Posts Tagged ‘budget’

Supercommittee’s failure leaves little time to avert Medicare cut

You’ve probably heard by now that the Joint Select Committee on Deficit Reduction, the “supercommittee,” failed in its efforts to reach a budget compromise. The 12 congressional lawmakers had until Thanksgiving to formulate a plan to trim at least $1.2 trillion in federal spending, and health care advocates hoped they’d also include a fix for the flawed Medicare payment formula, the SGR, in this plan.

This wasn’t wishful thinking; years of temporary fixes weigh heavily on the deficit. Plus, the committee had been granted special authorization to find and score savings wherever they could. Up until this point, insiders promised that committee members were seriously considering including an SGR fix, which would prevent a planned 27.4-percent cut in Medicare physician payment come Jan. 1. Not only is this cut still on the table, automatic reductions triggered by the supercommittee’s inaction will cut another 2 percent in Medicare payment in 2013.

A health care lobbyist told the Associated Press that “lawmakers of both parties wanted to deal with the cuts to doctors, but a fundamental partisan divide over tax increases blocked progress of any kind.”

In failing to act, they have “condemned millions of elderly and disabled Americans to continued health insecurity,” said AAFP President Glen R. Stream, M.D., M.B.I., in a statement. “This is no way to address the federal budget deficit. Nor is it the way to serve their constituents. Allowing the Medicare physician payment issue to fester worsens the health insecurity of millions of elderly patients and military families.” Read the full statement here.

With a little more than a month to go before the end of the year, there’s still time to pass another one- or two-year “doc fix,” and entering the 2012 campaign season, a short-term patch has wide support among Congressional lawmakers. But the question remains whether Congress as a whole can overcome the same gridlock that paralyzed the supercommittee.

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The super charge

Texas House Speaker Joe Straus, R-San Antonio, released the interim charges for the standing committees of the House of Representatives. As he said in the accompanying letter, these charges will set the stage for legislation considered during the 83rd Texas Legislature, which convenes in January 2013.

Of those that may affect family medicine, one assigned to the House Committee on Public Health stands out for its sheer immensity. It directs the committee to:

  • Examine the adequacy of the primary care workforce in Texas, especially considering: the projected increase in need (from an aging population and expanded coverage through federal health care reform), and cuts to workforce-building programs such as graduate medical education and physician loan repayment programs.
  • Study the potential impact of medical school innovations, new practice models, alternative reimbursement strategies, expanded roles for physician extenders, and greater utilization of telemedicine.
  • Make recommendations to increase patient access to primary care and address geographic disparities.

That about says it all, right?

Fortunately, TAFP is in a good position to positively influence the state health care reform discussion thanks to our members’ grassroots involvement through the TAFP Political Action Committee and the wise direction of big-picture strategists.

Because we’ve cultivated relationships with lawmakers, their staffs, and other capitol playmakers, they know the many benefits of primary care, family physicians’ concerns with the current system, and I’m convinced they even recognize the fonts and imagery on TAFP’s issue briefs. That means that we can actively work through the interim and the 2012 election cycle to proactively advance family medicine, and when the opening bell rings in January 2013, we’ll have laid the foundation to make substantial gains.

I invite you to use the comment section to give us your thoughts on any of the objectives above to give us direction as we move forward.

To the educators, what changes would you make to medical school curriculum that would provide the greatest benefit to the next generation of physicians?

To the innovators, actively experimenting with new practice models, what have you seen as the biggest barriers to controlling costs and providing the best care for patients?

To the rural physicians, what incentives are needed to draw more doctors to your area?

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With Texas health care in the spotlight, opportunities abound

As could be expected, Gov. Rick Perry’s decision to seek the Republican nomination for president has intensified state and national media scrutiny of Texas’ health care record, particularly regarding the uninsured, Medicaid, health care costs, and our medical liability climate.

