Lately, we’ve seen two distinct lines at our hospitals. We would all be healthier if we brought the two lines together.
The first line forms every morning before the building opens. Mothers, children, and the disabled clutch passels of documents along the sidewalk. They wait to reauthorize their Medicaid insurance.
The second line formed about a decade ago and takes place virtually. Future pediatricians, psychiatrists, and plastic surgeons log on for 30-minute calls seeking entry into residency. They are applying to begin their graduate medical training at our hospitals.
During the pandemic, both lines were altered in favor of equity. For the roughly three years of the official public health emergency, Medicaid was automatically renewed, keeping millions of people from disease and poverty. The public health emergency ended in May 2023, and Medicaid renewal now again requires the presentation of qualifying documents. In the fall of 2020, medical student interviews went virtual to minimize the spread of disease and improve equity by reducing interview barriers.
Today, only one of these two changes endures: Medical students can still apply for the next step in their training through virtual interviews.
Becoming a physician is a well-defined path. You earn an undergraduate degree laden with basic science courses, score well on a series of licensing exams, and successfully complete a four-year medical school degree, which makes you a doctor. To become a physician, you must train in a residency, which prepares you for independent practice. American medical students apply to an average of 95 residencies, and the students who successfully match interview at a median of 14 programs.
In our careers as academic physicians, we have long cheered the autumn parade of medical students applying to residencies. We each work at one of our nation’s 871 teaching hospitals, where 149,296 doctors in training are enrolled in approximately 12,740 graduate medical education, or GME, programs. These doctors are caring, day and night, for the acutely ill. The training shapes their lives, as 57.1% will practice in the state where they train. The training defines their careers, as they select one of medicine’s 182 specialties and subspecialties as their own. The training also alters the health of the people they meet, or don’t meet, as patients.
The people in the other line are, often literally, dying to see a physician. These people, at least for now, are among the 72.5 million Americans who have Medicaid. Medicaid is an essential lifeline that has demonstrated the ability to save lives, reduce disparities, encourage workforce participation, and bolster economies. More Americans receive their health insurance through Medicaid than any other source, but they have to demonstrate annually that they still qualify. The Kaiser Family Foundation reports that 8.6 million Americans have been unenrolled from Medicaid since May 2023, 72% for procedural reasons, and roughly 40% of those disenrolled are children.
This summer, the federal government began publicly scolding 36 states for allowing so many of its citizens to fall off the Medicaid rolls. Ten of those states have previously refused the Medicaid expansion offered by the Affordable Care Act (ACA), so scolding will likely be futile.
But there’s a more effective approach the federal government could take. It could bring together the two lines at teaching hospitals by tying more graduate medical education funding to Medicaid.
Both our patients and our trainees know that Medicaid is a partnership between the federal government and the states. States have a say in what Medicaid covers, but at minimum, it includes care for low-income families, qualified pregnant women and children, the blind, and the disabled. States can choose to add people in other vulnerable populations, including those who receive home and community-based care.
What few of our patients or our physicians in training know is that Medicaid is also the second-largest source of GME funding, with the District of Columbia and 43 states providing nearly $7.39 billion in 2022. Since it is a partnership between the federal government and the states, Medicaid is well adapted for local solutions. According to the Association of American Medical Colleges, 11 states extend payments to places beyond hospitals that train residents, and 12 states use the payments to support the training of non-physician health professionals. Many states audit Medicaid payments and scrutinize the financial performance of their teaching hospitals, some hold teaching hospitals accountable for their social impact, and others recognize GME costs as part of overall hospital costs; each of these strategies provides levels of local responsiveness which Medicare lacks. The partnership also allows 57% of Medicaid GME payments to support managed care with 43% of payments made under fee-for-service.
Unfortunately, it is the first-largest source of GME funding that keeps the lines of new doctors so orderly and the lines of impoverished patients so lengthy.
In 2020, Medicare provided $4.5 billion to partially compensate teaching hospitals for education costs and an additional $11.68 billion to compensate teaching hospitals for the higher patient care costs that can accompany teaching. While the underlying math follows a complicated formula, it depends primarily on the percentage of beds occupied at teaching hospitals by Medicare patients. As the cost of inpatient care rises for Medicare recipients, the payments to teaching hospitals rise as well.
