more about that in just a few minutes. But it's important to understand that this narrative is not helpful to you. If your hospital is over-cap, there is a natural tendency to want to put pressure on that to try to get back to cap. And we're going to talk some more just in a few minutes about that. So why be over-capped then? Well, in my view anyway, some subsidy is better than no subsidy. And in fact, if you think about the way it works in your hospital, your attendings aren't subsidized. Your nurses aren't subsidized. The technical staff, they're not subsidized. So the only subsidized workforce in the whole hospital are your residents and your fellows. And of course, residents are attractive for lots of different reasons. Residents might attract faculty. Residents might actually provide some marketing value. And they actually may facilitate service lines in your hospital. So it's a good thing to have residents in your hospital in general terms. And of course, because the way the residents work, they often work more than the usual full-time equivalent of 40 hours a week or something like that. So if you were to hire a mid-level provider, as an example, they may work 40 hours a week. But you might have a resident that would work 60 or 70 or 80 hours a week, and often at less than what the mid-level provider would be paid. So there's a lot of good reasons to have residents. And what I like to give as an example is this idea that if the federal government asked you to open a hardware store somewhere, and they said, listen, we'll pay for your first 10 employees to help you start your hardware store, that sounds like a great idea. So you go, and you find a piece of property or a storefront, and you want to open your hardware store, and you hire these first 10 employees, and all 10 of them are fully paid for by the federal government. Salary, benefits, everything is paid for for these 10 employees. And you start your hardware store, and things are going great, and suddenly now you're going to open a paint section, and you have to hire a couple more employees, and suddenly now you want to start to carry lumber, so you have to hire three more employees, and before you know it, you have 18 employees. Well, you're not being fully reimbursed for 18 employees, but you are still being reimbursed for those 10 employees. So while paint and lumber may be very lucrative for your business, it may be a good reason to have a paint department and a lumber department open, you may only be getting reimbursed for those 10 original employees. And so that's a lot what it's like for GME funding. There's no point in having a paint department if you can't make money selling paint, but if you can make business sense out of being overcap and having unsubsidized employees, residents in this case, it may be very appropriate to be overcap. So being overcap is not such a bad thing, and this is one of the narratives that you're going to deal with when you talk to the most senior levels in your hospital. Well, so let's be way overcap. Well, it's important to understand that there are residents that aren't always taking care of patients. There's non-clinical rotations, and there's electives, and of course, the more residents you add, the more faculty you add, the more coordinators you add, more program expenses, so more everything. So there's not a good reason to be overcap, but I want you to remember this analogy about the hardware store. 10 subsidized employees is better than none, and certainly, we shouldn't have any more employees in our hardware store than we need to run our hardware store, but we should be grateful for the 10 employees that are fully reimbursed. That's exactly the way the cap works. So which way is this wind blowing, philosophically speaking? Well, it's important to understand that the changes to the cap require legislation. It's embedded in law, and CMS is the agency that's responsible for executing the law, but it really is a piece of legislation that enabled this whole system in the first place, and many healthcare reform proposals have recommended reductions to GME funding, and again, you don't have to watch the news for very many days in a row to realize that Medicare, CMS is under a lot of pressure. There have been some recent bills that have been proposed, and some of them within the past few years looked at increasing the number of slots and provide for some increased payments, but that's really not the prevailing way of thinking. It really is a political issue, and this problem is not going to be solved by any regulatory agency. It's going to be solved using the political process, and I'm going to swing back to that when I talk a little bit more about advocacy in just a bit. So what do most people think? Well, it seems that most people think that GME funding is going to go down. In fact, there was a survey of designated institutional officials, the DIO, which is ACGME's highest-ranking official in any given hospital, and they said, what would you do if the GME money was reduced? Well, most suggested that they would either have to cut programs or cut program size if the GME money is reduced. Now, I'm not sure if that really would happen if you did the business case for every single one of the programs in your hospital, but it is an interesting perspective to think about the proposition that you would have less GME money. We're going to have less positions. We're going to pay less per position. It really doesn't matter. If they cut the money, they cut the money. Now, I think it's also important to understand that there are a lot