TAFP has long been on record in our public positions—from “Fading Away” to “Fractured” to “The Primary Solution”—that starving down our primary care infrastructure and the continued fragmentation of care across the spectrum of settings  transcends moral concerns and translates into very real economic consequences that threaten everyone from local taxpayers to employers and families. We have been equally ardent in our position that a vibrant primary care delivery system operating in a healthy liability climate is the solution to the crisis facing our health care delivery system.

Armed with these resources, TAFP’s physician leaders, lobby team, and advocacy staff have routinely briefed top Texas political and health care writers, as well as legislators and their staffs, particularly leading up to and during legislative sessions. Now TAFP has been called upon for similar briefings and interviews by a rapidly growing body of national writers from media outlets as diverse as CBS News, NBC News, NPR, the Wall Street Journal, the Los Angeles Times, the Washington Post, the New York Times, the Boston Globe, Kaiser Family Foundation and Politico, the Hill, and others.

TAFP anticipates that over the course of the next year and possibly beyond, the national attention paid to Texas will only escalate. This creates an opportunity to continue serving as a national leader to explain the socioeconomic and delivery system challenges plaguing our system, but more important to trumpet the role of family physicians as vital to the solution.

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Developments in Medicare physician pay…plus the backup plan

Now that the 12 members of the Joint Select Committee on Deficit Reduction have begun meeting to develop a plan to trim at least $1.2 trillion in federal spending, advocacy groups and politicos have ramped up their effort to influence what goes on to and what stays off of the chopping block.

Since our last blog post, AAFP has taken significant steps to encourage the supercommittee to avoid making damaging cuts to Medicare and graduate medical education. AAFP met with representatives from seven medical societies and seven professional organizations on Sept. 7 to develop a unified strategy for the house of medicine, with AAFP still holding strong to the position that the SGR should be repealed or, barring that, the committee should enact a five-year Medicare payment fix that includes a 3-percent higher payment rate for primary care physicians.

During this week’s Congress of Delegates meeting, AAFP launched a grassroots campaign that calls for AAFP Delegates and other members to send a letter to their Congressional representatives asking for immediate repeal of the SGR. AAFP already sent its own letter to the “super 12” on Aug. 10 outlining its asks, and the 12 AAFP state chapters in which a supercommittee member lives requested meetings with their super person during the Congressional recess that extended through Labor Day. Texas is, of course, home to committee co-chair U.S. Rep. Jeb Hensarling, and Doug Curran, M.D., TAFP past president, current TMA board member, and constituent from Athens, has a meeting scheduled with the representative in the next couple of weeks.

Additionally, AAFP Board Chair Roland Goertz, M.D., M.B.A., of Waco said in an interview with Family Practice News digital network that the Academy will produce videos featuring “real family physicians who describe the real impact of these cuts for their practices,” in the hope that the videos go viral and incite larger action.

Most important, Goertz told AAFP members in the FPN video interview that physicians need to step up and take action. “Don’t go to sleep on this issue. We’ve been fighting this for 10 years. Don’t get fatigued about contacting those who represent you.”

“This is a big, big deal. A 29.5-percent cut in a payer source, particularly in Medicare, is going to put some practices out of business in some locations. So mobilize yourself, contact your elected officials, and if you feel comfortable with it, make sure you involve your patients because your patients are going to be the ones who unfortunately will suffer the outcomes.”

AAFP and other experts have acknowledged that the supercommittee may not address the SGR in their budget plan – because once again it may be too big an issue to tackle along with all of the other considerations. Hence, AAFP’s request for a five-year fix and 3-percent pay bump for primary care.

Another SGR-replacement idea released recently by the Medicare Payment Advisory Commission would implement a 10-year fix at a cost of around $200 billion. Though MedPAC’s plan would just replace one form of automatic payment cuts with different automatic payment cuts, it does include protections for primary care.

Kaiser Health News reports on their blog: “Reimbursements for primary care physicians would be frozen for 10 years, and specialists would see a reduction in payments for three years, at which time their rates would also be frozen.”

As Goertz said in an interview with AAFP News Now, “This is a game in evolution, and there are going to be some twists and turns.”

Hang on.

