Interview transcript:

Terry Gerton I suspect that most people don’t know that Medicare funds graduate medical education. This is a topic you’ve looked into quite a bit at GAO. Give us an overview of this situation first.

Leslie Gordon Medicare is the biggest funder of graduate medical education. There are a number of federal programs that fund graduate medical education, but Medicare is the primary funder, funding about $22 billion in 2023. We’ve been looking at it over a course of years, because that’s a chunk of change to look at and understand if it’s being effective. Over the course of our work in 2017, 2018, we’ve noticed that there’s a misalignment; there’s an unevenness in how medical residency is distributed across the country and where those graduate medical education dollars go.

Terry Gerton How’s it supposed to work?

Leslie Gordon Well, the impetus behind funding for graduate medical education is to ensure we have a well-trained workforce. And indeed, it should be distributed across the country so that people have access to services. And Medicare cares about having trained providers to care for all the Medicare beneficiaries across the country.

Terry Gerton So the Consolidated Appropriations Act of 2021, if we can take our minds back that far, put in some provisions maybe to try to address this misallocation of graduate medical education, and you’ve just published a report on that. Tell us about what you found in terms of the first three years of this program.

Leslie Gordon Our report is an interim report. The Consolidated Appropriations Act of ’21 funded 1,000 new residency positions. That’s in a framework of over 163,000 medical residents. So it’s not a lot of positions, but it’s designed to alleviate situations where hospitals would like to expand, or smaller hospitals would like to open new medical residency programs, and to direct some attention to underserved communities.

Terry Gerton And as you looked at the distribution of those thousand positions, what did you find?

Leslie Gordon We found that awarded hospitals were very similar to those that applied who were not awarded. So we did a comparison to look at, were there any biases in how these positions were being distributed when CMS was distributing them? Or, did they follow the rules and the categories set out in the CAA? And generally, the awardees and those that were not awarded were similar in nature. There was an effort and an impetus to focus on underserved areas, particularly rural areas, as we noted earlier. And while there wasn’t a redistribution of a majority of positions going to rural areas, there was an emphasis and a success in funding the rural hospitals that applied. Ten rural hospitals applied, nine were awarded. That’s different from about 50% of urban hospitals that applied that were awarded.

Terry Gerton Sounds like this really didn’t get to the crux of putting more residents in urban hospitals.

Leslie Gordon It didn’t put more residents necessarily in urban hospitals. It put more residents everywhere, let me say that. It emphasized and allowed for more residency positions and programs in rural and underserved areas. But with a small portion of residencies that were being awarded, it’s a big pile to redistribute and only have a thousand pieces with which to do that.

Terry Gerton I’m speaking with Leslie Gordon. She’s director for Medicare at GAO. Are there particular issues that the smaller or rural hospitals faced in terms of applying for this program or really making the best use of the resources that could potentially be available?

Leslie Gordon In the course of our work, we talked to representatives from hospitals in all kinds of areas, including rural hospitals. We talked to some hospitals and we talked to hospital associations. We heard that CMS’s use of the health professional shortage area as the primary criterion for distributing and allocating prioritization of who would be awarded got in the way for some smaller communities and those that might be training in rural areas or serving rural residents that traveled out of their local area to seek care. The way in which it didn’t quite land for rural areas is that the HPSA score is based on a population-to-provider ratio. And if you add one new doctor to population of a thousand people, that can really change the score a lot, as opposed to adding one new doctor to a population of 200,000 people. In that way, it wasn’t quite aligned with the goal of focusing on rural areas.

Terry Gerton And so, are there changes that CMS could make to this distribution model in the last couple of years of this program to help address those shortcomings?

Leslie Gordon We provided this feedback and other feedback to CMS as a part of the course of our work. They have two more rounds to distribute. And one of the things we also learned about is that hospitals needed other funding to make good use of these additional spots, these additional residency spots. I think being more aware of upfront costs, the need to maintain accreditation, and some of the challenges that we highlight in our report will help CMS, perhaps, and those who apply.

Terry Gerton If CMS does adjust the criteria or support, are there metrics that they should track to make sure that the changes are working?

Leslie Gordon CMS is tracking the metrics that were set out in the Consolidated Appropriations Act, and we will be looking at and reporting again in 2027.

Terry Gerton So when you think about this over the next couple of years, are there things that Congress, or educators, or other folks should watch to gauge whether or not these new slots are meeting workforce goals? Are they helping advance the accreditation or the certification of young medical students?