of other pressures that go into this mix here and that we might be faced with less money because people actually cut the money, but think about this too. If you have a very big hospital with hundreds of residents and you give the residents only a 2% raise every single year, it costs more each year for you to run your GME programs with the same amount of money. So even though the amount of money may not be cut, we are always struggling to try to run our programs. Certainly if the money is cut, we're going to have a bigger problem than that. So there's been a lot of discussion about trying to find the right size for your programs. How many residents should we have? We should have the right number to take care of our clinical volumes. That's how big your program should be. Now, let's talk a little bit about some local financing because really all finance is local and as I just mentioned, your GME reimbursement is flat while your GME expenses increase every single year. So you may feel as though your program is being cut, your hospital is removing money from your budget and asking you if you can cut money for conference food or travel expenses, but this is what the hospitals really face with. Salaries go up every year, liability insurance goes up, and their funding is flat. As this gap gets bigger and bigger, there's increasing amount of pressure on programs to try to either increase the revenue or cut their expenses. So this is a very important narrative and it's at times almost unsustainable. So we're going to tackle each one of these areas and talk about the ways that we can make this work. Now, you're going to say, well, the hospitals make money from the residents, don't they? And every time I've given this presentation for grand rounds at a particular hospital, that's exactly what the residents said. So let me show you a table from our hospital, which is now a fairly old table, but this is a table that I got from our finance people. So on this top line here, you can see what the GME revenue was at that time for our hospital. And if you looked at the direct expenses for our residents, what we could actually measure in the budgets over which we had responsibility, you can see that there's actually money to be made, a margin really, on the residents when you include just the direct expenses. And look at this, there's not really a cost per resident, there's actually some profit or margin per resident. Now, as soon as you start to add in overhead or indirect expenses, you can see that with the same number of residents and the same amount of revenue, that equation looks very much different. And if you have finance folks that want to add direct expenses and indirect expenses and allocated overhead, you can see that it's easy to look at these numbers and say, jeez, each resident costs us $175,000. Now, I don't think it's fair for us to include overhead, but certainly somebody does have to mow the grass and shovel the snow and turn on the electricity. So this is a very common accounting metric, and the overhead expenses are distributed across all of the cost centers in a hospital, but you can see how that changes the dynamic here. So it's a good idea to understand that these are the kinds of things that your finance folks are looking at, and this is important, while they may not look at the residents the same way you do. So what then can we do? Well, this is basic finances. You can either find more money. You can find more money because you raised the cap, or you can control costs. So I want to mention a few things in each one of these things, and I would suggest to you that you begin to think about these different areas because your hospital is going to ask you to and because it might be possible for you to run your program with a bit of a different look at how it is that you manage the finances. Well, can you raise more revenue? Well, you certainly can raise more revenue. It's not often very easy. This is a list of lots of different ways that it can happen. I'm going to mention a few of them here because I think some of them are interesting, and the first one I'd like to mention is that we might consider monetizing our efforts to train students, particularly medical students. Remember, your residency program provides a very valuable commodity. You and hospitals like yours provide third and fourth year medical education to students that are paying their tuition to the medical school, and they do that so you can have the privilege to teach them. Now, this is sometimes not a very easy conversation to have, and of course, you want to have students because you need to attract them to your residency so you can match them, but there is an expense here that is borne by your program to train medical students, and perhaps they might be willing to help you at least cover your expenses. So somebody asked me an important question one time, what would happen if we took all of the students out tomorrow, and my answer really was we would take out expense. Now, we really don't want to do that. We need to have the medical students around. In addition to them adding to the academic environment, they certainly are important to recruit for our programs, but it is interesting to contemplate this idea that you're providing a service to the medical schools, and you're probably not being reimbursed. Well, you can seek money from private industry, and there have been lots of different ways that device manufacturers and contract management groups have tried to find a way to support GME positions. This isn't that odd of a concept, and you can look around