July/ August 2013 First Teach No Harm

The U.S. spends $13 billion a year subsidizing graduate medical education. Yet almost all of this money winds up producing the wrong kinds of doctors in the wrong places, with America’s most elite teaching hospitals being the worst offenders.

By Phillip Longman

The only major element of residency programs that is not dealt with in Scrubs is the fact that government money is propping up every scene. No one talks about this in the show because, as in real life, no one has to account to the public for what kind of education this money is buying. Rather, the money simply flows like an entitlement. Scrubs is quite forthright in depicting the role of money in other domains of health care, such as when it builds episodes around poor or uninsured patients being denied care. But the residents seem unaware that even as the hospital treats them like serfs, it is most likely making money on each one of them, thanks to the government subsidies that come on top of the value of their labor.

How did America’s system for training doctors come to be like this, and what can be done about it now? The story begins in the Progressive Era, when reformers made great strides in improving the quality of medical schools, with institutions like Johns Hopkins leading the way in infusing the core curriculum with scientific rigor. But by the 1920s it was already clear that universities and their medical schools were uninterested in taking responsibility for providing on-the-job training for their graduates, much as law schools to this day do not concern themselves with providing newly minted lawyers with apprenticeships. A few individual hospitals and medical societies stepped in by developing residency programs, but on an ad hoc basis, and with no public subsidies.

This began to change after World War II, when Omar Bradley, the storied “soldier’s general,” took over the Veterans Administration and forged a historic partnership with the nation’s medical schools. Under this partnership, medical schools were allowed to use VA hospitals as teaching facilities and to get paid for doing it. For many decades afterward, the VA was the largest sponsor of residency programs, and even now roughly a third of all practicing doctors in the U.S. have at one point or another trained in VA facilities.

The quantum leaps in federal support for graduate medical education came, however, with the passage of Medicare in 1965. Ever since, Medicare has paid graduate medical programs a direct subsidy, including the cost of the stipends residents receive. Since the mid-1980s, Medicare has also kicked in the so-called indirect medical education adjustment, an extra flow of money with which teaching hospitals can pretty much do whatever they want.

“Program directors often complain that they are hampered in achieving their educational missions,” notes a report by MedPAC calling for reform, “because hospitals do not pass through an adequate portion of their reimbursement for the conduct of programs.” Today, Medicare pays about $10 billion a year in subsidies for residency programs. Of this amount roughly a third cannot be “empirically justified,” according to MedPAC, meaning that no one can tell where the money goes, let alone whether it is being spent effectively.

This lack of accountability also has deep roots. All along, government has bent to the power of established medicine by allowing the regulation of residency programs to be left in the hands of medical societies dominated by specialists. Constant feuding among different factions eventually led to the creation of liaison groups that tried to smooth out the tensions, but power over how residency programs use government money still resides within the medical profession itself. The primary body for regulating residency programs is a private organization called the Accreditation Council for Graduate Medical Education, which in 2011 collected accreditation fees of more than $34 million from the programs it certifies. Its board comprises representatives from its membership organizations, which are the American Board of Medical Specialties, the American Hospital Association, the American Medical Association, the Association of American Medical Colleges, and the Council of Medical Specialty Societies.

For decades now, reformers have continued to cry out that this governance structure produces dysfunctional results. As early as the 1960s, the problem of overspecialization in American medicine was well established by such leading medical authorities as Dr. Kerr White, who documented the increasing fragmentation of the American health care delivery system as the number of general practitioners declined and the number of specialists grew. In 1971, Congress tried an end run around the residency programs that were churning out these specialists by creating a program that specifically funded residencies in general pediatrics, general internal medicine, and the emerging discipline of family medicine. But the funding remained minuscule, and attempts to gain any government regulation over how residency programs spent taxpayer dollars were consistently beaten back.

As an indication of just how perennial this behind-the-scenes struggle has been, in 1980 a federal advisory panel on graduate medical education was already criticizing the system for pumping out an excess supply of specialists. By 1985, none other than then Senator Dan Quayle was penning an article for the policy journal Health Affairs calling for Medicare to stop subsidizing residency programs that didn’t send at least 70 percent of their graduates into primary care. By 1989, the Institute of Medicine was weighing in, saying that graduate medical education programs were too concentrated in hospitals and were failing to provide proper training for primary care physicians. Yet despite the alliance of conservatives alarmed by the mounting cost of Medicare and reformers intent on improving the practice of American medicine, nothing changed, thanks to the entrenched powers of specialists within both academic medicine and the health care system generally.

