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Department of Health and Human Services
Council on Graduate Medical Education


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Designated Federal Officer (DFO) - Kennita Carter, MD

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Summary of Ninth Report

Graduate Medical Education Consortia: Changing the Governance of Graduate Medical Education to Achieve Physician Workforce Objectives

June 1997

Executive Summary & Recommendations

The United States faces an overabundance of physicians that will extend well into the next century, most of the excess being accounted for by certain categories of specialists and subspecialists. At the same time, policy makers, the managed care industry and leaders of academic medicine express concern that the traditional medical education system is not providing all the competencies necessary for the effective practice of medicine in the modern health care market place. More training in ambulatory care, more community-based physician role models and more interaction with other health care professionals are increasingly advocated.

The physician workforce is the product of a large and heterogeneous enterprise-an enterprise that has been slow to change in the past and which has yet to achieve consensus on how to reshape itself for the future. At the core of this heterogeneity is a broad and complex mission involving health care, biomedical research and medical education. More than mission complexity, however, reform is hampered by the absence of an integrated system of governance for medical education.

Fragmented governance is a particular problem at the level of graduate medical education, where hospital executives, clinical service chiefs, medical school deans and academic department chairs often represent different constituencies, and have to respond to a confusing plethora of accrediting and certifying bodies and other professional organizations. The increasing emphasis on education in ambulatory care settings, puts further stress on the present system of governance.

In order to teach those competencies necessary in a managed care world and to contain health care costs, multiple health care provider and planning organizations must be involved. The day when medical education could be confined to one entity, the university hospital or its surrogate, has passed. Once said, then new systems for addressing physician workforce issues, for the measurement and maintenance of educational quality, for the administration of educational programs, for allowing input from the various stakeholders, and providing for an equitable distribution of resources are both reasonable and necessary. In principle, the consortium concept fulfills this need.

Mutual partnerships and collaborations have long been an essential element for successful medical education, and consortia provide a means of perpetuating, and where necessary expanding, such interactions in the future. Consortia presently occupy the middle portion of the spectrum of entities involved in graduate medical education, bridging the territory between traditional affiliations and acquisitions or mergers. Consortia differ substantially from affiliations, which imply no formal organization or collaboration beyond that stipulated by the agreement, are typically bilateral (rather than multilateral), and are usually negotiated independently with each partner (rather than collectively among a broader range of partners). Consortia also differ substantially from acquisitions or mergers, which lead to the formation of a single organization (rather than a cooperative alliance of institutions with shared interests) and imply a pooling of all assets and a surrender of fiduciary control (neither of which occurs during the formation of a consortium).

Two recent national surveys of graduate medical education consortia conducted by the Association of American Medical Colleges in conjunction with the Maine Medical Center in 1993 (MMC/ AAMC Survey) and the Center for the Health Professions at the University of California, San Francisco in 1995 (AAMC/CHP Survey) have indicated that consortia do provide a framework within which medical education, especially graduate medical education, can be critically examined and an equitable forum within which all interested constituencies can participate. Indeed, existing consortia can point to enhanced working relations and management efficiencies with justifiable pride.

Achievements: Improved Administration Working Relations
Internal Relations
Teaching hospitals
Medical school(s) and hospitals
External Relations
Community physicians 1
GME program sponsors/payers
Regulatory agencies
Managed care organizations
53% 1, 67% 2
Achievments: Improved Administration
Organizational Efficiency
Coodination of salaries & benefits
Resident recruitment
Resident supervision
Resident evaluation
Supervising faculty evaluation
Training program evaluation
Coordination of UME & GME
Training site development
Accounting of GME funds
Costs of GME program administration
84%, 79% 1
60%, 55% 2

Percentages of consortia reporting improved efficiency. AAMC/CHP Survey - left column: data from consortia inoperation for at least two years.
MMC/AAMC Survey - right column: data from all responding consortia.

Salaries and benefits, respectively.
2 Derived from the responses to two separate questions.

UME, GME= undergraduate and graduate medical education

Source: MMC/AAMC & AAMC//CHP Surveys

However, despite an almost universal commitment to enhancing education, relatively few consortia have dealt with medical education in a truly comprehensive fashion. Nor have consortia, as a group, yet instituted changes that would be expected to influence the size, composition, geographic distribution or diversity of the physician workforce. Given that relatively few consortia control residency positions, or the resources that accompany residency positions, these findings are not entirely unexpected.