the world of GME and find different ways that private industry has sponsored GME positions. Third-party support can come from lots of different areas, and this is actually happening now. U.S. military programs don't have enough slots to train their positional workforce, and so they will often train military residents in private domestic civilian programs and provide you the funding. Certainly foreign governments can do that and provide for revenue related to training residents that are foreign nationals from another country, and actually some programs set aside positions for these fully funded residents. So you can imagine that if you're over cap and you are able to receive some third-party support, that's basically analogous to having residents that are over the cap getting reimbursed. So this is a very important thing to think about if you can find ways to have someone else fund your residence. And I'm sure many of you are thinking, well, how is it that you managed to comply with the NRMP directive that all of your positions are all in? Well, there actually is a way that the NRMP can do that, so if you're interested in that, you can talk to the NRMP, but essentially you create two tracks within your rank list. And so if you're to consider this, you might actually be able to increase the resident cohort and provide some additional resources for your program. What about rural community or governmental support? Well, this is happening now too. So let's suppose that a small town decides that it needs a cardiologist, and the hospital and the local government officials band together and they create an opportunity to recruit someone, they'll pay for their training, so long as the person comes back and finishes some of the payback in their home state or in the state that needs someone to come and be the cardiologist. So they find ways to incentivize the physician and incentivize the hospital to take folks like this, and this may be another way you could have physicians which are funded. Certainly you could seek redistributed slots. In the old days when a hospital closed, and they weren't that old, but in the old days when a hospital closed, the GME slots that were attached to any given hospital just evaporated. They went away. So in your town, in your city, if you had a hospital that closed 10 or 15 years ago, those slots just, they weren't around anymore. Now when a hospital is closed, those slots can be redistributed, and there's a process that CMS manages. It's complex and it takes and ranks requests for these slots after you make applications to CMS, and the CMS determines how they're going to be redistributed, and they try to redistribute the slots in the local area, what is known as the CDSA. This process is not very important for you to understand, but it may be an opportunity for you to help your GME office or your finance folks try to capture some of these redistributed slots. And certainly you can grow graduate medical education in virgin hospitals, and virgin hospitals is a term that we all kind of use to talk about hospitals that do not have a cap. They are not a teaching hospital. And so there's a complex process that allows you to take a brand new hospital and start programs and then petition CMS for reimbursement. And you can do that, and it takes five years to build the cap, and if that hospital is part of a bigger network, there are ways that you can actually aggregate the slots through an affiliation agreement to share those positions. So this is a way to grow GME. It's probably not the reason you would ever start a hospital, but it certainly is a way to increase the number of GME slots in a particular system or region if it's a virgin hospital. And when hospitals purchase each other, there are ways to take those slots that are in another hospital that are attached to another Medicare provider number, and certainly a purchasing hospital can work to try to get those slots under their cap. Now this is very complicated. Who owns the hospital is important. What happens to the Medicare provider number? All of that stuff goes in here, and it certainly wouldn't be the reason to buy a hospital, but if your hospital or health system is considering the purchase of another teaching hospital, I can assure you that they're looking at the number of GME slots that the hospital that they are buying has available. Very important. And certainly GME funding does come from the VA. In fact, the VA is the second largest provider of GME funding in the United States. It funds nearly 10,000 residents a year, which isn't a whole lot in relative terms, but it is certainly a lot of residents in absolute terms, and they have worked to try to increase the amount of funding that is attached to this. There's a lot of things related to this, but certainly VA hospitals have been creating and growing slots for GME, and even if your program is not located in a VA hospital, it might be possible that your residents could rotate to a VA hospital, and you could receive some reimbursement in that way. And of course, I'm sure many of you have heard about the federally qualified health centers or teaching health center GME grants. All these things are ways that the federal government has worked to try to provide some increase in funding, but it really is important to understand that these are different than CMS funding because these are oftentimes in the form of a grant or some other mechanism which places them at some funding risk. But this is another way that you can get some funds. All right. So we've talked about trying to find ways to make revenue. Some