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Graduate medical education (GME) determines the overall number, specialization mix, and geographic distribution of the US physician workforce. Medicare GME payments-which represent the largest single public investment in health workforce development-are allocated based on an inflexible system whose rationale, effectiveness, and balance are increasingly being scrutinized. We analyzed Medicare cost reports from teaching hospitals and found large state-level differences in the number of Medicare-sponsored residents per 100,000 population (1.63 in Montana versus 77.13 in New York), total Medicare GME payments ($1.64 million in Wyoming versus $2 billion in New York), payments per person ($1.94 in Montana versus $103.63 in New York), and average payments per resident ($63,811 in Louisiana versus $155,135 in Connecticut). Ways to address these imbalances include revising Medicare's GME funding formulas and protecting those states that receive less Medicare GME support in case funding is decreased and making them a priority if it is increased. The GME system badly needs a coordinating body to deliberate and make policy about public investments in graduate medical education.

Graduate medical education (GME), the system to train graduates of medical schools in their chosen specialties, costs the government nearly $13 billion annually, yet there is little accountability in the system for addressing critical physician shortages in specific specialties and geographic areas. Medicare provides the bulk of GME funds, and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 redistributed nearly 3,000 residency positions among the nation's hospitals, largely in an effort to train more residents in primary care and in rural areas. However, when we analyzed the outcomes of this recent effort, we found that out of 304 hospitals receiving additional positions, only 12 were rural, and they received fewer than 3 percent of all positions redistributed. Although primary care training had net positive growth after redistribution, the relative growth of nonprimary care training was twice as large and diverted would-be primary care physicians to subspecialty training. Thus, the two legislative and regulatory priorities for the redistribution were not met. Future legislation should reevaluate the formulas that determine GME payments and potentially delink them from the hospital prospective payment system. Furthermore, better health care workforce data and analysis are needed to link GME payments to health care workforce needs.