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Déjà vu all over again, the Medicare physician fee debate is back

Last month’s debate on the U.S. debt ceiling brought to light the ugly side of how we finance the nation’s operations, and as lawmakers move forward on a deal to reduce the deficit, they will inevitably turn their eyes to one of the country’s biggest expenses: Medicare. Federal spending for fiscal year 2010 totaled $3.5 trillion and Medicare comprised 15 percent of the total amount.

However, with crisis comes opportunity and a convergence of factors may make this the time to address a structural deficit in how the country pays physicians and other providers for the services they provide to Medicare beneficiaries.

Under the debt deal, a 12-member joint committee has until Thanksgiving to formulate a plan to cut at least $1.2 trillion in spending over the next 10 years. Then, recommendations made by the so-called “supercommittee” must go before Congress and pass by a simple majority in both chambers by Christmas. If the committee can’t agree on cuts or Congress fails to pass them, a series of across-the-board reductions would be triggered. One cuts pay to Medicare providers by up to 2 percent starting in 2013, which experts estimate would add up to around $12 billion.

While a reduction of any amount hurts, there is a bigger problem on the horizon: the Medicare physician payment formula, known as the Sustainable Growth Rate or SGR. Under the SGR, a across-the-board 29.5-percent cut would take effect on Jan. 1, 2012.

Every congressional budget cycle since 1997 has included a reduction in Medicare payments that has eventually been modified. Since 2002, Congress has stepped in 12 times to stop the cut, including four times last year. And each year that Congress provides a temporary patch, the price tag gets steeper. According to the AMA, if Congress were to wait until 2016 to eliminate the SGR, the combined price of providing temporary patches and fixing the structural problem would approach $600 billion.

Now it boils down to deficit reduction; if Congress doesn’t address the broken SGR in some way, it will continue adding to the deficit. This gives the argument to repeal the SGR strength it hasn’t had in previous years.

The real value of the supercommittee is that there are no restrictions on what they can recommend to cut or how it scores savings; its jurisdiction gives the 12 members the ability to find offsets for other spending in all areas of government. By virtue of normal committee jurisdiction, fixing the SGR—a Medicare Part B issue—would usually mean finding offsets only within Medicare Part B, and that hasn’t been possible without hurting the program. Similarly, the supercommittee could recommend federal medical liability reform and score those savings toward deficit reduction.  

Late last month, the American Medical Association and 10 specialty societies (including AAFP) sent a video to Congress on the need for full repeal of Medicare’s flawed Sustainable Growth Rate formula. At just over two minutes long, a combination of text and eerie techno-classical music sets the scene: “By acting now, Congress can preserve access to care for people on Medicare and reduce Medicare spending by hundreds of billions of dollars. Or it can put off a solution…again.” Weaving through charts and graphs, they make the golden deficit-reduction argument, ending with the final statement: “Stop digging the hole. Pay the bill. Repeal the SGR.”

[Can’t see the embedded video above? View here: http://youtu.be/jNmuyZWi3qc]

The AMA proposes a three-pronged approach: repeal the SGR; provide five years of stable payments with positive annual updates; and transition to a broad array of payment and delivery innovations.

AAFP outlined similar asks in a letter sent to supercommittee members last week. First, stabilize Medicare payments to physicians by repealing the SGR, and specify a payment rate for the next 3 to 5 years with a 3-percent higher rate for primary care physicians delivering primary care services. Second, avoid making reductions in Graduate Medical Education, especially GME payments for primary care education and training, to protect the physician workforce.