of those things you're not going to have a lot of control over, but some of the things you might have some control over are your costs, and I suspect that your hospitals have been looking at trying to have you control your costs. Even if the hospital hasn't asked you to try to control your costs, if you can control your costs, you may be able to shift money from a lower priority spend item to a more important thing to you, and we're going to talk a little bit about how that might happen. You can see here, this is a very long list of different things that people have looked at. Centralizing GME processes, looking at out-rotations and teaching dollars, stagnate resident salaries until the residents actually pay tuition. Who would ever pay tuition, you say? Well, I'd like to point out to you that that is exactly what happens for many dental specialties. There are dental residency programs in orthodontics and endodontics and specialties like that, and oftentimes those residencies are actually embedded in the dental school. So if you're an orthodontic resident and you happen to be attached to the dental school, you actually matriculate into the dental school and pay tuition while you're a resident. So could that ever happen to the medical specialties? Well, I'm not sure that we're going to ever get quite there, but this idea that residents would pay tuition is not that far-fetched of an idea. And some have talked about this idea that maybe we would create a differential for salaries. Programs that are very, very valuable that are hard to fill might get paid more, and perhaps programs that are very popular but easy to fill, maybe we would pay those residents less. And certainly, looking at resident perks that might not be required by accreditation, there's lots of different things that can be done to help control costs. So, I think one of the things you need to think about with your program is, what is your program's right size? And your hospital GME folks and the CEO are asking this question. Do some programs need more residents? Do some programs need less? So, I have a very astute hospital CEO here at one time who asked me, I noticed that we have fewer patient days each year. Why do we still have the same number of medicine residents? Well, I was able to explain that because the size of the teaching service had gotten smaller and the residents were taking care of the same number of patients. But this idea that healthcare systems have changed over the years really is important to understand because it's possible then that you need to look at what your program is doing. That same hospital CEO asked me to bring him a list of the overcap residents and the overcap programs. So, again, you need to understand that that's really not the right question and now that you understand more about how GME financing is put together, you'll have a better opportunity to help do some education there. So, this right size of the programs is a complicated discussion and it really needs a broader workforce discussion with your administration because this is really the way your residents fit into the picture. The care team, based upon how many patients we have, are really all three of these pieces of the pie. Your mid-level providers, your attending staff, and your residents. The question is how many of these providers do you need and configured in what sort of arrangement? That's how you get to the answer about how many residents you need. And so, it's quite possible that after you do the financial calculation, you might decide that you need less residents and more mid-level providers. Or, on the other hand, perhaps we could eliminate some of the mid-level providers and what we actually ought to do is grow our programs and be even farther overcap. So, this is a workforce discussion. I think if you can lever this sort of discussion in your hospital, it's a much better way to discuss being overcap. So, reviewing the number of trainees in your program, that's important. Has your service line gotten bigger? Has it gotten smaller? Is the clinical environment different than it was? Are there shifting workforce needs? All of those things need to go into this discussion about right-sizing the programs. And again, remember that residents are subsidized, at least in part, and because they work more than a typical other provider, they're often got a lot more value. So, the replacement costs are often much greater when you look at taking residents out. Let's talk about out-rotations for a port. So, remember, I talked to you earlier about this idea that when the residents are out of your hospital, you may not be able to claim them on the Medicare cost report. And so, scrutinizing the amount of times that the residents go out is important. So, sometimes residents have to go out to meet an accreditation standard. And when that happens, the hospital, your hospital, may actually get reimbursement if they're rotating to another hospital if that other hospital agrees to pay your hospital to cover the resident's salary. Sometimes you send the residents out and you get no money in exchange. And on occasion, if you really need that core rotation, you could send the residents somewhere to get that experience, but they may actually demand that your hospital pays for that rotation. Now, it's pretty easy to argue that if it's required to meet an accreditation standard, your hospital has to do that because that's what it takes to be accredited. But there are some other decisions you might make which really are much softer related to the curriculum need. Hey, it's a nice