TMA Letter: Improve GME Funding

May 12, 2014

The Honorable John Otto
Subcommittee on Article III, Chair
House Committee on Appropriations
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910 

Dear Chairman Otto:

We appreciate the opportunity to comment on Interim Charge #10 and the potential for moving state non-formula funding programs for graduate medical education (GME) into the state formula funding process.  As the subcommittee considers this element of the interim charges, we respectfully submit the following comments for consideration. This also presents the opportunity to discuss our state’s continuing need to expand GME training opportunities in response to escalating physician demand. 

State GME Funding  
Texas has been exceedingly successful in attracting new physicians to the state.  In fact, over the past decade, 32,000 new physicians have been licensed. Despite this significant milestone, our state still has a significant amount of catching up to do, mostly as a result of the state’s robust population growth over the past two decades. Texas continues to rank close to the bottom in a state comparison of physicians per capita, despite the number of new physicians.   

The state’s GME grant programs at the Texas Higher Education Coordinating Board are a big part of the solution to tackling our physician workforce needs. About two-thirds or $65.7 million of the state biennial funding for GME is generated through a formula process for the Health-Related Institutions. These funds are extremely important to the state in further building the state’s physician workforce by helping to offset at least a portion of a medical school’s cost of training residents. Funded at about $10,000 per resident for this biennium, these monies do not come close to offsetting the full cost of training a resident which is estimated to be well over $100,000 a year.

The remaining one-third or $27.05 million of the state’s biennial support for GME is allocated to the Texas Higher Education Coordinating Board outside of the state formula funding process. These monies support several GME grant programs, including: 

Family Medicine Residency Program
The oldest of the state’s GME grant programs, established in 1977. Currently funded at $12.8 million in biennial funding.  This program is an important lifeline to our state’s 28 family medicine residency programs. GME training follows the patients and in this case family physicians do the bulk of their training in ambulatory settings where this level of patient care is typically provided. Ambulatory clinics do not receive the same level of benefit from Medicare GME funding as hospital-based programs and this state program helps to offset that funding disadvantage for family medicine residency programs. 

Four New GME Expansion Grant Programs
With a combined funding of $14.25 million for this biennium, four new GME expansion grant programs each utilize distinct methods for facilitating GME growth in the state. Each is uniquely designed to facilitate partnerships with teaching hospitals and other collaborations, and to support a larger proportion of the true cost of training a resident, including some portion of the hospital-side of GME costs.  In contrast, the state GME formula funding system does not include any portion of GME costs for hospitals.  These four grant programs are in the early stages of development; more time is needed for these to be fully established and demonstrate their potential for success.  It would be detrimental to fold these into the formula funding process at such an early stage of implementation and the unique aspects of each program would be lost. 

GME Bottleneck
State funding for GME is absolutely critical for the continued efforts to expand GME training opportunities in the state.  Medical school enrollments have grown by 31 percent at Texas medical schools over the past decade while entry-level GME positions grew by 26 percent. This discordance will result in a GME bottleneck that will force some of our graduates to leave the state and take the state’s $168,000 investment in their medical education with them. Medical school expansions are not expected to be fully realized until 2018, hence there will a growing need for GME expansions through at least 2022.

Texas Higher Education Coordinating Board has a target ratio of 1.1 entry-level GME positions for each Texas medical school graduate.  This ratio provides an opportunity for our graduates to remain in the state for training and also provides a small additional number of positions for graduates outside of Texas and for physician specialty retraining.  Each of the state’s GME funding programs described in this letter must be retained to work towards achieving this goal.  

Thank you for the opportunity to provide comments on an issue that will impact the adequacy of our state’s physician workforce and future access to care.  We stand committed to assisting your subcommittee in addressing the interim charges however we can.


 Rodney B. Young, MD, Chair
Council on Medical Education

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Last Updated On

June 22, 2016