Remarks: Osteopathic Medical Education Leadership Conference

Prepared Remarks of Claude Earl Fox, M.D., M.P.H.
Administrator, Health Resources and Services Administration

At the Osteopathic Medical Education Leadership Conference
Keynote Address
Arlington, VA

September 11, 1998

Good afternoon. Thank you for inviting me. I am so pleased to be with you, the leaders in osteopathic medical education, and to discuss public policy as it affects medical education and the funding of graduate medical education.

From where I sit -- at the helm of the agency that assures access to care for underserved Americans -- medical education is one of the most important tools we have to achieve the outcome we need.

We need a health professions workforce that is composed of:

the right people -- that is, individuals who are as racially and ethnically diverse as the U.S. population;

with the right skills -- trained and motivated to meet our need for primary care, comfortable in the managed care environment, and sensitive to a diversity of cultures;

working in the right places -- in the 3,000-plus pockets of need that dot our inner cities and small towns nationwide.

We urgently need to develop our workforce for the simple reason that more than 43 million Americans are medically underserved ... and in a Nation with the finest health care in the world, that’s just plain wrong.

So HRSA is working to keep the health professions training enterprise moving in the right direction.

This Administration has been steadfast in its commitment to assuring access to high quality health care for all Americans. And we are moving forward toward that goal -- incrementally -- and simultaneously on many fronts.

The Health Insurance Portability and Accountability Act improves access for anyone who could lose insurance with the loss of a job. And Medicaid 1115 waivers allow States to expand access for poor uninsured people.

The Balanced Budget Act last year significantly enhanced access to care for older Americans covered by Medicare. Most dramatically,it created the State Children’s Health Insurance Program -- CHIP -- to insure children whose families earn too much to qualify for Medicaid, but not enough to purchase private coverage.

Clearly, it is essential that we work together -- the Federal Government, the States, and the schools of medicine, both osteopathic and allopathic -- to produce a workforce with the capacity to provide equitable access to care.

HRSA supports undergraduate and graduate medical education through scholarships and loans to disadvantaged and minority students, grants to training institutions, and workforce data development and analysis. Our total health professions training budget in Fiscal Year 1998 is just under $300 million.

We are also working more closely than ever before with our sister agency -- HCFA -- which, through Medicare, paid teaching institutions for graduate medical education to the tune of more than $7 billion last year. It contributed another 1.75 billion Federal dollars through Medicaid.

Historically, the lion’s share of GME funding has gone to traditional teaching hospitals, but that, too, is changing -- with funds directed to ambulatory training sites that are both compatible with osteopathic education and in line with HRSA’s workforce goals.

HCFA last year launched a major GME demonstration in New York to help participating institutions reduce their overall number of residents while substantially increasing their proportion of primary care trainees.

We’re all watching the program very closely and hope it will prove to be one more way to address the conundrum of medical education: overall oversupply but ongoing shortfalls in primary care and in physicians willing to practice in underserved areas -- where they are needed most.

The President’s Initiative on Race and HHS’ companion Initiative to End Racial Disparities in Health further support HRSA’s long held contention that increasing the diversity of the physician workforce is critical in a society where minorities are both 25 percent of population and the fastest-growing demographic group.

We need to train more African American, Hispanic, American Indian, and Alaska Native physicians, who are more likely to treat patients from their own racial and ethnic groups and to treat uninsured and underserved people.

Public policy at the Federal level is pretty clear: our policies must spur medical education to produce a physician workforce that has the capacity to meet current and future needs for primary care, for service in underserved areas, and for care of racially and ethnically diverse underserved people.

I am confident that osteopathic medicine and HRSA can work together to achieve those ends. We can make certain that preparation for the real world of osteopathic medical practice begins in medical school and continues throughout training. We can work together to encourage and assist minority students to enter osteopathic medicine. We can work together to assure that osteopathic residents gain clinical experience in ambulatory settings, in managed care settings, and in primary care.

And we can work together to motivate osteopathic physicians to practice in underserved areas and to treat publicly insured and uninsured patients.

You have a great tradition of advancing these mutually held workforce goals.

More than half (about 60 percent) of osteopathic physicians practice in primary care, compared with about 35 percent of allopathic physicians.

More than half (59 percent) of doctors of osteopathy practice in rural areas, compared with just 11 percent of M.D.s.

Much of your graduate medical education is provided in community-based training sites.

Last year, under-represented minority students comprised about 9 percent of osteopathic medical students -- an all time high -- although still far below the 23 percent needed to mirror the U.S. population.