By 1997, Congress basically threw up its hands and reached for the only politically available lever it had to reduce the growing expense of subsidizing residency programs. Unable to find the votes to hold existing programs accountable for their use of public funds, it simply froze the number of resident slots it would finance. This was a crude measure. While it held down government costs in the short run, it did nothing to arrest the growing ranks of specialists in places they weren’t needed, nor to turn around the increasing scarcity of primary care doctors and other generalists. The increasingly specialized academic medical centers that sponsor most residency programs simply reduced the number of primary care residency slots and boosted the number producing specialists. Congress’s failure to address both trends in turn deepened the mismatch between the composition of the health care workforce and the needs of the health care system, leading to inefficiency, higher costs, and, ultimately, worse health outcomes. After some sixteen years of this, you would think that we might do better, or at least that the public would wake up to the problem.

shortage map
Federally Designated Primary Shortage Areas, 2013

In search of solutions, I recently traveled to Scranton, Pennsylvania, and met with Dr. Linda Thomas-Hemak and her colleagues, who have forged a new model for residency programs that points to the future.

Phillip Longman is a senior editor at the Washington Monthly and a lecturer at Johns Hopkins University, where he teaches health care policy. He is also a senior fellow at the New America Foundation, where Atul Gawande is a board member.


  • Brian Crownover MD on June 21, 2013 12:22 PM:

    Finally, someone is talking about REAL health care reform, not health care ACCESS reform which the ACA addressed. This review should be mandatory reading for every congressman and especially Pres Obama. For clear insight on the need to reform physician payment which directly impacts specialty choice, read about the RUC. http://well.blogs.nytimes.com/2011/09/22/how-one-small-group-sets-doctors-pay/?_r=0

  • Henrietta McClellan on June 21, 2013 1:18 PM:

    Great article. Am looking for a link to forward to some of my friends on my email list!

  • Denise Shungu on June 21, 2013 3:03 PM:

    Something you almost completely leave out of this thoughtful article is the student loans from the 4 years of medical school and sometimes of college as well. If you would cancel half of the loans for anyone going into Family medicine or whatever the Primary Care is called, you would have many more students who would take that specialty and residency programs would be forced to change because of increased demand.

    My own son who is doing his residency in Primary Care at Thomas Jefferson was able to able to do this because he received a full tuition scholarship to a medical school. His fiancee who had both college loans and medical school loans felt forced to choose a specialty.

  • Bohdan A Oryshkevich, MD, MPH on June 21, 2013 6:10 PM:

    This is a great article. It hits the problem right on the head.

    I would have put a bit more emphasis on the financing of medical education as part of the strategy of acclimatizing medical residents to choosing procedure oriented specialties.

    The Wright Center program is great, but such programs are not likely to produce the numbers of primary care physicians that we need.

    Second, in the process of promoting primary care, we should not demonize specialists. We need them also but perhaps in not such great numbers. They need to be part of the solution.

    Something has to give.

    Bohdan A Oryshkevich, MD, MPH
    New York City

  • Robert C. Bowman, M.D. on June 22, 2013 2:08 AM:

    Common sense indicates specific solutions for primary care and a need for departures from the last 30 years of stagnation. This collaboration has taken a step closer to a specific design.

    Specific preparation for primary care begins as an employee or volunteer in a site focused upon health access.

    Specific training for primary care involves medical school and residency at the health access site.

    Specific primary care result at the current time is seen in 90% of family physicians who resist departure from primary care over their careers - despite adverse policy.

    Hospital and subspecialty preparation and training plus training that is flexible in primary care career result plus national health policy designs fail most Americans in their basic health access needs.

  • Anonymous on June 24, 2013 3:26 PM:

    Why no mention of nurse practicioners are primary care providers?