Leslie Gordon I think the experience of awarding these positions helps highlight that it’s not just funding that will solve the problem in terms of distribution of medical residency. There’s a support infrastructure that needs to be there in terms staffing, in terms equipment, in terms considering the types of experiences that medical residents need to have to be fully trained. So we cover all these things in our report and I think that this experience with the allocation of the thousand positions helps highlight all the infrastructure that’s needed to support medical residency training.

Terry Gerton Are there companion programs designed to address those infrastructure shortcomings?

Leslie Gordon The federal government actually has 72 programs. Yes, there’s a lot of programs and there are 72 health care workforce programs. And we have open recommendations from our prior work that HHS needs to examine the gaps in the workforce and take action to address those gaps and needs to communicate around them. We have other open recommendations that they don’t have the information necessary to identify and evaluate the cost effectiveness of those 72 programs. So we do have open work, not directly related to this report, but we have open recommendations that focus in on the need to have better information and truly evaluate the effectiveness of all of the Work First programs in a comprehensive way.

Terry Gerton And do you have a sense that CMS and HHS are taking on that task to sort of harmonize all of these programs so that they make sense and they are optimized for best outcomes?

Leslie Gordon They are making progress on our recommendations and we will continue to follow up to see how they progress.

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Interview transcript

Terry Gerton So as we speak, the main topic that generated the last government shutdown, the Affordable Care Act subsidy extension, has expired and we’re potentially looking at a partial shutdown again just at the end of this month. Talk to us first about what the expiration of the subsidies means for Americans.

Carolyn Bordeaux So yes, it’s a very intensely felt issue among some big sectors of the population. What people need to realize is there were two subsidies. You have the standard credits that were originally adopted as part of the Affordable Care Act. Those continue to be in effect. But what expired on Dec. 31 was the enhanced subsidies that were passed as part the American Rescue Plan and then renewed in the Inflation Reduction Act. And those ensure that no one had to pay more than 8.5% of their income for health insurance. And these are people who are purchasing health insurance on the exchange. So a very distinct subset of the American population, but this is people who are small business owners, who are self-employed, that kind of universe of folks. And just to give you one day-to-day example in my life, the woman who does my hair, right? She and her husband purchased health insurance on the Exchange. And what, you know, who is affected by this lapse is people like my hairdresser. It is, she is in that 55 to 65 age range. These are folks who tend to pay higher premiums for health insurance. And they are the ones that, and they’re not super wealthy, right? They kind of fall into sort of that middle range, $65,000 to, you now, maybe over $100,000 a year, but folks like that are seeing their insurance premiums double or even triple in some cases.

Terry Gerton And it’s happening in real time. Is that correct?

Carolyn Bordeaux That is correct, yes. So this went into effect during open enrollment and really the debate at the end of last year was whether they would be able to make changes. Now, there may be further debate coming up in the coming days here, but it has expired and so people are now, starting this month, are going to be paying those higher premiums.

Terry Gerton So Congress spent a lot of time on this topic at the end of the year, three months, really debating it back and forth. From your perspective, what were the sticking points? Why couldn’t they find some way forward?

Carolyn Bordeaux First, from Concord’s perspective, I just want to point out that this is expensive. It is give or take, depending on how it’s structured, around $30 billion a year. What Democrats put on the table was not only the enhanced premium subsidies, but also removing a number of cost-saving measures that passed as part of the One Big Beautiful bill back earlier in 2025. So their proposal, which is a three-year extension, cost $300 billion over the next three years. So there are a lot of really big cost issues out there around this. There are some pretty reasonable ways, into my mind, to pay for it. But of course, whenever you put a pay for on the table, then that opens up another political fight. But a lot of folks like Concord and the Committee for Responsible Federal Budget had suggested things like site-neutral payments in Medicare could be a way to pay for this, stopping Medicare up-coding. Those are all ways that would probably more than pay for the enhanced premium credits. So we were interested in some kind of pairing of those two to get it done. However, you know, there were a number of people who were like, wait, it’s not paid for, and a lot of the proposals put on the table, that was one sticking point. And then what’s very interesting is, I talked to members of Congress about this, and some members’ districts are more heavily affected than others by it. Some districts have more people who are purchasing health insurance on the exchange, whereas other districts, people are more likely to get employer coverage on Medicare, have government coverage, and so there is a lot of disparity over who is really being affected by this when you look at the sweep across the country.

Terry Gerton I’m speaking with Carolyn Bordeaux, former member of Congress and currently executive director of the Concord Coalition and Concord Action. Carolyn, you talked about some of the options to pay for this. Why is it so difficult to get agreement on those if reasonable people think that they’re reasonable options?

