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How Can GME Further Your Hospital’s Overall Strategy?


Every hospital has a strategic plan – what’s yours? It may involve enhanced patient safety, expanded services, increased innovation, or an expanded focus on quality. As hospital leaders plan for the future delivery of health services and patient care, they oftentimes do not consider one key player that can further even the most multi-faceted strategy – Graduate Medical Education (GME). GME is more than just precepting residents and fellows; it is an avenue for hospitals to deliver on their strategic plan in one fell swoop.

GME fosters an environment of clinical and educational inquiry, driving hospitals to stay up to date on the latest practices and innovations in the field. It puts quality at the forefront of operations, building a culture and reputation for institutions that last. On an annual basis, the U.S. News and World Report analyzes the best hospitals in the country, and the top hospitals each year are some of the largest teaching hospitals in the country. But how do you know when it’s the right time for you to consider GME?


Knowing when the time is right for GME development should be considered with respect to whether your hospital falls into one of three categories: non-teaching, teaching and in cap development period, teaching and outside of cap development period.


For non-teaching hospitals, GME implementation should occur after thorough strategic planning has been executed. To protect and maximize the ability to build cap, appropriately tiering out GME development is key to ensure the greatest amount of cap can be built. For urban hospitals, this must occur within the first 5 years of all GME programming. For rural hospitals, each program individually must maximize cap within its first 5 years. Appropriately strategizing GME programs also helps to ensure that prerequisites are met for various specialties and available volumes are optimized across programs. Last, but definitely not least, allowing for an incremental transition from a non-teaching hospital to an academic hospital provides time to prepare the medical staff and enable a smooth cultural change.

Teaching and in Cap Development Period

Teaching and Outside Cap Development Period


The strategic benefits of GME can be measured in two ways: non-financial and financial.

On the non-financial side, GME creates a physician pipeline; it is shown that 60% of residents remain in the area where they completed training for post-graduate practice. This is especially important when a high percentage of physicians today are at or nearing retirement age, and there are oftentimes significant challenges recruiting in many specialties. Rurally based training programs in particular may benefit the most in this regard, but even the most urban hospitals must navigate the complexities of physician supply and demand. However, the benefits do not begin after residents graduate; training programs serve as year-long, often multi-year-long, interviews. Hospital staff get to know the residents/fellows as they progress through training, ascertaining their fit within the institution, and establishing working relationships. By the end of training, hospitals will have substantial information to make an informed hiring decision (with minimal costs for recruitment). These residents/fellows who remain at an institution for independent practice also have a naturally expedited onboarding process as they have gained familiarity with hospital policies, procedures, and culture during training.

Residents and fellows also expand the capacity of the current healthcare workforce of an institution by providing many types of coverage. They provide inpatient and outpatient care, emergency care, call coverage, sub-specialty coverage, and community coverage through rotations at various clinics; they can also provide assistance during healthcare emergencies. As many institutions struggle with sufficient coverage, GME can help fill in the gaps.

Moreover, GME training propels innovation and quality. It brings together many bright, diverse minds eager to learn, on both the trainee side and faculty side. Collaboration among the trainees and faculty alike produces new methods and best practices, elevating the clinical and educational learning environment. Numerous studies have shown increased quality of care in teaching hospitals compared to those that are non-teaching. GME programs help to ensure that all physicians and health professionals are up-to-date and knowledgeable of the current standards of health care. The combination of patient care, medical education, and research generates an unparalleled environment of innovation and quality.

On the financial side, GME activity can be eligible for significant federal and state reimbursement through the Centers for Medicare and Medicaid Services (CMS). Federal GME funding through Medicare follows a standardized reimbursement formula that is dependent upon a multitude of factors, including hospital-specific characteristics. State GME funding through Medicaid varies from state to state; currently, 44 states provide some reimbursement for GME training. Together, federal and state reimbursement can help offset the cost of training residents and fellows, sometimes even exceeding the total cost and creating a net positive operating margin for GME.

If you have any questions or are interested in exploring what GME would look like at your hospital, please contact us.

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