Medicare primarily insures people older than 65, the disabled, and people with end-stage renal disease. Linking GME to Medicare has successfully trained generations of physicians to care for people insured by Medicare; more than 8 out of 10 practicing physicians accept patients insured by Medicare, almost identical to the rates of physicians accepting private insurance.
Medicare is a critical safety-net for our country, but a safety-net that favors the wealthier and whiter Americans who live longer and use more medical services. Medicare leaves many patients underserved and skews the kinds of physicians we train. It is, for example, difficult to train pediatricians because children rarely have Medicare.
Oddly enough, it also makes it difficult to train geriatricians. Teaching hospitals have broad latitude to use federal dollars for the training programs they desire. Trainees in a procedural specialty, like anesthesia or orthopedics, bring in more than double the amount of money generated by trainees in a non-procedural specialty like geriatrics or primary care. But teaching hospitals typically pay residents and fellows the same stipend for each year of training, regardless of specialty, financially incentivizing hospitals to train doctors in more remunerative specialties. Funding GME primarily through Medicare, a fee-for-service insurance system, is the flaw at the heart of our expensive health care system, leaving us with more specialists than primary care physicians. Our nation is short 26,980 geriatricians and, in less than ten years, is expected to be short as many as 55,200 primary care doctors as well.
So the line of patients keeps growing.
Instead of training future physicians on a fee-for-service model, where they learn to think about medicine as a consumer good and health care as the business which provides it to the insured, we should train future physicians to provide a community’s essential services by shifting GME funding to Medicaid.
To be sure, Medicaid is well-known for lower reimbursement rates and more billing problems than Medicare. Many teaching hospitals would resist switching to Medicaid because of those lower reimbursement rates. States would also be reluctant to make the change because it requires their financial partnership. The change would be further resisted by many insurers because they prefer the fee-for-service model of Medicare.
But our health care system desperately needs reform, and all the resisters need physician trainees, so linking GME to Medicaid would enlist teaching hospitals, states, and insurers across the country in efforts to improve the administration of Medicaid — even in the 10 states that refused ACA Medicaid expansion. Alabama’s 154 GME programs, Florida’s 732, Georgia’s 258, Kansas’ 81, Mississippi’s 86, South Carolina’s 168, Tennessee’s 247, Texas’s 872, Wisconsin’s 227, and even Wyoming’s four rely upon federal support. Linking GME funds to Medicaid beds would encourage states to expand and improve Medicaid so they can retain their ability to train a physician workforce.
After all, Medicare was never meant to be the permanent source of GME funding. In its original 1965 legislation, it was intended as a stopgap until “the community undertakes to bear such education costs in some other way.”
That some other way has arrived, and it is time for a third transformative expansion to Medicaid: tying it to graduate medical education.
Congress currently is considering two GME bills. The Resident Physician Shortage Reduction Act would expand federal funding for GME, and the Fairness for Rural Teaching Hospitals Act would alter some of the funding rules which disadvantage rural communities. Funding these, and all future, GME programs through Medicaid would advance Medicaid, the most cost-effective form of health care.
The medical students applying for our residencies right now are a bright, committed group; tomorrow’s physicians. Physicians like us are teaching them clinical skills. We can also engage trainees to rebuild our safety net, to serve the patients waiting in line. Tying the federal teaching hospital support for graduate medical education to the number of patients with Medicaid, instead of hospital beds occupied by people with Medicare, would incentivize both Medicaid expansion and increase the provision of services to patients with Medicaid at our nation’s teaching hospitals.
Residency determines what kind of physicians we have as a nation and where these physicians will practice. Tying GME to Medicaid would advance the how of medicine: access to physicians for all of us.
Abraham M. Nussbaum is the chief education officer at Denver Health and the author of “Progress Notes: One Year in the Future of Medicine.” Renee Y. Hsia is professor and vice chair for health services research of the UCSF Department of Emergency Medicine, and a Paul & Daisy Soros fellow and public voices fellow of the OpEd Project.