Achievements: Educational Enhancement
Trainee Attributes
Medical professionalism56%NA
Scientific literacy63%NA
Life long learning53%NA
Trainee Skills
Generalist Practice skills58%NA
Subspecialist practice skills29%NA
Interdisciplinary practice skills50%NA
Managed care practice skills35%NA
Health services research skills53%NA
Clinical research skills68%NA
Basic biomedical research skills35%NA
Educational skills63%NA
Educational Experiences
Ambulatory experiencesNA58%
Continuity of care experiences68%NA
Community-based education60%NA
Educational Environment
Curriculum design63%61%
Quality of resident applicant pool50%64%
Appropriate role models & mentors60%NA
Research environment63%NA
Overall Educational Outcome
Graduate medical education90%NA
GME training program accreditation85%61%
Undergraduate medical education80%NA
Continuing medical education60%NA
Other health care professionals35%NA

Percentages of consotia reporting improvement in the areas specified. AAMC/CHP Survey - left column: data from consortia inoperation for at least two years. MMC/AAMC Survey - right column: data from all consortia responding to the survey.
NA - not available; GME =graduate medical education

Source: MMC/AAMC & AAMC/CHP Surveys

Achievements: Workforce Reform
All physician45%122%2NA
All underserved areasNANANANA31%
Rural areas37%1NANANA
Inner cities33%1NANANA
Research Workforce
Health services researchers20%1NANANA
Clinical investigators35%1NANANA
Basic biomedical researchers17%1NANANA

Percentages of consortia reporting increases in the production of physicians of the types specified. AAMC/CHP Survey - left Column: 1consortia in operation for at least two years, 2 consortia in operation for less than two years. MMC/AAMC Survey - right column. NA = not available.

Source: MMC/AAMC & AAMC/CHP Surveys

Given this mixed performance, the question arises whether the widespread adoption of consortia would be an appropriate vehicle for reorganizing the presently fragmented graduate medical education system. In thinking about this, it is important to emphasize that the development of consortia is not a goal unto itself. Rather, it is a means to an end. There is no inherent linkage between the concept of educational consortia and either the quality of medical education or physician workforce reform. One can exist without the other, and one does not necessarily result in the other.

Nonetheless, COGME believes that the consortium concept provides the inherent organizational flexibility needed to draw upon the expertise of the broad and diverse group of stakeholders that, collectively, will be necessary to reorganize medical education. Further, COGME believes that appropriately structured consortia would provide the foundation upon which substantive physician workforce reform could take place.

Educational consortia are presently burdened with expectations and hobbled by the lack of real authority. It is unrealistic to expect consortia to improve the structure and governance of medical education and to align physician training with health care needs unless they are appropriately structured and have access to the resources to do so. In seeking to define how educational consortia could best serve as both a catalyst and a unifying force in reorganizing medical education, this report addresses questions of organizational structure, authority and responsibility, examines funding mechanisms and how educational resources should be distributed, and provides policy makers with a blueprint for action.

COGME believes that consortia should include medical schools, teaching hospitals and community training sites, and promote an interdisciplinary approach to health care delivery. To be effective, COGME believes that consortia must have local sponsorship authority and responsibility for graduate medical education, and access to the financial resources necessary to reform graduate medical education.

COGME supports a "shared responsibility" approach to funding graduate medical education, in which all payers of health care participate, and proposes that consortia be eligible to receive graduate medical education payments. COGME also proposes that graduate medical education payments be disbursed to training sites on the basis of actual expenses incurred. Finally, COGME advocates funding a series of consortia demonstration projects, establishing an appropriately constituted body to oversee the development of national standards for educational consortia, and enacting health care reimbursement incentives to promote consortium development.

Defining Educational & Workforce Outcomes

Organizations function best when they have a comprehensive vision. In the case of educational consortia, this vision should include a mission that is anchored by a commitment to providing each and every graduate with all necessary career-specific competencies. However, a focus on individual competency is insufficient: Consortia should also entertain a broader view of competence, one whose frame of reference is the physician workforce as a whole. Simply put, "workforce competence" requires that the overall process of medical education be organized within the framework of societal needs and expectations.

