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.

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