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Help wanted: Send us your ideas for the Primary Care Rescue Act

As a die-hard fan of the Texas Longhorns, I have no shame in telling you that after last year’s 5-7 record, I was glad the college football season was over. Even though I’m a self-admitted policy wonk and political news junkie, I was equally relieved—even somewhat jubilant—when the 82nd Texas Legislature finally closed up shop and went home. If you followed the frustrating struggle to balance the state budget without additional revenue, and witnessed the resulting cuts to higher education, public education, and health and human services, you might have been just as ready for it to end as I was. At least when they’re not in session, they can’t do any more damage, right? Now is not the time to bury our heads in the sand. In fact, the legislative interim is perhaps our best opportunity to formulate and articulate our most effective arguments for renewed investment in Texas’ primary care infrastructure. We can document the ill effects of the drastic reduction in state support for graduate medical education, especially in family medicine residency training, and we can illustrate the broken promise of access to primary care physicians for underserved communities made manifest by the 76-percent cut to the state’s Physician Education Loan Repayment Program.

And now is the time to begin preparations for a major initiative in the next legislative session. In the late ’80s, rural medicine in Texas was in terrible need of state investment. Health care organizations and advocates rallied around a broad set of goals encompassed in what was called the Omnibus Rural Healthcare Rescue Act, which the Legislature passed in 1989. The law created the Center for Rural Health Initiatives and the Office of Rural Health Care, and it contained tort reforms, benefits for rural hospitals, several reforms to strengthen the state’s trauma care infrastructure, and new recruitment and training programs for primary care physicians. Family medicine won funding for third-year clerkships, among other valuable reforms.

As our state demographics change, and following the decision of the 82nd Legislature to withdraw almost 80 percent of its investment in programs intended to increase the state’s primary care workforce, we believe primary care in Texas is in desperate need of something like that landmark omnibus package of reforms and initiatives. Let’s call it the Primary Care Rescue Act. Obviously we would want to include the restoration of state support for GME, especially the funds that go directly to family medicine residency programs through the Texas Higher Education Coordinating Board. Also we would include full restoration of funds for the Statewide Primary Care Preceptorship Program, and the Physician Education Loan Repayment Program. But what else should we include?

We wish to engage you—the membership of TAFP—in this endeavor from the very beginning. What state reforms would make your practice easier, more efficient, and provide better care for your patients? What kind of administrative simplification requests should we make in state programs? What about managed care reforms? Would a standardized pre-authorization process help? Standardized contracts? Real-time claims adjudication? What could the state do to make primary care more attractive to medical students?

The sooner we can begin to craft a set of reforms to use during the election cycle, the more likely our success becomes. Remember, politics drives the process that sets policy. That’s why we want to hear your ideas for the Primary Care Rescue Act. Use this space, here on the blog, to comment with your ideas, and we’ll pay close attention to the discussion. If you’d rather send us your ideas individually, feel free to e-mail me, Jonathan Nelson, at jnelson@tafp.org. Or you can e-mail Tom Banning at tbanning@tafp.org, or Kate Alfano at kalfano@tafp.org. However you choose to share your ideas, we are eager to hear them. The legislative interim can be a time filled with promise and hope, and it’s the perfect time to lay the groundwork for big initiatives in the next session. Let’s take advantage of that opportunity.

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Without investing in physician training, health care bill creates aims without the means

An important piece of legislation designed to improve quality and lower costs in our fractured and inefficient health care system has received a second chance in the Special Session after dying in the House when time ran out on the 82nd Texas Legislature. However, because of other actions taken by our legislators that defund primary care residency training and other programs to bolster the physician workforce now and in the future, Senate Bill 8’s laudable goals are left without the means to achieve them.

The overarching goal of S.B. 8 is to reverse the negative trend in our health care system, to bend the cost curve by testing and implementing various performance-based payment methods that provide incentives for improved patient outcomes. It achieves this through two key mechanisms: the creation of health care collaboratives and the creation of the Texas Institute of Health Care Quality and Efficiency.

As envisioned in the bill, health care collaboratives clinically integrate physicians, hospitals, diagnostic labs, imaging centers, and other health care providers, aligning financial incentives to keep patients healthy and out of the hospital and emergency room. They are designed to move the delivery system away from a fee-for-service based system—where physicians and hospitals are paid for quantity of services over quality—to one in which doctors, hospitals, and other providers are accountable for the overall care of the patient and the total cost of the care provided.

