How much does Medicare give to train residents?

aProgDirector said:

IME is supposed to pay for the "invisible" costs of training residents -- not really defined but interpreted to mean wasted tests, inefficiencies, caring for uninsured patients, etc. IME is the larger payment, and is usually about 2x DME. DME is the same between all programs (I believe), but IME varies widely.

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There are people out there who think hospitals actually make lots of money from their residency programs. Is this not true?

docB said:

There are people out there who think hospitals actually make lots of money from their residency programs. Is this not true?

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I've had this discussion with many people. Heck I even tried to get a couple of program directors to actually write a paper on it and of course they didnt care (so much for trying to prove that the money the programs get is something they deserve.) I sense that the lack of papers on this subject is due to the fact that you're doomed if you do and damned if you don't. The articles would conclude one of the two accursed conclusions:

1) Residents make money for the hospitals big time (which makes GME think they should not be paying the hospital as much as they do now and thus cut funding).

2) Residents cost money for the hospitals big time (which makes GME think they dont want more expensive costs than what they already got, so they cut residencies).

So which option would you like your paper to support? Cut more money to the progam or cut more residents? Hmmmm.....

My personal belief is that hospitals are run by monkeys who have no idea what's good for them. Residents are a GOOD thing. Just imagine a PA replacing a resident... in the weekend.... late at night. Yup that oughta cost ya an arm and a leg. We will see this problem being remedied once more residencies close after they drop GME. Then we will see many more hospitals that will say "Well, we cant take care of triple bypass patients, they need to go to some more-medicare funded tertiary hospital. But hey if you just want a cardiac cath, we can do that here. Welcome aboard, but if ya bleed we might have to send you to that hospital anyway."

aProgDirector said:

I wrote my thoughts about this in a completely different thread here.

If you count only the direct costs of running a residency program, it will probably come out as a loss.

If you count the indirect cost savings, then it probably (for most programs) comes out as a big win.

Faebinder -- I'm happy to write this up, if you dare!

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I would think that this really depends on your payor mix. If you have a heavy indigent/Medicare mix then you make money. If you have a good payor mix it would make the hospital more money to replace residents with a provider that can bill. That is the hard of the indirect cost to model.

David Carpenter, PA-C

$110,000

core0 said:

I would think that this really depends on your payor mix. If you have a heavy indigent/Medicare mix then you make money. If you have a good payor mix it would make the hospital more money to replace residents with a provider that can bill. That is the hard of the indirect cost to model.

David Carpenter, PA-C

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That sounds like a pretty good assessment. It makes sense intuitively. But is it true? I've found that when the government is involved commons sense is more of an impediment than a help.

most residency programs are based at hospitals with poor payor mixes, hence it is better to have residents.

the best deal for hospitals are fellows. they can bill and they only get paid around 60k per year and generate big money. One other consideration is the lack of benefits for residents. Most RNs and PAs are employees and get full benefits. residents are usually classified as students or temporary and do not get the same benefits as real employees.

The whole arrangement is to the benefit of hospitals, medicare, and insurance companies. I trained before the 80 hr rule and did the work of 3 full time employees, maybe 4 when I was on every other night call.

mdjobexchange said:

the best deal for hospitals are fellows. they can bill and they only get paid around 60k per year and generate big money. One other consideration is the lack of benefits for residents. Most RNs and PAs are employees and get full benefits. residents are usually classified as students or temporary and do not get the same benefits as real employees.

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Depends on the training program; not all fellows can bill...none of us in fellowship together at UMDNJ-RWJ could bill; all discharge slips/clinic billing had to be completed by the attending despite the fact that we were BE or BC.

And again, the same is true for residents...where I trained, we got the same benefits as the rest of the hospital employees and since we made under $75K we paid the least into the system for it. Program dependent - my benefits were MUCH better as a resident than as a fellow at a different hospital.

Kimberli Cox said:

Depends on the training program; not all fellows can bill...none of us in fellowship together at UMDNJ-RWJ could bill; all discharge slips/clinic billing had to be completed by the attending despite the fact that we were BE or BC.

And again, the same is true for residents...where I trained, we got the same benefits as the rest of the hospital employees and since we made under $75K we paid the least into the system for it. Program dependent - my benefits were MUCH better as a resident than as a fellow at a different hospital.

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Very true. I noted that a lot of time becoming a fellow after residnecy can be an undercut of pay/benefits. On the other hand you may have more of a chance to moonlight.

tngdoc said:

How much does medicare give a program to train a medical resident each year?

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The actual number per hospital is not published. You might be able to file a freedom of information act request with CMS.

I have heard different figures ranging from $80K to 130K per resident.

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Good ballpark figure. On average something like 110k. The actual number depends on the number of residents in 1997, number of 'medicare beds', the perecentage of 'medicare patient days', average census, the gross national product of Benin and a 'fudge factor'.

What are the projections of future funding and how would that affect the number of positions?

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The number of total funded GME positions was capped at the 1997 level through the 1997 BBA (if a hospital wants to open a new residency, they have to carve slots out of another program or eat the cost). The total amount of funding is also capped and through the quirks of the rather byzantine funding formula DGME and IME payments have been dropping by about 5% every year since '97.
In the late 80s and early 90s, residencies where a veritable river of gold for the hospitals. Back then, they could get up to 180k per resident (remember, back then residents got somewhere around 25-30k p.a.). The BBA stopped that gravy train and at some point GME will start to become a deficit business for hospitals. So far, the free work and corporate welfare keep them in the business of training residents, once the number on the balance sheet turns red they'll give it the thumbs down pretty quick. So, I suspect in time for the projected physician shortage, the number of residency graduates will see a sharp drop.