rotation. I'd like to have it. And your hospital may be willing to do that if they're reimbursed, but they might not be willing to do that if they have to actually pay the other hospital to give this rotation that you think is a good idea. And certainly electives is another area where it's not really required. Certainly, the residents want to have electives. It's part of how it is that we build a well-rounded provider. But at the same time, electives can be expensive if the hospital is not benefiting from the residents staying in the house for the elective. So ask yourself this question. How many FTEs per year does your program need to support out-rotations? And just as a simple example, if you had 12 residents in a class and you gave each one of them an out-rotation, that's 12 months of elective rotation. That's a whole full-time equivalent. So you're basically paying for one full resident just to give the residents an elective. Well, we talked a little bit about residents' salaries and that's certainly not going to be very popular, but you may need to look at slowing the growth of their salaries as time goes on. And of course, there's lots of stuff here like what the other hospitals in town are paying. And if you have residents on visas, might be certain to pay fair market value. There's a lot of stuff in this, but this is another thing to perhaps take a look at. So again, it's important to remember that your program decisions often have an expense. So you're the program director and you make decisions that have operational impact and sometimes those come with a cost. So let's go through a few of those. Let me point some of those out to you as well. So running a program can be expensive and it really should be. And many of your expenses are fixed. Salary, benefits, your coordinator. But you make decisions that impact on the program. Sometimes those decisions are really explicit. The residents must do this. Sometimes they don't really meet a defined requirement, but more a general requirement. Sometimes it's not a requirement at all, but every program does that. And some programs say stuff like this, just I need to do this to recruit. We've always done it this way. It makes my program unique. But as you make these arguments, it's important to understand that there's far greater justification for this argument from a budget perspective than there is this. And when you sit down to negotiate with your administrators, you need to make certain that you point to accreditation requirements when it's necessary to and understand that you may need to give on some of this stuff down here at the bottom. So you should try to take a look at maximizing your funding. Match residents who have no prior training. If you have rotations that are out and you can receive reimbursement, you should probably send them to hospitals. If you have a choice that have better reimbursement, you may be able to get more money back from the other hospital to cover your program's expenses. If you're at cap or over cap, you may want to scrutinize international rotations. This is very valuable to the resident, but remember that when you send a resident out, your hospital is doing so at its expense. You should watch for things like administrative months. Are they reimbursed? Well, it depends on what they do. Research months, those are also under scrutiny. So a longitudinal experience spread out over every month is a little bit different than arguing that this research month served in a lab, as an example, could be reimbursed or not. So your finance folks need to help you understand that. And then there are some other things like quality assurance, patient safety. They're a little bit easier to argue in, but you need to watch for some of these rotations. And we talked about electives too. So your decisions about your curriculum has something to do with how much money your hospital may be able to get. And these out-rotations are important. And again, I have this here a second time, because this is an area for you to focus on. How many FTEs per year does your program need to support out-rotations? So let's just, as an example, I mentioned this before, 12 residents per class, one-way assignment per month for each of three years in a three-year program to make the math easy. So that's 36 months a year. That's three FTEs. That's about $300,000 of revenue, which is lost because you've decided to give your residents one month away. And of course, if you have to pay for some of those and pay fair market value, you may actually be stuffing dollar bills in the resident's pocket while they're leaving your hospital and providing service for somebody else while you are actually paying their salary. And of course, 36 months of lost rotations probably means you're going to have to have three and a half months of backfill costs if you really rely on that resident's service. So out-rotations are an important thing for you to take a look at. Again, remember, this idea that it might cost more to train residents and replace them in part relates to the supervision model that you have in place. So we all create curriculums and we have the senior residents supervising the junior residents. We create teams. And how you have those teams put together is important. So remember that in terms of supervision, it can be very expensive. Direct supervision by the attendee is more expensive than indirect supervision. And you can certainly supervise more folks if you don't have to directly supervise them. So you need to ask yourself if your residents' rotations and their teams are working in a