Mounting evidence supports improved outcomes and lower costs achieved through this type of coordinated care. It works because patients receive care from a medical team, led by a primary care physician, that integrates all aspects of preventive, acute, and chronic needs using the best available evidence and appropriate technology to ensure patients receive the right care, at the right time, in the right place, at the right value.

Equally as important is the Texas Institute of Health Care Quality and Efficiency, which provides a safe harbor from antitrust laws for hospitals, insurers, and physicians to experiment with alternative payment and delivery systems.

A dedicated institute emphasizes experimentation at the state and community level, further encouraging the testing of health care provider collaboration, health care delivery models, and coordination of health care services to improve health care quality, accountability, education, and contain costs in Texas. Through regulation and rulemaking, our state and its agencies can ultimately shape how reform occurs, and this legislation provides the necessary medium for trial and error, adjustment and adaptation.

It is no secret that Texas faces a severe physician shortage, especially among the primary care physicians who are uniquely trained to address a variety of disorders and chronic diseases across multiple organ systems. By 2015, Texas will need more than 4,500 additional primary care physicians and other providers to care for the state’s underserved population.

Over the past few sessions, the Texas Legislature has put in place several provisions designed to increase the number of primary care physicians in our state and to draw those physicians to the rural and underserved areas of the state that need them most. Our elected officials expanded primary care graduate medical education and training, implemented education loan repayments for primary care physicians, and supported medical student primary care preceptorships—each proven to make a positive impact on increasing the primary care workforce.

How easily these gains can be reversed. The 82nd Legislature took a giant step backward when it chose to cut state support of medical residencies by 44 percent, from $106 million in funding for the current biennium to $59.6 million in 2012-2013; slash loan repayment programs, allocating $5.6 million to one repayment program for the first year only and zeroing out another program set up to meet the needs of Texas children; and completely eliminate the Statewide Primary Care Preceptorship Program.

Texas’ 28 family medicine residency programs prepare about 200 new family physicians each year for practice and these programs manage primary care clinics that deliver well-coordinated, cost-effective care to communities that need it. A significant portion of the care they provide is for Medicaid and CHIP patients, Medicare patients, and the uninsured. Many programs already operate at dangerously narrow margins, often teetering on the brink of closure, and proposed budget cuts could be the final nail in the coffin.

Cuts to the loan repayment programs alone could affect up to 1.1 million Texans, by the Texas Higher Education Coordinating Board’s estimate. Because of lack of funds to recruit new physicians to underserved areas, 750,000 patients could see diminished access to care, and the 426,000 currently served by 142 doctors in the program would likewise have difficulties finding a replacement physician to care for them.

Studies of the preceptorship programs in Texas indicate that exposing medical students to primary care clinical experience early in their training, like that provided by the Texas Statewide Preceptorship Program, is an effective method of increasing the number of primary care physicians and expanding access to primary care in underserved populations. Not funding this program further deteriorates our state’s ability to produce the next generation of primary care physicians.

In addition to patient care, physicians contribute to the state economy, which can be of particular benefit to rural and underserved communities. A March 2011 study by the American Medical Association revealed that through supporting jobs, purchasing goods and services, and generating tax revenue, office-based physicians contributed $1.4 trillion in economic activity and supported 4 million jobs nationwide. And the study found that office-based physicians are unique in the health care system in that they almost always contribute more to state economies than hospitals, nursing homes, and home health agencies.

Without investing in an adequate primary care base our state will not have the network of physicians it needs to care for a population ballooning at both ends of the age spectrum, and health care costs will inevitably continue their unsustainable march higher.

All is not lost. Texas has a narrow window of opportunity to identify state-based strategies that will trigger dramatic improvements in our health care delivery system, empower patients to better understand their health care choices and responsibilities, increase competition in the insurance market, and lower overall costs.

Should S.B. 8 pass during the Special Session, its goals can be achieved eventually; the bill lays the foundation to re-engineer the fractured health care system to one that serves patients and bends the cost curve to make the system sustainable long term.