Consortia must recognize the need for a national workforce that, collectively, has relevant practice, research and educational expertise. Consortia must also recognize the need for a rationally distributed regional workforce with appropriate generalist and subspecialist practice skills. And consortia must also be responsive to social and political needs, championing the need for a physician workforce that reflects the diversity of the population from which it is drawn. Thus, although education should be a consortium's primary priority, its product must also be able to meet present and future health care needs.

Consortia, no less than any other academic constituency, will be asked to defend their "education template". This does not mean that consortia have to reinvent the entire process of medical education, assume all (or even most) of the responsibilities of their individual members, or usurp the prerogatives of accrediting or licensing bodies. Rather, consortia should function as umbrellas under which medical education is reorganized, acting as guardians of the educational environment and ensuring that their product has societal relevance. In these matters they should act for and on behalf of their members, already having organized and catalyzed the necessary internal debate and already having led the partnership to a collective, if not unitary, view of its future.

To do so effectively, consortia will need clearly delineated educational and workforce goals, a strong sense of national and community health care needs, and the inherent authority to better align education with present and future physician workforce needs. Perhaps not surprisingly, consortia with a mission that includes workforce reform as a priority, have been more successful in enhancing generalist practice skills and increasing the output of generalists than consortia that lack an explicit commitment to reshaping the physician workforce.

Studies of existing consortia have also shown that management efficiencies are achieved more commonly, and that the cost of administering educational programs is less, in consortia with a mission that explicitly identifies improving the administration of educational programs as an organizational priority. A commitment to management excellence and an efficient administrative infrastructure will almost certainly also be important determinants of the ability of consortia to advance medical education and reform the physician workforce.

With these considerations in mind, COGME recommends that consortia should:

  • Set explicit educational and workforce goals and evaluate their accomplishments:
  • Participate with local/regional health care agencies in determining health resource needs; and
  • Adapt programs in response to national, and state and community health resource needs.

Determining the Content & Assessing the Quality of Medical Education

Undergraduate, graduate and continuing medical education, though in many ways operationally distinct, nonetheless represent a continuum of educational activity. Indeed, "life-long learning" is an attribute that medical educators have long sought to instill at the earliest possible time in their students. Most would agree, too, that medical practice, research and education are inextricably linked, education being the vehicle that translates research into practice both within and across generations. Given this broad context, inherently multilateral organizations such as consortia are ideally situated to bring together the many disparate institutions and groups-medical schools, teaching hospitals, managed care organizations, community training sites, and so on-now required to educate physicians. Continued compartmentalization of the teaching functions of these critical resources can only be counterproductive.

Organizational membership not only presupposes mission but also provides insight into the feasibility of achieving stated goals. A goal to facilitate the transition from medical student to supervised practitioner (resident) makes little sense if medical schools and teaching hospitals are not present. Reshaping residency programs may be an unachievable goal unless hospital executives, deans, clinical service chiefs, and academic department chairs and can all be brought to agreement. A goal to enhance interdisciplinary approaches to health care delivery, makes little sense unless a broad spectrum of health professionals is sitting at the table. Likewise, plans to enhance ambulatory care training in community settings is unlikely to succeed without the active involvement of public health authorities and physicians in practice. Indeed, it is difficult to visualize a quality medical education program in the future that does not involve a variety of different constituencies, that is not collaborative in outlook, and that is not sensitive to the differences between its individual partners.

Medical schools have particular expertise in curriculum development and evaluation, as well as research and scholarly activities. Hospitals and community training sites have particular expertise in the art and practice of medicine, and are required for both undergraduate and graduate medical education. The consortial model would provide for a free interchange of ideas, for resource sharing and for the coordination and strengthening of programs. Already common in university-based or affiliated residency programs, consortia could also extend the incalculable educational and mentoring benefits of different levels of students working closely together to residency programs not presently so endowed. Consortia could also help to translate the full potential of medical student-resident interactions, already so important in the inpatient arena, to the ambulatory care environment as well.

Consortia could also serve as a vehicle to maintain an appropriate balance between education and clinical service--between the resident as "student" and the resident as "employee". This may be particularly important where overlapping, and therefore potentially competitive, health care delivery systems form the operational matrix of a consortium. In such circumstances, the consortium should assume the primary responsibility for delineating just how a common educational mission will interface with the different delivery systems involved.