leveled model, do they help the productivity or do they erode the faculty productivity? And do you even know? That's a very important question. So understanding what the supervision scheme looks like is also very important. So as an example, is this model very expensive? The attending is supervising two more senior residents. How about this model? Or even this model, where the attending is supervising all of the residents directly and the PGY-3, who is a very efficient resident, is not supervising inefficient PGY-1 residents. So these three different models, which are part of every hospital's team configuration, vary in terms of their cost and efficiency. And of course, we're trying to balance safety and productivity and training. All those things are in the natural tug-of-war, but these sorts of decisions that you make as the program director impact on operations. So ask yourself, have you put poorly skilled junior trainees in high-volume areas? Have you used your highly skilled residents in high-volume areas? Do senior residents learn while they supervise or is that just really another way to displace the attending and give them something else to do? Are you productively using their skills and their competencies? How about junior residents? Are they assigned to bottleneck areas? Is the junior resident deciding who gets admitted or does the junior resident get to decide when someone's discharged? Both of those things have operational imperatives. Who's the initial point of contact for consultations? Is it the intern who has to talk to the second year, who has to talk to the third year? Is that the way it works? All of those things are important to think about as you configure your program. And of course, there are some other discretionary things that happen. So as an example, the number of core faculty you have might make your program more expensive. Remember that for each core faculty member you add, your core faculty must produce scholarship to meet the ACGME requirements. So probably it's a good idea to have really no more core faculty than you need. That is actually a less expensive model. How about faculty conference attendance? Do you have to have all of the faculty at conference? Can you have two faculty at conference? Each RRC has different requirements, but just imagine if you had 200 hours of conference a year and each faculty member attended 20 percent of all conferences and you had 10 core faculty, you could see how that the number of hours of teaching time gets to be very, very expensive. And remember that while they're in conference, they're actually not generating any clinical revenue. Now that's not your problem, you say, but that actually is the practice's problem and it may be the hospital's problem. So you need to take a look at this and decide how many people do you really need to come to conference or to serve on your PEC or your clinical competence committee? How many people need to recruit? All those things are expenses which you should look at. And of course, some of these other things, if you extend a resident's training because they're on probation, well, that's a $50,000 decision. If you have residents that are on H-1B visa, there's some expense there. If you take residents that are past their IRP, all of those things are important decisions related to the expenses of your program. Now, let me just touch for just a few minutes on budgeting. And I like to tell this story about what is known in the accounting world as the tragedy of the commons. So many, many centuries ago in feudal England, when the king actually owned all of the property and the folks that lived around the castle all had an opportunity to graze their cattle on the commons, the common property. And if you were a smart farmer, you realized that if you added more cows, more cows, you could actually make more money. But if every farmer did that, eventually there wouldn't be any more grass for the farmers. And the tragedy of the commons is as each individual constituency tries to use more and more of the common resources, eventually all of the constituencies are hurt. And that's what happens in our hospitals. So you and all of the rest of the programs in your hospital are like these cows on this slide. You're all competing for the GME money, which is the grass. And if you all work to try to get as much as you can for your program, you're going to hurt and disenfranchise another program. And trust me, they're thinking about your program the same way. So you need to start to work with principled priorities related to the budget. You shouldn't fight over money. Fight over valued principles for your residents. You should really argue for things that meet clear, explicit accreditation requirements. And argue less strenuously for these desired program elements. Do you really need it? Well, you probably really need this. So think about your priorities and do it in a principled way when you talk budget with your budget folks. There's a couple different budget models, and I think one of them is better than the other. This is a very common hospital budgeting model, the traditional model. Well, what did we spend last year? Was that enough? And even if it wasn't, we should probably add 10% and put it in. The reason why people do that is they know that the person who's scrutinizing their budget is going to cut it anyway. And they, the people that are cutting your budget, they know you padded it too. So you add 10%, you know, because they're going to take money out. They know you padded it, so they ask for more out. And this positional bargaining