The 82nd Legislature fumbled on ensuring we have an adequate workforce to make these goals a reality, but we hope that future legislatures will recommit to primary care for the sake of Texans’ future. Because without the primary care physician workforce, the potential achievements of Senate Bill 8 are just hollow promises.

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The family physician’s role in smoking cessation

In testimony before the House Public Health Committee on March 2, Dallas physician John Carlo, M.D., put forth his support for a statewide smoking ban that would prohibit smoking in public places and workplaces. Advocates tried to pass similar legislation last session and failed, for various reasons. Now as it comes up again as House Bill 670 by Rep. Myra Crownover, R-Lake Dallas, and Senate Bill 355 by Sen. Rodney Ellis, D-Houston, public health groups are gearing up for another push.

Dr. Carlo said that physicians and the public at large have known conclusively since 1986 that secondhand smoke is dangerous to children and adults, and that there is no risk-free level of exposure to secondhand smoke. As medical professionals, you understand the biological explanation why secondhand smoke exposure causes damage to blood vessels and the heart. Study after epidemiological study demonstrates an increase in cardiac disease and mortality with increasing exposure to secondhand smoke.

While 33 Texas municipalities have passed some type of smoking ban in public places, including the largest cities in the state, many rural communities haven’t. Some say a smoking ban is an infringement on an individual’s right to smoke; others say it will hurt local businesses like bars and restaurants (which, by the way, isn’t true according to a January 2011 survey by Baselice and Associates, Inc.).

A March 1 press conference held by Smoke Free Texas and the Texas Public Health Coalition—of which TAFP is one of 27 members—highlighted several bills, including the smoking ban bills. Representatives spoke about the economic damages caused by tobacco use—that the annual direct medical expenses of smoking, loss of workplace productivity, and premature death cost Texas more than $20 billion. A report prepared for the American Lung Association showed while the average retail price of a pack of cigarettes in 2010 was $5.52, the actual cost to the Texas economy was $21 per pack—a heavy price. Find coverage of the press conference at http://www.tafp.org/news/stories/11.03.03.1.asp.

What do the physicians say? You know your patients better than anyone else. As a rural physician, what steps do you take to encourage patients to quit? Do you meet resistance from these patients? We’ll continue to follow this issue as it progresses. Tell us what you think.

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Texas can improve care and cut costs with the medical home

By Greg Sheff, M.D.

I was fortunate to be one in a group of primary care physicians who met with Lt. Gov. David Dewhurst this February to discuss possibilities of payment reform in Medicaid, the Children’s Health Insurance Program, and the private insurance market.  This meeting comes on the heels of the introduction of two major pieces of legislation, Senate bills 7 and 8.  These bills would implement a host of pilot projects to test bundled payments, payments based on episodes of care, and quality incentives.  It continues the positive momentum the state needs to move us away from a fractured health care system into one that provides the right care for Texans.

The unrelenting march of increasing health care costs is unsustainable, both for Texas and for the nation. Payment reform that aligns physician and hospital incentives with our society’s goals—affordable, coordinated, evidence-based, quality-measured care—is critical to rein in health care costs.  The patient-centered medical home, driven by a strong primary care workforce, is a proven cost-effective method for delivering this coordinated and integrated care.

Earlier this year, Austin Regional Clinic (ARC) joined a multi-year medical home pilot administered by Blue Cross and Blue Shield of Texas (BCBSTX).  The pilot was initiated in large part in response to Texas legislation requiring the Employees Retirement System (ERS), the self-funded insurer for state employees, to experiment with alternate payment and delivery models in an attempt to reduce the state’s ever-increasing health care costs.  We are one of five physician groups in the state participating.  Our program serves roughly 45,000 patients, including both the ERS (whose health care benefits are administered by BCBSTX) and BCBSTX fully-insured populations.

As we have seen with our ARC Medical Home Program, there is a definite tipping-point phenomenon in getting providers to commit the resources necessary to proactively coordinate patient care.  We have been approached by a number of payers investigating our capability to transform our care delivery model.  However, not until we were approached with a payer as large as ERS were we able to make a compelling internal business case for investing the resources to transform our own workflows.

