Milken Institute SPH Researchers Estimate the Cost of Training Residents at Teaching Health Centers

The federal Teaching Health Center (THC) Graduate Medical Education program was created in 2011 under the Affordable Care Act with the express goal of increasing the number of primary care doctors and dentists practicing in underserved parts of the United States. The Health Resources and Services Administration, which manages and pays for the THC program, set the payment rate that THCs get to train each resident at $150,000. In 2015, Congress reauthorized the program but cut the payment rate to $95,000 per resident annually.

The Affordable Care Act also required that researchers determine the actual cost of training medical residents in the Teaching Health Centers so that an appropriate payment rate could be established. An analysis published online June 29 in the New England Journal of Medicine does just that: Marsha Regenstein, Fitzhugh Mullan and their colleagues at Milken Institute School of Public Health at the George Washington University collected detailed data on the costs of residency programs through a newly-designed costing survey completed by THC programs that had residents during the 2013-2014 academic year. They included typical training costs but also factored in both clinical expenses and clinical revenues related to operating a medical residency program in a THC. Their approach differs from the way that costs for Medicare-supported residency training programs are calculated and provides a more transparent estimate of the true cost of training a primary care resident in a community-based setting such as a federally-funded community health center, rural clinic or mental health center.  

The analysis says that it actually costs $157,602 per resident per year to provide training in the THC program, $62,602 more than the current payment rate. Most THCs cannot support residency training without adequate and stable funding, the authors say. If the funding shortfall continues, it would put the entire THC program at risk.

A 2015 report by GW researchers including Mullan warned that funding shortfalls could exacerbate the primary care shortages in already vulnerable communities. That report predicted that disruptions to the THC program could cut off the pipeline of primary care doctors and could leave an estimated one million patients in underserved areas without easy access to primary care. The NEJM Perspective also points out that Medicaid patients benefit most from the THC program, meaning that cuts to resident training costs could reverse positive steps toward strengthening the nation’s primary care workforce for underserved individuals.

Read the Perspective, “The Cost of Residency Training in Teaching Health Centers,” published online June 29 in the New England Journal of Medicine