  • American Association of Colleges of Osteopathic Medicine (AACOM) on June 27, 2013 1:11 PM:

    This article discusses several important concerns surrounding the primary care physician workforce shortage facing the nation. The American Association of Colleges of Osteopathic Medicine (AACOM) agrees with the writer, Mr. Phillip Longman, that the nationwide gap between primary care need and availability is a critical issue and that the need to develop solutions has never been more important. However, we feel that the ongoing efforts put forth by AACOM and its member colleges of osteopathic medicine to address the primary care physician shortage are essential to finding a solution to this crisis.

    In the U.S. today, more than 20 percent of medical students are training to become osteopathic physicians (DOs). While osteopathic medical students may pursue any medical specialty, more than 40 percent of these students enter into a primary care or family medicine residency.

    Currently, there are 29 colleges of osteopathic medicine in the U.S., offering instruction at 37 locations in 28 states, with many of these campuses situated in medically underserved areas highlighted in “First Teach No Harm.” According to data published in the April 2012 issue of Academic Medicine on physician supply in Appalachia, three of the nation’s colleges of osteopathic medicine fall within the top 10 U.S. medical schools supplying the most graduates to the primary care workforce in at-risk counties in Appalachia (as of 2009). These schools are the West Virginia School of Osteopathic Medicine (WVSOM), the University of Pikeville Kentucky College of Osteopathic Medicine (UP-KYCOM), and the Ohio University Heritage College of Osteopathic Medicine (OU-HCOM). Taking this data into account, along with the more than 40 percent of all DO graduates who accept primary care residencies, compounded with the rising total number of osteopathic medical school graduates each year, it is clear that osteopathic medical schools play a key role in increasing the number of medical students entering into primary care residencies, thus are integral in developing a stronger primary care workforce, particularly in medically underserved and at-risk regions.

    Through our advocacy efforts, AACOM strongly supports legislative initiatives that establish and implement innovative and cost-effective solutions to strengthen the nation’s primary care physician workforce. Recently, AACOM endorsed its support of the “Building a Health Care Workforce for the Future Act.” This legislation supports, among other priorities, the expansion of programs such as the National Health Service Corps (NHSC) Scholarship Program, which incentivizes primary care residency training in underserved areas. AACOM also strongly supports the continuation and sustainment of the Health Resources and Services Administration’s (HRSA) Teaching Health Center Graduate Medical Education (GME) Program, which increases opportunities for primary care GME, sets a strong precedent to fund GME outside of the traditional Centers for Medicare & Medicaid Services funding stream, and creates new avenues for training medical residents in community-based, non-hospital settings.

    AACOM and the osteopathic medical education community are dedicated to ensuring a well-trained physician workforce capable of meeting the current and impending health care needs of the nation. For more information, please contact Lindsey Jurd, AACOM editor and communications associate, at ljurd@aacom.org.

  • Mark Asplund on July 02, 2013 10:00 AM:

    Great article although it leaves out that it is actually medicare and medicaid that pay for medical students to become actual doctors..

    Not many people realize that is why they are expected to treat medicare and medicaid patient for less. They are essentially expected to "pay back" the cost of their 1/2 million in training.. Anyone who has a mortgage or a car loan that you pay back about 2x the cost

    So any doc's who opt out of medicare and medicaid are breaking their trust with US taxpayers and should be required to pay back in full (interest plus pentalty) or at the very least make this exchange of training for profession a legally binding document.

    We could easily shift the % paid to residents and give family practice docs 80k a year vs the typical 50k in residency and cut the $ to specality providers

  • jim jaffe on July 02, 2013 1:46 PM:

    while most of your subsidiary criticisms are on point, the basic one is flawed. America does NOT face a physician shortage. The ratio between physicians and patients has been improving for years. The ratio between primary care physicians and patients has been also, albeit more slowly. The explosion of walk-in doc-in-box operation gives patients easier access than ever before.

    The only thing a rising physician supply will give us is a larger national medical bill. As Wennberg and others have been documenting for years, enlarging the physician supply simply increases costs without improving health status.

    It makes more sense to let supply shrink and take up the slack with cheaper, but competent folks like nurse practitioners and physician assistants.

