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Finance Cases

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How Do We Fund New GME Programs?

The Client

Germane Solutions was contacted by a large health system to develop a GME strategy to address the growing physician shortage and its difficulty in hiring and retaining high-caliber physicians.

The Challenge

The health system had many opportunities to develop new GME programs at smaller, non-teaching hospitals, but their flagship teaching hospital had previously set its GME funding cap(s). Without new funding, GME is an expensive proposition for many health systems due to the investments required to support quality programs. The health system was not interested in self-funding the new programs without CMS funding.

The Solution

Germane Solutions proposed a strategy to re-classify the hospitals as a Rural Referral Center and be designated as a rural provider. The Rural Designation Strategy allowed the flagship hospital to create new IME funding for newly accredited programs by the ACGME. Since there are limited options available to “capped” hospitals, this strategy was able to generate new funding for GME. New IME funding will help to cover a significant amount of the costs associated with the programs.

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The Germane Effect

With the funding available through the Rural Designation Strategy, the health system was able to financially support new GME programs in Primary Care specialties and Fellowship training programs. The Rural Designation Strategy provides new funding to programs where no other option exists to do so. Should any additional opportunities for GME development be presented in the future, the rural hospital will have the option to create additional funding for all new programs they decide to pursue. This strategy helped reduce their anticipated costs of self-funding programs by almost 75%.

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