Abstract
The issue of the necessity and value of Graduate Medical Education, also known as GME, is a matter of studies and researches on the local levels. The economics of such phenomenon as GME is pretty complicated and has lots of positive impact. GME is extremely expensive as it is held nationwide. Medicaid is the main program that finances GME, with funds being delivered on both federal and national level. GME allows controlling the number of physicians and avoiding shortages. It creates conditions for saving recruitment costs that can be redirected to patient care needs, increases patient care quality and improves care coordination. It has a job creation effect, requires engagement of additional medical workers and better care coordination. North Carolina also benefits from all the above mentioned factors due to high expansion of GME in the state, but experiences some challenges. The total number of medical workers that will graduate this year (41) is not enough to ensure that the state gets all economic benefits that it could have, if the GME was logical, balanced and coordinated correctly.
The issue of the necessity and value of Graduate Medical Education, also known as GME, is a matter of studies and researches on the local levels. It has been proved that planning of numbers of physicians and doctors of other qualifications is indeed beneficial for socio-economic development. On the local level every state benefits from getting the requested number of doctors and medical workers and people get that kind of treatment they need most (“Graduate Medical Education,” n.d.). However, the economics of such phenomenon as GME is pretty complicated and has lots of positive impact. At the same time, there are disputes regarding the level of professionalism that GME provides and the benefit that GME subsidies provide (O’Shea, 2014).
As Chandra, Khullar and Wilensky (2014) noticed, “a central health care-related policy question for the United States is whether the federal government’s role in financing graduate medical education (GME) increases the number of physicians trained and influences their specialty choices by subsidizing the cost of training.” Traditional graduate medical education program consists of education, research and provision of care and documentation by residents to patients. GME can be divided into direct (DME) and indirect (IME) medical education. Direct costs are more fixed and include salaries, bonuses, administrative and overhead costs, while indirect costs are more variable and mostly depend on the hospital. This makes GME extremely expensive as it is held nationwide (“Annual Report of Graduate Medical Education in Florida,” 2003, p. 17).
Medicaid is the main program that finances GME, with funds being delivered on both federal and national level (“Medicaid Graduate Medical Education Payments: A 50-State Survey,” 2013). It has been calculated that in such states as Montana and Indiana every trained physician generates $1.5-2 million annually, while his or her education costs account to almost $1 million (“Graduate Medical Education (GME) in Montana: Key Issues” 2016). The situation in North Carolina could have been same, if GME was balanced in the state. Moreover, among other benefits of the program, GME allows controlling the number of physicians and avoiding shortages. Due to hiring of residents, it creates conditions for saving recruitment costs that can be redirected to patient care needs. It increases patient care quality and improves care coordination. Job creation effect equals to nearly 5-6 additional jobs in the community. For North Carolina it could create a positive move towards improvement of employment situation. GME also requires engagement of additional medical workers that leads to appearance of demand in additional medical workforce. Better care coordination may allow the community to save huge amounts of funds generated by taxpayers that previously were needed for unnecessary hospitalizations (Umbach, 2014, p. 5-6). Such benefits are achievable by any state that implements GME wisely.
North Carolina also benefits from all the above mentioned factors due to high expansion of GME in the state, but experiences some challenges. It is said that “residency training occurs at ten major cities in North Carolina” (Fraber, Spero, Lyons & Newton, 2013, p. 2). However, the full positive economic impact of GME cannot be achieved due to a lack of residents in training per population. The state relies more and more on the physicians coming outside the state. Moreover, the economics of GME in North Carolina is negatively influenced by the fact that very few trained physicians remain in-state after completing the course. The returns of the program seem to depend more on subspecialty; however, the rate of return is hard to estimate (Both, n.d., p. 7-8). It all certifies that North Carolina’s graduate medical education is imbalanced, that causes its lack of effectiveness and leads to some shortages in rural areas (be Bruyn, 2015). Therefore, the total number of medical workers that will graduate this year (41) is not enough to ensure that the state gets all economic benefits that it could have, if the GME was logical, balanced and coordinated correctly.
References
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