  • Atul Grover, Chief Public Policy Officer, Association of American Medical Colleges on July 02, 2013 3:27 PM:

    The AAMC is very disappointed that Mr. Longman did not contact the AAMC for information or comment when he was writing his article. We are writing to clarify a number of important points that his article fails to reflect.

    Read the rest of Dr. Grover's comment here.

  • Ashfaq Khan on July 04, 2013 1:44 PM:

    In this country a primary care physician cannot work without some assistance from a specialist. Mal practice environment potentates this to a greater extent. Non MD/DOs can fill the gap easily on a day to day general practice work. Modern day stethoscope is imaging (X ray,ultrasound and CT machines)making diagnostic decisions on the basis of clinical skills is not the standard of care in USA. We need a balance approach to address the issue.

  • Leena Varughese MD on July 07, 2013 12:11 AM:

    Well-written article from a concerned citizen regarding the state of graduate medical education that explores several areas of problems in graduate medical education. It's important to recognize that great harm comes from the lack of oversight in medical education system and it's a runaway gravy train for major hospitals, where 500k dollars is a conservative estimate of the funding and profitability and value of each medical resident. Clearly, many programs are using the system to enrich themselves, rather than teach residents in residency programs. The program directors do not prioritize teaching residents but utilizes the system to systematically misguide, not teach, and obfuscate appropriate diagnostic information from medical residents. I have certainly experienced this while I was at Mount Sinai Medical Center/ Mount Sinai Hospital in NYC doing Anatomic and Clinical Pathology residency program.

  • BSatiani on July 16, 2013 12:50 PM:

    There is no doubt that the impact of the shortage of all physicians is going to be felt even more with the entry of millions into the elective pool of patients. I also completely agree that throwing more money at the problem without much more accountability from teaching hospitals would be wrong.
    However, the article is simply myopic as Atul Grover implies and denies any impact of specialists shortages. We have documented the upcoming shortages in surgical specialties. Until we have disruptive models of surgical care, with the aging population there is no substitute for these specialists using NP's and PA's. His statement "inflate health care spending by engaging in massive amounts of unnecessary surgery and other forms of over-treatment" is offensive to most specialists who are honest and follow guidelines.I assume primary care physicians have some bad apples as well.
    The best solution for primary care shortages is to not only encourage our residents to enter the field but open up many more NP and PA schools. Much as the author won't like the solution, they are much cheaper to train and can provide the same care to a large percentage of the population. Hence, the entry of CVS/Walmart into the field employing NP's and PA's and now branching into chronic diseases. Why not?

  • Frustrated primary doc on July 16, 2013 6:38 PM:

    1) Documentation is stifling: in order to get paid for the time and effort I put into caring for a patient, I have to document a lot a boat load of information to prove the complexity of the visit I coded for. In addition to the documentation for each visit I get a mountain of forms via fax from insurance companies, drug companies and pharmacies to substantiate the Rx's I write or to tell me to consider a drug from another company, one that gives the insurance company a discount.

    2) Every one want's to abuse the system and it seems the Medicare is putting the burden of policing this on the primary care doc in the way of forms to fill out.

    3) Specialists dump on the primary care doc. A patient gets wrist surgery etc and needs needs his workman's comp form filled out, and the surgeon tells the patient "take it to your primary care doc". Dermatologist does surgery on a patient and if the patient has a problem after hours, on the weekend, has a recording that says, call your primary care doc. Patient's surgeon does surgery on a patient's back and tell him, "my work is done, call you primary care doc if you need pain pills".

    4) Copays are ever higher so patient's want to squeeze ever so much into every visit which goes on longer and longer. But the reimbursement is capped by the coding requirements.

    The time I spend with all this paper work is without reimbursement, yet my nurses want to be paid for the overtime they put in.

    I became a doc to care for people not to push paper or be a Medicare cop or Specialists' scut monkey. And if pushing paper & being a scut monkey paid, I continue but it doesn't.

    I introduced myself to a new radiologist at the hospital while going over X-rays and he asked what specialty I was in, I told him and he responds "oh my god the paper work" My feelings exactly. It is the real reason for the primary care doc shortage. The answer: just as in anesthesiology: one doc who sees a few patients but manages a large team of nurse practitioners and PA's.

    I can't wait to get out. I can't retire, but I'm going to work part time to at least enjoy my sanity.