For me, this is the real pearl in the ERS Medical Home initiative: The Legislature, with control of Medicaid, CHIP, and ERS/Teacher Retirement System payments, has the opportunity to change—not by mandate but by example—the cost of care delivered across Texas.

However, a primary-care-led health care system cannot exist without actively nurturing and growing the primary care workforce.  Since its inception, ARC has emphasized the importance of long-term doctor/patient relationships, coordination of care, and a strong primary care physician base—three major tenets of the medical home model.  Drawing upon ARC’s 30 years of experience, I cannot overstate the importance of supporting initiatives to increase the number of medical school graduates choosing a career in primary care.

Payment and delivery system reform for ERS/TRS, Medicaid, and CHIP patients, coupled with an investment in growing our primary care workforce, helps not only the Texas budget in the short and long term, but provides the seeds to transform all care in Texas.

Gregory Sheff, M.D., is the medical director for the ARC Medical Home Program.

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BCM on the closing of Kelsey-Seybold FMRP: “They just didn’t want to be in the education business”

The Senate Finance Committee has held hearings for the past two weeks on every section of the budget, and because so many primary care programs suffered cuts (as did most other programs), many interesting exchanges have come to light. In all the discussions, though, both lawmakers and those testifying agree that primary care is of the utmost importance to ensuring Texans’ access to care.

Because residency programs play such a large role in producing the primary care physician workforce, here enters Paul Klotman, M.D., president and CEO of Baylor College of Medicine. He testified during the Feb. 8 hearing of the Senate Finance Committee, and Sen. Bob Deuell of Greenville questioned him on the closing of the Baylor College of Medicine Kelsey-Seybold Family Medicine Residency Program. Here’s their exchange.

Sen. Deuell: A family medicine program closed. What’s your take on that?

Dr. Klotman: Our family medicine program is doing fine. [Person in audience speaks]. Oh, are you talking about Kelsey-Seybold?

Deuell: Yes.

Klotman: My understanding is they just didn’t want to be in the education business, that they didn’t want to continue to have residents there.

Deuell: Was that because of finances?

Klotman: They’re driven by patient care, they’re at risk now, they need efficiencies in their system. It’s hard. One of the challenges is working in the educational piece into efficient organizations, but I actually believe you can do that. It just needs to be done in an integrated way and I don’t think that’s their primary mission.

My understanding is they just didn’t want to be in the education business, that they didn’t want to continue to have residents there.

–Paul Klotman, M.D., President and CEO, Baylor College of Medicine

So why did the program close? It turns out that it was financial. As Jonathan Nelson writes in “On the Brink,” the cover story of the first-quarter 2009 issue of Texas Family Physician, it began in 2006 when the program’s primary teaching hospital, St. Luke’s Episcopal Hospital, cut support for the program in half.

That sent Baylor and Kelsey-Seybold FMRP scrambling to find new sources of funding, none of which were stable from year to year. By fall 2009, they agreed that the program was no longer financially sustainable. Kelsey-Seybold needed a subsidy from BCM of between $400,000 and $450,000 to keep the program viable. But Baylor, which has operated at a substantial deficit for the past several years, couldn’t save the program.

Baylor College of Medicine’s 2010-2011 appropriation for GME formula funding— money intended to support their affiliated residency programs—is $15.3 million. That’s $2.5 million more than they received in the previous biennium.

The program closing certainly wasn’t because of lack of interest from the faculty or the applicants. Again, from “On the Brink”: In an era when family medicine residencies only manage to fill 45 percent of available residency positions with U.S. medical school graduates, 97 percent of the recruitment classes at the Kelsey-Seybold program over the last three years graduated from U.S. medical schools. More than 600 physicians applied for the four open positions at the residency in 2009, and of the four chosen, two are from out of state. “I’m constantly bombarded with people that would just love to come to our program,” says Tricia Elliott, M.D., F.A.A.F.P., the residency’s program director.

Read the full article here.

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