Budget Cuts Make Educating Physicians More Difficult
An analysis by the Texas Medical Association Council on Medical Education shows that producing more physicians for Texas will now be more difficult after state budget writers carved out deep cuts at each level of physician workforce development and recruitment, including graduate medical education (GME), undergraduate medical education, and physician education loan repayment programs, for the two-year budget period from Sept. 1, 2011, through August 2013.
Texas lawmakers have provided support to medical schools since 2006 to help offset a portion of teaching costs related to training residents and to encourage the development of new GME positions. For the 2012-13 state budget, legislators took back $23 million, a 28.8-percent cut from the current budget. A possible mitigating factor was the $11.5 million in federal stimulus dollars in current one-time GME funding that legislators apparently decided not to replace with state dollars.
To provide better context for this funding, even the highest annual GME funding level by the state, at $6,237 in 2010-11, fell far short of the actual costs of training a resident. This excludes the 7.5-percent mandatory budget cuts to state budgets for the medical schools and health-related institutions during 2010-11. Institutions have discretion on where to make the cuts, and they may have been applied to the state GME formula funds. Faculty costs borne by medical schools for training residents are estimated to be at least $18,000 a year. State GME funding helped offset only around a third of these costs.
In addition to cutting the base rate for GME formula funding, the legislature greatly reduced its commitment to assist in the training of primary care residents, providing NO continued funding for three long-standing programs at the Higher Education Coordinating Board: the Primary Care Residency Program (established in 1995), the Graduate Medical Education Program (1996), and the Statewide Primary Care Preceptorship Programs (1978-95, varying by specialty) — programs that were all designed to support and promote the training of additional primary care physicians. The sole remaining program at the coordinating board — Family Medicine Residency — suffered a 74-percent setback, a loss of $15.6 million over the biennium.
Texas legislators also provided little assistance toward offsetting the $100,000+ per resident in annual GME costs incurred by teaching hospitals. This comes on top of the recent serious threats to federal support for GME through both the Medicare program and the children’s hospital GME program at the U.S. Department of Health and Human Services. The only state-designated GME funding to teaching hospitals is an estimated $30 million provided to the five state-owned teaching hospitals through the Medicaid program. This compares to the previous total Medicaid GME funding of almost $85 million in the 2003 budget, the last year the state provided this funding to all teaching hospitals.
When all state sources of GME funding are considered, legislators provided 40-percent less for GME in 2012-13 compared with 2010-11, for a loss of $48.3 million, from $121.5 million to $73.2 million. Supplemental appropriations to the health-related institutions provided in House Bill 4 could mitigate this loss to some degree, however.
Medical Student Funding
Medical schools also will receive less funding to educate medical students over the next two years. Legislators provided the lowest annual base funding level for medical students — $40,063 — since adoption of the current formula process in 1999. This fall, schools will receive $12,833 less per student, a 24-percent reduction over the prior budget. For further comparison, the fall appropriations come in at 28-percent below the peak funding level reached in 2002-03 when the legislature provided $55,971. Not only is 28 percent a steep drop, but this does not take into account inflationary factors affecting medical education over the past decade.
Medical School Enrollment and Campus Expansions
Texas medical schools have responded to external pressures to produce more physicians for Texas in response to the state's growing physician supply shortage. Medical schools added 930 medical students since 2005, up 17 percent for a total enrollment of 6,368 students in the 2010 academic year. At least two schools set new records just this summer, tying for the largest class size for a Texas medical school. Both The University of Texas Health Science Center at Houston and the Texas College of Osteopathic Medicine at the University of North Texas Health Science Center in Fort Worth admitted 240 new students in July.
Texas A&M and Texas Tech both saw sharp reductions in the state's support for their medical school campus expansions in the next biennial budget. Texas A&M's campus expansions in College Station, Temple, and Round Rock received 41 percent less, a total of $26.4 million for 2012-13, a drop of $18.6 million from the previous $45 million. The Paul L. Foster School of Medicine in El Paso, part of the Texas Tech University Health Sciences Center, will receive 24 percent less, down $16 million from the previous appropriation of $65.6 million. The supplemental appropriations in HB 4 that provide additional funds for institutional operations, including $21 million for the Texas A&M Health Science Center and $30 million for Texas Tech University Health Sciences Center, could alleviate these cuts.
State Physician Education Loan Repayment
The recent sweeping expansions to state loan repayment are effectively undone in the next budget. Medicaid's program for increasing the number of physicians providing services to Medicaid children was defunded, at a loss of $32.9 million. The other program, State Education Loan Repayment, suffered a 78-percent cut, dropping from $23 million to $5.6 million for 2012-13. The Higher Education Coordinating Board administers the program and has determined that sufficient funds are available to continue funding the 172 physicians who are already in the program for both years of the 2012-13 biennium. No new applications will be accepted.
Growing Physician Demand
The reduced support for training residents and educating medical students comes as Texas leads the nation in population growth:
- Texas added more people than any other state in the 2000 and 2010 national censuses, with high numbers among both the young (tied with Alaska for the highest birth rate in the nation in 2009) and the elderly — the two age groups with the highest demands for health care.
- In the U.S., baby-boomers are becoming eligible for Medicare at a rate of 10,000 a day and will continue to do so for the next 19 years.
- Although Texas has attracted a record-setting 21,000 new physicians to the state since adoption of the 2003 tort reform provisions, the state continued to rank 42nd out of 50 in the ratio of active physicians per 100,000 population, holding this ranking for the past three years. The best recent ranking was 38th in 1999 and the worst was 45th in 2004. Physician supply and population numbers are growing at about the same rate; hence, there's been little change in the ratio of physicians per population.
- An estimated 2 to 3 million Texans will become newly eligible for Medicaid in 2014.
Impact on Teaching Hospitals
Not only do the teaching hospitals face serious threats to federal support for GME costs, but hospitals are also making adjustments to staffing in response to the latest restrictions on resident duty-hours enacted in July by the Accreditation Council for Graduate Medical Education (ACGME).
In the wake of the cuts, at least two health-related institutions have announced staff reductions. The University of Texas Medical Branch plans to eliminate 250 positions, 120 from its hospital and 130 from the state prison health care program that it oversees for Central and East Texas. The University of Texas Southwestern Medical Center at Dallas also announced the reduction of 109 staff positions.
Even before the legislature took swipes at physician education and training budgets, a majority of Texas medical schools took bold steps to establish or pilot programs that will shorten the physician pipeline. The Texas Tech University Health Sciences Center Family Medicine Accelerated Track in Lubbock established in 2010 will prepare family physicians in six rather than seven years, while meeting all accreditation requirements. In addition, The University of Texas System recently announced a pilot program to debut in fall 2013 that will shorten the physician pipeline through a combined seven-year undergraduate and medical school degree. Both programs will trim time and costs.
Impact of Two-Year Budget Cycle
Medical education, residency, and loan repayment require funding beyond the state's two-year budget cycles. Commitments have been made to the additional medical students, residents, and physicians accepted into these programs during recent expansions, and continued funding is needed until each respective group completes their education, training, or service obligation.
Access to Care
The state's budgetary constraints are not influencing the number of new residents being added at a rate exceeding all other states. Unless commensurate increases are made in the size of the physician workforce, the concerns about access to care already present may be amplified at a similar rate of growth.
The TMA Council on Medical Education will continue to monitor these trends.
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