#ACGME2024 Session Summary: Deciphering GME Finances

March 19, 2024

As health care leaders navigate the complexities of graduate medical education (GME) program management, they are reminded of the interdependent relationship between financial sustainability and educational excellence. A clear understanding of GME finances leading to prudent financial practices allows institutions to ensure the continued growth and vitality of medical education.

In a dynamic question-and-answer format led by Bethany Figg, DEdT, MLIS, MBA, C-TAGME, director of GME at Central Michigan University College of Medicine-CMU Medical Education Partners, speakers in the 2024 ACGME Annual Educational Conference Featured Plenary, Deciphering GME Finances: Navigating the Complexities of Medical Education Funding, engaged a highly attentive audience of designated institutional officials (DIOs), program directors, and coordinators, highlighting the critical role of understanding GME funding in effective program planning and management.

ACGME Chief Financial and Administrative Officer and Executive Vice President, ACGME Global Services John Ogunkeye, MS introduced the panel and the session, which provided a comprehensive overview of funding for GME, as well as a review of common funding sources, the Centers for Medicare & Medicaid Services (CMS) “cap” on GME funding, and various CMS funding streams.

At the heart of the discussion were the myriad funding sources that sustain GME programs. Douglas McGee, DO, FACEP, vice dean for GME at Thomas Jefferson University, explained the direct graduate medical education (DGME) funding structure, emphasizing its reliance on Medicare reimbursements based on resident utilization, as well as how indirect medical education (IME) funding, though challenging to quantify, constitutes a significant financial component.

The panelists’ insights debunked the notion that hospitals are solely responsible for funding GME programs, and corrected a common misconception that government funding alone supports GME. They pointed out that those involved in GME make significant indirect contributions from mechanisms such as relatively lower salaries at universities than in private practice and residents working extended hours for modest pay.

Mary Jo Wagner, MD, DIO/CAO at Central Michigan University College of Medicine, emphasized that GME funding is a shared responsibility, with hospitals, universities, and taxpayers contributing indirectly.

A pivotal aspect discussed was the cap imposed on GME funding in 1997. While intended to curtail residency growth, the cap actually represents a limit on dollars available rather than residency complement. The speakers stressed that the cap is only one factor that should be considered in thinking about GME finances and complement size. The session also highlighted the impact of curriculum design and programmatic decisions on funding. The speakers noted that meeting accreditation requirements is a top priority, and attendees were urged to prioritize curriculum development over financial considerations, striking a balance between educational quality and financial viability. Innovative strategies, such as Protected Learning Activities and seeking redistributed slots, emerged from the discussion as effective avenues to optimize GME funding. The panelists stressed that curriculum must always come first, stating that good curriculum should always take priority over getting reimbursed.

The dynamic nature of GME funding, influenced by changes in health care policy, shifting demographics, and political dynamics, underscores the importance of staying abreast of evolving trends. Despite the challenges posed by funding constraints and ambiguities, the imperative to make informed financial decisions remains central to the mission of medical education institutions. The audience was reminded that making smart financial decisions is a part of the mission of GME programs, and a critically important component of their duties as GME leaders.

The panelists pointed out that understanding GME finances is not just a matter of fiscal responsibility; it is a fundamental prerequisite for ensuring the success of medical education programs and, ultimately, the quality of patient care. Through collaboration, innovation, and a commitment to financial stewardship, they advised, stakeholders can navigate the complexities of GME funding and pave the way for excellence in health care and GME education.