goes back and forth and back and forth like you're buying a car. And eventually you settle on some number. But principled negotiation is often a better strategy. Agree to what the residents need and then figure out what it costs rather than arguing over the dollar. So zero-based budgeting is basically what that principle is. And using budget scripts is another very helpful way to create your budget. The number of residents times the number of coats equals the number that goes in the coatline. You don't have to guess. And when you work that way, it creates a certain sense of fairness and trust, especially if it's widely adopted in your institution. Work with your GME office. They're under a lot of pressure as well to try to centralize processes, share costs. They can achieve some economy of scale. And they really ought to be the buffer between you, your program, and the hospital administration, which is trying to put pressure on your program. Your GME office really ought to help you with this transition so that you can win principled prioritization for your program's funding. Just a brief mention of teaching dollars. So your faculty, when they aren't working clinically, are engaged in what is generally referred to as teaching time. It's important for you to understand that while CMS provides money to fill in this blue diamond right here, this blue triangle, they're also at the same time not being clinically productive. So there's a natural tension between the clinical practice and your operation up here. And how that formula gets calculated is very, very important. So we like to think that we're all discrete financial entities, but we're often part of a larger parent. But it's important to remember that we make money in medicine when people bill for services. So when you're making demands of your clinicians for non-teaching time, that has an expense. And while that expense should be reimbursed by CMS, it's important that you understand that the other side of this equation is related to clinical productivity. And you're going to have to engage in a discussion with those that are responsible for that side of the equation to come up with a good solution around teaching time. So there is increasing pressure on teaching time, and that's really brought about by the increasing pressure on RVU productivity. So this is often a difficult conversation to have, but you need to get familiar with both sides of the equation so you can be an effective negotiator. So here's where we are with GME. It really is the perfect storm. We're in an environment which is very, very difficult with dwindling resources and increasing demands. So I think that programs should really understand these global institutional pressures. You need to become a partner rather than oppositional as it comes to working with administration. And you really need to be a prudent steward of your hospital's resources. You need to find a way to value your program and explain it to others in terms that they value. So the program administration, the program faculty, your parent department, all of us have different ways we look at the program. Your GME office looks at your program in a bit of a different way. The finance office has different values. Certainly marketing looks at your program in a different way. And as an effective negotiator, understanding what each one of these constituencies values helps you speak to them when you need to argue for more resources for your program. And of course, these are a laundry list of other value impactors. All of them are very important on what it is that your program brings to the table when you talk about the value proposition for the residency programs that are in your hospital, yours compared to others. You need to understand what is the business case. Is there an ROI, return on investment, for your program? Can you even think about that or express that? Do you know how much your program actually costs? How do your faculty perform with and without residence? Do you know that? You need to understand that the faculty work caps are expensive compared with others. You need to show the faculty's value. And again, zero-based scripted budgeting is somewhat helpful here. So this is an important thing to close with and that is that this is in many ways a problem related to legislation. And there's been a lot of people that have spoken to this, including the IOM. And I'm just going to briefly touch on some of these really important reports. You know that the IOM doesn't really have any regulatory or enforcement authority, but they really are a bully pulpit that makes very important pronouncements about very complex problems and they often become a really important part of the discussion. So the IOM report is very valuable to read. You need to understand that they first recommended that Medicare funding be maintained. But they also looked at taking some of that current money and carving it out to develop some different policy and structure related to financing GME. So they made some recommendations that will actually spend some of the other money that you're spending now for your residence. So while they didn't recommend it be cut, they recommended some other activities be increased, which is in many ways a cut to the GME funding. And they also recommended that a transformational fund be formed so that new and innovative ways can be funded to help train our national workforce. Some folks have suggested that really maybe we ought to give the money directly to the residents because the residents are the direct beneficiaries of the GME funding. Maybe