Given these considerations, it is not surprising that almost all existing consortia include allopathic or osteopathic medical schools. Although some in the medical education community have expressed concern that medical schools (or large academic medical centers) would inevitably dominate consortia, many existing consortia appear to function democratically and in most cases the other partners do not feel dominated by the medical school. Moreover, the majority of the country's allopathic graduate medical education programs already have substantive relationships with the nation's medical schools. In the osteopathic community, similarities have recently been extended and codified by the approval of a new graduate medical education accreditation system that requires all Osteopathic Postdoctoral Training Institutions (essentially consortia of different graduate medical education sites) to contain at least one school of medicine.

Thus, consortia should ensure that the training environment is sufficiently broad to encompass all elements of graduate medical education and, where appropriate, undergraduate medical education as well. Towards this end, the training environment should be carefully evaluated, and enhanced where necessary. Medical professionalism, scientific literacy and a commitment to life long learning are the foundation of medical education, but the curriculum must also provide graduates with the ability to practice effectively in the modern health care environment. Generalism should be fostered, specialist practice and procedural skills enhanced, and the research and educational expertise of the physician workforce assured. The recruitment and promotion of women and minorities should be given attention and the problem of the medically underserved in rural and inner city areas should also be addressed.

A central element of this model is that the consortium, acting collectively, should have overall responsibility for graduate medical education, channeling reform in appropriate directions, even though its individual members will remain the agents of the educational process itself. The model assumes that medical schools will retain primary responsibility for undergraduate medical education, but that consortia, rather than hospitals or any other group, institution or organization involved presently or in the future in training residents, will have primary responsibility for graduate medical education. Such an approach is intended to strengthen and reshape medical education by facilitating interactions between medical schools, hospitals, community teaching sites, managed care organizations, and the like. Mutual interdependence, rather than the dominance of any particular partner, is the goal.

To function in this fashion, consortia must have the authority to reorganize graduate medical education within their local domain. Acting within the guidelines established by the Accreditation Council for Graduate Medical Education and the American Osteopathic Association's Council on Postdoctoral Training (and any other appropriate regulatory agencies), consortia must be able to set standards, to evaluate residency program quality, and to choose to sponsor some residency programs (but not others). Controlling the content of medical education should be the prerogative of the consortium rather than a right of individual partners, and the consortium should assume responsibility for the quality of all graduate medical education programs under its purview.

If consortia, like individual teaching hospitals presently, are to have the authority to reaffirm, and where necessary, remake their product, they must control the "currency" of graduate medical education-residency programs and positions. Present accreditation guidelines dictate that the official sponsoring institution for any residency program has ultimate responsibility for the conduct of that program. If a consortium, rather than any of its individual members, were the official sponsor, the consortium would automatically assume this responsibility. Duly constituted educational consortia are already accepted by both the Accreditation Council for Graduate Medical Education and the American Osteopathic Association's Council on Post- doctoral Training as legitimate graduate medical education sponsors. However, unambiguous policies that would facilitate the transfer of authority from individual institutions and programs to consortia would have to be developed.

Official sponsorship of residency programs by consortia could bring financial benefits as well. Studies of existing consortia have shown that the cost of administering educational programs is lower in consortia that function as the official sponsor of all graduate medical education programs under their purview as opposed to those in which individual members retain control of their own programs. Thus, official sponsorship of residency pro- grams appears to be an important determinant of administrative success. Moreover, an efficient administrative infrastructure will almost certainly also be a critical arbiter of the ability of consortia to advance medical education and reform the physician workforce.

With these considerations in mind, COGME recommends that consortia should:

  • Include medical schools and teaching hospitals;
  • Include community-based training sites;
  • Promote generalism and the competencies required for managed care practice:
  • Foster an interdisciplinary approach to health care delivery;
  • Have sponsorship authority and responsibility for graduate medical education; and
  • Serve as a vehicle for coordinating undergraduate and graduate medical education.

Receiving & Distributing Educational Resources

Given the present methodology for calculating Medicare direct and indirect graduate medical education support, which obstructs rather than facilitates the flow of payments to consortia and community-based training sites, it is understandable that such payments almost invariably are made to hospitals and that, for the most part, individual hospitals within existing consortia maintain their own graduate medical education revenue accounts.

