- The gap b/w GME (DGME and IME) costs and CA hospitals' cost of educating reached $1 bill which got their attention

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1 Tom Priselac, President & CEO, Cedars Sinai Medical Center Tom Enders, Managing Director, Manatt Health Solutions Catherine Lucey, MD, Vice Dean for Education, UCSF Summary of CA initiative: - The gap b/w GME (DGME and IME) costs and CA hospitals' cost of educating reached $1 bill which got their attention - GME subsidy is mainly supported by commercial premiums that are eroding. There is concern that the great expansion under the ACA will lead to a crisis in funding for GME. On the commercial insurance side, hospitals have been able to negotiate higher rates from private payers to cover costs, with the emergence of the Exchanges and Medicaid expansion, those days are coming to an end more rapidly than they otherwise would have. - CA will have up to 2.3 million additional people to insure by shortages that will become more acute. - The gap in differences between GME costs and payments on the federal side will only grow - Because of these concerns, the CA AMCs got together to develop solutions: - They came up with a 3 part model for working through sustainability issues: 1) advocacy with state and federal legislators- forcing the issues of workforce requirements and access and linking these to GME (not GME alone) 2) pursue pilots and adopt new and innovative training models in an ambitious way: CA would be aspirational and become a center of innovation and find ways to make training more cost efficient and attuned to new care models and get funding for that. 3) long term goal is to identify new sources of funding: all payer or non-health care related levy (e.g. tobacco tax) Statewide Educational Consortium will be the vehicle for moving the initiative forward. Will be a public/private partnership model with foundation and grant support.

2 Institutional focus needs to change from training individual doctors to improved health for the state. This would be a substantial change and we need to come together as collaborators- have to partner with institutions and be smarter about educational landscape. Look at 3 areas: 1) access- we have access problems because of distribution problems 2) care delivery model redesign- because current care model that is physician/hospital centric is not likely to bring additional health to underserved areas. Students won't choose practices where care model is untenable- it is not just about salary and medical education debt. Physicians can help design a model that will allow them to be successful in their profession. If physicians could oversee the care of a wider population, one could address access issue more urgently 3) stewardship- who does medical education cost too much for? This isn't solely about decreasing tuition, it is also the hospitals, the medical schools, and the government that are paying - We need to see how innovations work in the real world and rethink the way we evaluate success and design of innovations - Scalability is important- we need ways to accelerate the number involved in pilots. We need a rich mixed methods approach Group Discussion - Primary care needs relief from the current regulatory burden. If this could be relieved it would be more palatable and people would make more money and the profession could become more attractive - Idea from Atul: if you think exchanges are driving this and we are talking about building a different workforce: we could propose to the Exchange that in return not giving more on the GME side, we could test an alternative approach to caring for patients and keep the savings from adopting telemedicine or moving to less faceto-face visits with physicians and increased use of NPs and other health care professionals. The savings could then be used to help cover the costs of GME

3 - Catherine: another substantial issue we are addressing is accrediting - people fear coming against accreditation regulations- AAMC can help collaboratives to get waivers - ACGME and LCME will be open to creative concepts - Q: Is it possible that carving out a portion of the federal matching funds from Medicaid expansion dollar in CA would provide a new source of funding? - A concern CEOs have about GME is that you have to articulate value of GME compared to all other costs. If hospitals are over the cap and that comes out of operational dollars, at end of day, you are competing locally for GME dollars - Another way to look at GME is to look at the longitudinal workforce issues - Justifying GME slots is one thing for the ER where residents are less expensive than having NPs, but it is unclear to the medical system why they should have family medicine, internal medicine (PC) residents - One way to justify is that it is important to have a GME program to recruit doctors and get them to stay, but explaining that value (which is a 10 year process) is challenging - Innovation linked to care model as a means of creating near term access improvement: if can we move toward one doctor supervising 4 NPs, the cost footprint is lower than 5 physicians. Innovation helps because we can say we are addressing PC with an effective team based approach - Another possibility is hospital system deals where they pay hospital to have residents in their environment. If other providers benefit from pipeline they should share in the costs. This could help them recruit and retain in their pipelines too - GA commissioned one year review of all GME programs and workforce issues. 16 hospitals in GA participated in a training which resulted in connecting with hospitals virginal for training. Working through the MCG Board of Regents resulted in the legislature providing $22 million in carrot money for new programs. They engaged new hospitals and this should result in 400 new residency slots - Atul: This is similar to what is going on with the University of South Florida where there is a goal to convert non-teaching hospitals to new teaching hospitals - There are emerging PC training programs in which an AMC manages for a contracted fee. The new teaching hospital ultimately owns the cap positions they build over the 5