Carolyn Bordeaux I personally think that there are lots of great options here to pay for it. I think it would not have been that hard for them to just extend it for a year or two, pay for, it and then work on fixing the premium tax credits. So one of the challenges is, while it is very important for bringing down people’s health insurance costs, right, there’s a very real human cost on the other side these things. Really what they’re doing is papering over the cost of rising health insurance. So it’s basically saying you don’t have to pay more than 8.5% of your income in health insurance if you’re purchasing it on the health insurance exchange. But what’s been happening is insurance companies are like, oh, well, great. I can raise premiums more and more and more, you as a customer are protected because the federal government will step in and cover any additional costs. So, it’s not a particularly good policy way to bring down the costs of insurance premiums, which is what we really need to do. And we were just talking about what some of the objections were to it, and those were also some of objections, that the underlying policy is not a really good policy. We really should find other ways to bring the cost of health insurance.

Terry Gerton Folks have been facing rising health care costs for a while. It far exceeds the pace of inflation. So talk us through the fundamental policy changes that would really restore sort of a balance to health care cost for people across the country.

Carolyn Bordeaux Well, originally when the Affordable Care Act passed, there were a number of provisions in there to try to bring down the costs of health insurance across the board. A lot of those ended up getting knocked out for various reasons. One of them was, of course, the individual mandate. Because if you have an insurance pool, you need for everybody to be chipping in a little bit so that you’re spreading the risk over the broadest population possible. So that was one thing that got knocked out. There was another piece, which was called cost-sharing reimbursements. Actually, there is legislation that — likely to pass the House, but probably won’t make it through the Senate — that would restore cost-sharing reimbursement. It’s a bit complicated, but to try to briefly explain it, what it was funding. So, insurers are not allowed to charge more than a certain amount on copays. So you go into the doctor, you make a payment, your insurance will cover 50% of that visit or 30% or whatever that is. Under the Affordable Care Act, there were certain restrictions that if you were poor, you didn’t have to pay X amount in copayment. There were certain restrictions around that. And then there was funding on the back end to cover the insurance companies’ loss. What happened was that funding was pulled out. However, the requirement that the insurance companies still cover a share of the copay was kept in place. So what did the insurance do? Well, they pass that cost on to the consumers in the form of higher premiums. So that’s another place. There are many little examples like that. There were various insurance risk pools for high-risk people that were in place and a lot of these things got pulled out of the Affordable Care Act and really need to be put back one way or another if we’re going to start addressing the costs of health insurance and there are probably a number of other great ideas out there as well to try to tackle that problem.

Terry Gerton So these are complicated policy discussions on the first hand, and they also have a lot of constituencies on the second hand. So, as Congress gets back up to speed at the beginning of this year, what are your expectations for an effective policy negotiation that might help resolve some of these issues and bring down the cost of health care without, as Concord is so concerned about, adding to the national debt?

Carolyn Bordeaux Yes. So this is, I have to say, health care and health insurance is something that just has bedeviled this country for many decades now. And we need to start thinking about more effective ways to address it, to do it. One of the largest drivers of costs going forward, things that are really going to expand the deficit and add to our really staggering national that are a lot of those healthcare and health insurance costs, particularly as they are in Medicare, and to some degree in Medicaid. So there are huge menus of options out there to try to bend the cost curve on health insurance. And we do need to tackle that in a comprehensive way. Given our current level of dysfunction, I am not seeing that happening. I think from Concord’s perspective [it] is, you know, just step one, we would like to see Congress create a fiscal commission, ideally composed of members of Congress as well as people from the outside to sit down and to start charting a path forward. And part of that path forward is going to have to involve some forms of health care reform to bring down costs.

Terry Gerton I was just going to ask you what your prognosis is for broader fiscal reform. What does this particular discussion tell you about the broader ability of Congress to tackle all of the kinds of issues that have to be addressed in order to deal with the debt?

Carolyn Bordeaux Well, we saw the meltdown that happened at the end of last year. We are coming up on the end of the continuing resolution at the of January. And Congress is really struggling. The House and the Senate, of course, are very fine margins within each party. There are a lot of fissures and fights going on. So it is really hard to see how they do much that is constructive until we kind of re-center ourselves as a country. My hope is that they will move quickly on some kind of omnibus appropriations bill and that they would put into that the fiscal commission legislation so that they can at least get started on a path to reducing the debt and deficit. And it is getting to the point where many economists are really saying this is going to be, getting our debt under control, it is going to be extremely important for our economic health in the years to come, and so it is my hope that they’ll start taking some positive steps, at least get that commission moving.

 

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