Despite this, a number of consortia have established some measure of collective fiscal authority. About half of the consortia responding to the AAMC/CHP Survey, for example, reported that disbursement of Medicare direct graduate medical education payments was controlled by the consortium as a whole rather than by individual members. Consortia with such authority reported management efficiencies much more commonly than consortia in which payments were controlled by individual members, and the cost of administering educational programs was lower as well. Moreover, developmental and operational costs were more likely to be spread equitably across the entire membership (see p. 40).

It is hardly surprising that collective control of graduate medical education payments is a determinant of administrative success. Nor that partnership equity follows the provision of fiscal authority. It is also likely that the scope and nature of the financial authority individual members cede to a consortium will be a critical arbiter of the power of the organization and of its ability to reform medical education and reshape the physician workforce. After all, to be effective, consortia must have access to the resources essential to the conduct of graduate medical education.

Consequently, COGME recommends that consortia should:

  • Have either a prospective agreement on how to determine and distribute graduate medical education payments or a common graduate medical education accounting system;
  • Develop mechanisms to ensure that graduate medical education payments are disbursed to training sites on the basis of actual expenses incurred; and
  • Develop mechanisms to ensure that operating costs are shared equitably be all members of the organization

Graduate medical education is currently financed from a variety of sources, including Medicare, Medicaid, private insurers, and faculty practice plans, amongst others. However, with the exception of Medicare (and certain Medicaid programs), it has been difficult to quantitate the precise magnitude of such support or to determine whether "educational" monies are truly utilized for education. Because of this, as well as to provide a reliable and equitable financing system, medical educators (and some policy makers) are pressing for the establishment of a "shared responsibility" or "all-payer" system to finance graduate medical education. By ensuring a broad involvement of state and private sector medical insurance systems, together with Medicare, "shared responsibility" financing of graduate medical education would greatly facilitate consortium development, and COGME strongly supports such an approach.

The financing of community-based education is particularly troublesome because of statutory limitations on the direct flow of Medicare graduate medical education payments to health care delivery sites other than hospitals and fiscal disincentives that limit the ability of hospitals to channel Medicare graduate medical education payments to community-based ambulatory care sites. The capital costs of developing non-traditional educational sites and the negative impact of education on clinical productivity in the ambulatory environment raise similar concerns.

Legislation to allow the Health Care Financing Administration to direct Medicare graduate medical education payments to appropriately constituted consortia (and other organizations legitimately involved in graduate medical education) is long overdue. Ideally, such disbursement should not only include Medicare direct graduate medical education payments, but funds equivalent in purpose to Medicare indirect graduate medical education payments as well.

Indirect graduate medical education payments provide compensation for the additional inpatient costs incurred for the specialized services and treatment programs provided by teaching institutions and the additional costs associated with the teaching of residents, and have a vital role in maintaining the financial viability of teaching hospitals. However, such "additional costs" are not restricted to the inpatient environment alone. They arise in the ambulatory care arena, be it hospital clinic or community physician office, as well. As such, they are as worthy of support as inpatient educational costs, especially as the proportion of medical education conducted outside of hospitals increases.

Mechanisms that would resolve all these difficulties have yet to be identified, but both statutory relief and fiscal incentives for academic medical centers to shift appropriate educational costs out of the inpatient and into the ambulatory environment will be needed. As residents move to non-hospital training sites, the "additional costs" born by hospitals should decline. This should allow the transfer of an appropriate portion of Medicare indirect graduate medical education payments to consortia, with subsequent flow of these monies to the non-hospital entities actually incurring the costs of ambulatory care education. Without some mechanism of this sort, it is difficult to envisage how the substantial cost of education in the ambulatory environment could be addressed.

With these considerations in mind, if consortia are to have a role in restructuring the physician workforce, COGME recommends that:

  • Statutory limitations precluding the flow of Medicare graduate medical education payments to appropriately constituted educational consortia be eliminated;

  • The costs of developing and maintaining hospital- and community-based ambulatory care training sites be taken into account when adjustments in Medicare direct and indirect graduate medical education payments are contemplated;
  • If an all-payer system for the support of graduate medical education is enacted, appropriately constituted consortia be able to receive payments from all health care payers; and
  • The costs of developing and maintaining hospital and community-based ambulatory care training sites be carefully considered in any new system for financing medical education.