4 year cap building period, but the process will be fully funded and the AMC completely manages them so they don't have to build the infrastructure. The AMC would charge 15% of the PRA, but would do it because of interest in their pipeline. - The idea is virginal institutions as sites for residency- develop a cohort and develop a referral basis - An issue for GME is that no one can agree what the end game should look like - Enders: another funding stream considered was a premium tax, but we don't want an adversarial position with the insurer community. To get to the endpoint, insurers have to be part of the dialogue. We can work with insurers. If we get a tax, though, they will never pay 200% of Medicare rates. As a result of anxiety, there is no dialogue. - Enders- an issue is there is no central source of data about what state the needs in the way of workforce - Ohio is trying to fix this by creating database on licensure - People seem to have an easier time looking at the extent to which we meet the needs of the community that needs help. It is not about x number more doctors, rather there is a need to make sure 80% of people who want to see a doctor can see one. - The goals are outcomes and quality metrics. - Incorporate population health - get to communities of solutions. - Catherine other things they have talked about- loan repayment models, shortening training: could look at whether general surgery needs to be 5 years Jeff Gold University of Toledo- discussed Ohio legislation to repurpose Medicaid GME dollars GME funding issue - 7 medical schools in Ohio: 6 allopathic 1 osteopathic Way GME funded in State of Ohio: state pays a share of instruction and there is a clinical teaching subsidy. For the 2014 budget, they want to redirect the $200 million spent on GME and $45 million on UME. The state asked the Council of Deans to reengineer GME funding and draft language to be inserted in the legislation Here is how they are doing it:

5 1) working around ensuring separation b/w Medicaid funding lines and higher education funding lines- if lines blurred, both are vulnerable 2) deliver outcomes quantifiable with metrics that can be explained in legislation 3) outcomes- they want to retain Ohians in the physician workforce, rebalance specialties with the idea of increasing PC, but they will make the determination based on a 2009 workforce study, balance the geography - trying to create a set of outcome models and metrics using existing data that can be benchmarked to national norms - they are proposing this next week to make legislative deadlines - harder decisions- that the 7 medical schools are struggling with: 1) balancing mission- not all want to produce 100% PC physicians 2) creating metrics 3) willingness to open the box to accountability and workforce product- accepting accountability for quality makes us vulnerable % of advocacy has been to leave the accountability box closed and ask for more sources of funding, but the clear message is there are no new dollars and we need to repurpose 4) single top down model or diverse number of models and see which are most successful- legislature wants single model that can be modified 5) sustainability- annually legislated funds- this could be like the oxymoron of VBPdecreases compensation and dials down sequentially and this can be the same. The legislature could be using metrics to reduce spending on GME in other areas 6) accountability- we know how DGME is spent but IME not so clearly tracked- creates element of transparency- balance between transparency and sustainability 7) deliver what the legislators are asking for or what we think we need- the final analysis of workforce needs are not really their perceptions of it. - Enders- if a goal is to retain more Ohioans- what is the programmatic emphasis? - Gold: they will use an algorithm to get a position score b/w 1 and 100 and the closer to 100 the more likely they get a share of the $200 million- also proposing to incentivize residents into the program- would stipend them from time they enter match:$50k to reduce their med school debt- would make LCME very happy to reduce debt for a

6 cohort of students. If that resident didn't go into primary care specialty but instead went into specialty training-would convert to market rate loan that they could work off or buy their way out