we should give the money directly to them. And there are some discussions in Washington that continue to go on about what may happen. So there are proposed budget cuts. There are double AMC has made comments. And really it's a difficult proposition to have a discussion about because there's really no public support for physicians in this way. So already your average residence salary is greater than the 50th percentile of U.S. wage earners. And of course the average practicing physician's salary is really greater than 95th percentile. So imagine yourself being in Washington and saying to your legislator, listen I'd like you to find a way to support my residence training. And they're saying so that they could become a member of the one percent. So it's a difficult discussion to have and you need to find strategies within your specialty society to have it in a way that makes sense. So I'd like to end here with a conversation about advocacy. Because if it's not you, then who? You got to understand all of the things that go into this equation around advocating at home. Start at your own hospital. Understand that they have global pressures. Get involved in your budget. Help them tighten their finances. Explore other revenues as a partner with your institution. And again be a prudent steward of hospital resources. Find a way to value your program and articulate it to others in terms that they value. So advocating at home, very important. You should advocate for others. This is a legislative issue. Advocate for your specialty and advocate for GME. There's a lot of colliding issues here and so there's increasing pressure on what it is that we're going to do and it's not going to get any better as time moves forward. A lot of legislating hand wringing and you can see here there's been many bills that have been proposed that have increased slots but at the same time placed some of the IME at risk. There's a lot of things going on in Washington related to GME funding and you should pay attention to those things. So where is your specialty in the fight? One of the things I'd like to point out is that the ACA, which is of course now under discussion, created a National Workforce Commission and the ACA actually impaneled this commission but never funded it. So the initial people that were appointed to this National Workforce Commission have already had their terms expire and new people have been reappointed but they have never met. And so the data around what is the right number of physicians in the country really comes from this 2008 HRSA report. So who knows if your specialty will be described as a shorted specialty. That would be a good thing to know. So here's where we are. What is it that your organization is going to do? Are you really going to mentor, discover, lead? I think there's opportunity here for you to do all of those things. Let me tell you a little story about an experience I had that was an eye-opener for me. The House Resolution 1210 was introduced in the 113th Congress and it was a bill titled Training Tomorrow's Doctors Today and its goal was to increase the number of funded GME positions. And it was sponsored by a Republican from Illinois and a Democrat from Pennsylvania from my hometown here where I work. And so our political folks said, please come to Washington with me. We want to meet with the two members, Representative Schock and Representative Schwartz and talk about the bill because they needed to reintroduce it into the next Congress. So we went to the Washington DC. I rode down on the train and we met in a House office building for one hour with the legislative directors and the legislative folks in their offices. The stakeholders that were in attendance were the representatives of family physicians, neurosurgeons, OBGYN was represented, the AOA was represented, AAMC represented. There were some large hospital groups that were in the group and there was one of our government affairs staff who was a lobbyist and then there was me. So in the room the number of lawyers or lobbyists, 12. The number of doctors in the room, one. The number of people who taught medical students, recruited or matched residents, trained residents, made a residency budget or added any provider ever to the workforce, well that was one. That was an interesting experience for me because it pointed out something very important and that is that these things that happen in Washington related to GME funding are important to you and you need to be there to make certain that people in Washington hear your story. It's a brave new world. You need to get in the game and understand GME financing and a module like this is the first step to do that. At home you need to understand the business of graduate medical education. You need to engage in principle, prioritization and negotiation. You should articulate your teaching effort and find a way to value that and you really need to understand how it is that you can express the value of your program in terms that other stakeholders can understand and certainly in Congress you should find a way to support the efforts of other stakeholders, other specialties, support medical PACs and talk to Congress. All those things are very important. At the end of the day what you really need to focus on is following the money. That will serve you well. Thank you for your attention.

graduate medical education

GME financing

program directors

residency program finances

GME officials

program funding

government funding

GME funding allocation

teaching hospitals

advocacy for GME funding

financial challenges