Providing Oversight for the Development & Assessment of Consortia

A viable consortium model must provide for a substantive role in defining educational and workforce outcomes, determining the content and assessing the quality of medical education, and receiving and distributing educational resources. Such a role is best assured by promulgating national standards for educational consortia. However, the development of standards is unlikely to proceed efficiently in the absence of an appropriately constituted oversight body.

Consequently, COGME recommends that:

  • An appropriately constituted advisory body, reporting to the Secretary of Health and Human Services, be empowered to guide the development of national standards for graduate medical education consortia;
  • These standards be directed at achieving national educational and workforce goals in an accountable and cost-effective manner; and
  • This advisory body also oversee the assessment of the effectiveness of consortia in achieving national educational and workforce goals.

In making these recommendations, COGME recognizes the importance of similar bodies already implemented or under consideration at the state level (for example, in New York and Tennessee), and encourages the joint development and implementation of standards for educational consortia by appropriate national, state and regional oversight bodies.

Defining the Organizational Structure That Would Best Serve Educational & Workforce Goals
(Consortium Demonstration Projects)

If consortia are to be an integral element of the graduate medical education system, it follows that they must be structured in a fashion that will enhance their effectiveness. This should not be taken to imply that there is a single "correct" model against which all consortia should be measured or even that presently available information allows prediction of the "best" model. Nonetheless, there are certain characteristics that should be imbedded in any consortium, no matter how its developers intend to merge or restructure their individual organizations.

To justify public support, consortia demonstration projects must be committed to providing a cost- effective administrative framework within which education and workforce reform can occur. In return, all payers of health care services should provide the funds necessary to ensure successful completion of the project.

To delineate how consortia might best be structured to achieve national, regional and local educational and workforce goals in an accountable and cost-effective manner, COGME recommends that:

  • Funds be provided for twelve consortium demonstration projects;
  • In the absence of enactment of an "all- payer" fund for graduate medical education, the federal government provide these funds, but the states and private medical insurance sector be encouraged to provide matching support;
  • Funds be awarded on the basis of a peer reviewed, competitive process;
  • Four projects be initiated each year in fiscal years 1998, 1999 and 2000; and
  • Each project be funded for an initial period of three years, with the opportunity for renewal for an additional two three-year periods, for a total of nine years.

To promote innovation, the financial risks inherent in these projects, especially in altering the size and composition of graduate medical education programs, should be reduced. Neither the consortium collectively, nor its individual partners, should stand to lose graduate medical education payments during the demonstration period. However, any "hold harmless" provision should be made contingent on the consortium agreeing to a "workforce contingency"; that is, agreeing to restructure its training programs in a defined fashion.

With these considerations in mind, COGME recommends that:

The consortium as a whole, and its individual members, be held "financially harmless" (Medicare direct and indirect graduate medical education payments, and if possible state and private sector graduate medical education payments as well, be guaranteed at their respective levels the year prior to the award) for the duration of the award, but only provided that the consortium agrees to predefined standards for changing the size and/or composition of its residency training programs.

Demonstration project funding could also contain incentives to ensure certain organizational structures (for example, the transfer of official sponsorship of residency programs from individual members to the consortium) and to promote physician workforce policy goals (for example, increasing the proportions of generalist, women and minority residents, increasing the number of graduates practicing in Health Professions Shortage Areas, and so on).

Promoting Educational Consortia

Determining how educational consortia might best be structured will likely prove a more simple task than promoting their widespread implementation. Consortia are still relatively rare. One reason for this is that, for the most part, policy makers have yet to devise financing methods that favor, or even use, consortia. To promote the development of consortia, federal and state policy makers will have to provide appropriate incentives

Incentives to promote the widespread development of consortia could be modeled after those established by the consortia demonstration projects. At a minimum, these should include financial incentives that would enhance the composition, geographic distribution and diversity of the physician workforce. In addition, these incentives ideally should have a "shared responsibility" mantra, including defined contributions from all payers of health care services: Medicare, Medicaid and the private insurance industry alike.

Accordingly, COGME recommends that:

  • Federal and State governments develop health care reimbursement incentives for the organization of consortia that would achieve educational and physician workforce goals in an accountable and cost- effective manner;

  • Reimbursement incentives include Medicare, Medicaid and private sector graduate medical education payments; and
  • These incentives be phased in progressively over a period of 3 to 5 years.