A Closer Look At Federal Funding For Residencies

I am writing to you regarding some misinformation that is contained within the editorial section of the August 2003 issue (see “Editor’s Perspective,” page 18, August issue). I am a residency director and consider myself fairly conversant with current residency reimbursement issues, that is to say how residency programs in general and podiatric residencies in particular are reimbursed from the federal government. For too long, the popular myth has been that residencies, in general, “make” hospitals money. It may be true that the presence of a residency may well encourage the medical staff of a given institution to utilize it more because of the residents. This in turn facilitates increased use of the institution by physicians and increased revenue for the facility. However, it is very often the case that the residencies themselves cost the hospital money. By the time the resident salaries, benefits and program expenses, etc., have been taken out, there is often not much left in the pot and the residency is no longer “making money” for the institution. There are exceptions to this, of course, and it is difficult to produce what a standard amount for a residency program is, even for two hospitals in the same city, given the complicated formula that is used to calculate which hospital gets what for each resident. It is certainly very incorrect to state, as in your recent editorial, that “even the smallest community hospital gets at least $100,000 per resident in GME dollars … .” Even the second figure quoted is quite a bit off for some institutions. In our hospital, the figure is in fact about $55,000 for non-primary care specialties and slightly more for primary care specialties. With the Balanced Budget Act of 1997 likely to negatively impact on these numbers for the near future, the prospects for some residency programs, podiatric and otherwise, are financially bleak. Once a residency has paid out fees to belong to its governing body (CPME in our case), other institutional fees (e.g. COTH) and possibly resident membership dues to a professional organization (even with corporate sponsorship, e.g. the APMA), there is very little left to sway hospital administrators about the financial value of something like PRESENT (Podiatric Residency Education Services Network) Residency Courseware. You are correct about one thing: “The key stumbling block may be the annual subscription cost of $1,500.” The point I want to make is that all residency programs need to be able to justify themselves to their hospital administrators today. By not being subject to the “cap” that exists for many resident slots, podiatry (and dentistry) have a lucky break. However, even with this, it is still not enough in many instances to allow a program to reach the break-even point. I believe the way forward for many residencies, particularly those such as podiatry that involve surgical training, is to expand their programs through hospital systems on a local level, which helps share costs and enhance resident exposure. Thank you for giving me the opportunity to discuss this very important issue in resident education. — Martin Yorath, DPM Director—Podiatric Surgical Residency Advocate Illinois Masonic Medical Center Chicago Editor’s Note: Dr. Yorath, thank you for your letter. Actually, I agree with you that there is a disparity of perception about how much federal funding there is for podiatric residencies, a point that I did make in the editorial. In regard to the numbers, specifically the phrase, “ … even the smallest community hospital gets at least $100,000 per resident in GME dollars,” I did attribute that to the organizers of PRESENT (see the response from Jay Lieberman, DPM below). The second number was attributed to one educator at a small community hospital who said the institution’s allotment per resident was between $74,000 and $110,000. This was one educator at one hospital. In the preceding paragraph, I noted that “One educator says getting the $1,500 subscription charge paid by GME dollars should be a ‘no-brainer’ yet others say the funding isn’t there at their facilities.” There is no question that there is a disparity of perception about residency funding and it certainly appears to vary per institution, points that are certainly made even clearer by your letter. Federal Funding For Podiatric Residencies Is Generous Jay Lieberman, DPM, the Editor of PRESENT Courseware, responds: Dr. Yorath, the Medicare program makes explicit payments to teaching hospitals for its share of the direct costs of graduate medical education. There are some disparities between the levels of reimbursement among different hospitals, depending mostly on the amount of Medicare utilization by the hospital. In most cases, the amount is generous and allows the hospital to provide a rich educational experience. A certain amount of the funding should be set aside for the educational materials required to run a residency program. A cost report is generated by your hospital each year. This report should demonstrate a commitment by the hospital to provide the necessary educational material for your residents. You are entitled to and should ask to see this report. Your evaluation of residency funding is wrong. Two-hundred ninety-five residency programs do not exist solely as a result of the altruism on the part of hospital administrators to educate podiatrists. Hospitals support residencies because it benefits them financially and adds to their prestige. The exact amount of monetary benefit is calculated by plugging readily available numbers into an equation that hospital administrators always do when they consider hosting a podiatric residency program. Our informal survey of at least 50 hospital administrators, 50 residency directors, college deans and representatives of the Council of Teaching Hospitals (COTH) demonstrated that the average federal funding of residency programs is much higher than the $55,000 that you believe your program receives. I’m wondering if you are aware of both the direct and indirect funding amounts that your hospital receives. The indirect funding helps to offset any expenses that the hospital incurs in hosting the residency program. COTH is probably the best source for this information. Residency directors and hospital administrators who have already ordered the courseware perceive it as a cost-effective way of imparting didactic knowledge to their residents. Compare a service like PRESENT courseware to the purchase of a few multiple volume orthopedic texts or sending your residents to an out-of-town seminar. The lectures are done by the most renowned and talented teachers in podiatry today. I believe the value is there. The reimbursement that your program received appears to be on the low end. Our goal is to make PRESENT courseware available to every resident in the country. We have already identified several programs that are in a similar position as yours and have made arrangements for reduced fees based on financial need. Editor’s Note: Dr. Lieberman is the Director of Podiatric Medical Education at the Northwest Medical Center in Margate, Fla. Clarifying The Value Of The F-Scan Mobile This letter is to provide clarification related to the “Scanning Mobility” write-up that appeared in the “New Products” section of the September issue (see page 84). This write-up represents F-Scan® and F-Scan® Mobile, two products manufactured and distributed by Tekscan. The edited write-up states that the F-Scan computer cables can be unwieldy and that they get in the way. To clarify, if customers follow the manufacturer recommendations, the computer cables do not disturb or get in the way during the event under study. Please note the F-Scan system was designed primarily for the assessment and evaluation of foot function and gait over short events. The F-Scan Mobile system was designed for the same data capture and analysis during much faster and longer events with no restriction to physical distance and mobility. Such events, which are now accessible for study with the F-Scan Mobile, include outdoor running, downhill skiing and during in-sport events, such as tennis and soccer, among others. — Norman Murphy, PhD Director, Product and Market Research And Development Medical Group Tekscan