Restructuring the graduate medical education (GME) funds from Medicare is a necessary step in order to meet the evolving health-care needs of the country, according to a report from the Institute of Medicine (IOM).

“This funding is essentially guaranteed – regardless of whether the funded programs reflect local, regional or national health priorities,” wrote Jill Eden, MBA, MPH, of the Institute of Medicine, and colleagues.

The continuing shortage of primary-care providers, poor geographic distribution of practitioners, and a lack of diversity in the workforce are still persistent problems that the current GME funding system has not addressed, according to the investigators.

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More than $15 billion in taxes were used to support residency training in 2012, and 17.5% more physicians were in residency training in 2012 than 10 years earlier, according to the researchers. The report calls for a reallocation of the funds used for the GME system by 35% in order to supply grant funds for other areas of the health-care industry.

Improvements to the current GME structure include developing a GME policy and regulation system, building a Medicare fund which would be partially allocated to finance new initiatives, and keeping GME funding at the state level.

Although the IOM report focused GME funding for physician training, PAs and NPs were referenced in the report, particularly in regard to their evolving roles in primary care under the Affordable Care Act.

In 2009, 6% of the Medicare GME budget went to nursing education costs, reported Linda Aiken, PhD, FAAN, FRCN, RN, and colleagues in a study published in Health Affairs. The ACA allocates a small percentage of the Medicare GME budget to support PA education in primary-care settings, according to the HRSA website.

“An expanded primary care role for physician assistants and advanced practice registered nurses, redesign of care delivery and other innovations in healthcare delivery, such as telehealth and electronic communication, may ultimately lessen the demand for physicians despite the aging of the population or coverage expansions,” the researchers wrote.

The Association of American Medical Colleges (AAMC) has criticized the IOM report in a press release, stating that “the IOM’s recommendations will slash funding for vital care and services available almost exclusively at teaching hospitals. In addition to hurting patient care, these cuts will limit critical training settings for future physicians, nurses, and other health professionals.”


  1. Aiken L et al. Health Affairs. 2009; doi:10.1377/hlthaff.28.4.w646