Right now, we have great opportunity to educate osteopathic medical students in a way that benefits the profession, the health care workforce, the health care system, and the health of the Nation.

We live in interesting times. It’s a time of great change in both health care and government.

And if we act wisely, we can ride the wave of two immutable forces shaping medical education -- health system evolution and Federal devolution -- to achieve resolution of health care access problems.

Any educational institution has a natural interest in the job market its graduates face. New physicians have traditionally encountered a friendly -- even hungry -- market for their skills. That too is changing. In a survey of physicians completing residency training in 1996, 23 percent said they had difficulty finding suitable employment -- and 7 percent were unemployed. JAMA, which published the study last week, editorialized "the physician glut is upon us."

But if you look a little closer, you can see it’s not a true physician glut -- it’s more of a specialist glut. Specialty graduates did find employment, many of them in primary care.

It’s what we’ve been talking about for ages -- and what HRSA’s Title VII and VIII programs were created to mitigate.

What we didn’t know 20 years ago was how health insurers -- increasingly dominated by managed care -- would rachet up the need for primary care physicians. Clearly, the market force of managed care validates and accelerates the urgency of our efforts to increase the number and proportion of physicians practicing primary care.

Osteopathy, because you never shifted your allegiance to specialty training, is uniquely positioned to take advantage of this shift.

I urge you to look at the market niches managed care is creating within primary care and tailor your programs accordingly.

For example, managed care is expanding the scope of primary care practice, creating demand for primary care providers -- like osteopathic physicians -- who are focused on preventing disease but who also can care for patients with complicated chronic conditions -- patients who would have had to be referred to a specialist five years ago.

At the same time, there is growing demand for physicians who are comfortable with technology -- from the Web sites that give consumers access to an abundance to clinical information to telemedicine that could allow a physician in Massachusetts to diagnose and treat a patient in Georgia.

HRSA is working with medical educators and providers to provide technical assistance in managed care and technology. We’re helping community health centers and rural health clinics -- training sites for many osteopathic medical residents -- to integrate with managed care networks. And we’re assisting schools of osteopathic medicine develop their own managed care and technological know-how.

So that’s where health care evolution is driving the physician workforce -- toward a much greater emphasis on primary care, and toward a broader-based primary care.

But medical education doesn’t answer exclusively to the marketplace. Government has a special and appropriate interest in medical education as it benefits the community as a whole and how undersupply would affect the public.

Government has an obligation to assure that society’s need for physicians is met. This fuels both Medicare’s GME payments toassure that adequate numbers of physicians are trained and HRSA’s health professions initiatives that promote the kind of training that yields the physicians the Nation needs most.

The new Federalism -- devolution of control to the States -- extends the obligation to support medical education to the States -- where, after all, inadequacies in the health professions workforce are felt most acutely.

HRSA is partnering with States to bolster our own -- and build their -- capacity to develop workforce policy. We know that physicians have a tendency to practice in the States where they were trained. We are working with State legislators, health departments, and others to help them assess their workforce needs and create medical education policies to meet them.

We’ve had great interest from the States for technical assistance to help them apply national analytical methods and modeling at the State, regional, and local levels. HRSA is working with them to adapt our Integrated Requirements Model -- to make state-level forecasts of physician and other primary care provider needs.

Concerns issuing from the States are not so different from those HRSA has long voiced at the Federal level. They’re worried about an overall oversupply of physicians in the face of an undersupply of physicians who will practice in underserved areas. They’re concerned that residents are not adequately trained for the environment where they will shortly practice. They’re searching for ways to increase the diversity of their physician workforce to more accurately mirror the racial and ethnic background of people in their States.

To achieve some resolution to these concerns HRSA is pursuing innovative ways to encourage medical education to partner with us to get the right providers with the right skills practicing in the right places.

And I believe the osteopathic community -- with your historic and ongoing commitment to -- and record of success in -- providing primary care in underserved areas can provide key leadership to our shared efforts.

I am very impressed by -- and HRSA is very supportive of -- your Osteopathic Postdoctoral Training Institutions Program to enhance GME and osteopathic medical care. The OPTI goal of a GME system consisting of community-based health care consortia among the 19 osteopathic medical schools, AOA-accredited hospitals, and other health care facilities is very much in line with HRSA’s GME goals, managed care demands, and local health care needs.

I know that you -- and all of medical education -- face considerable GME financing challenges. It’s just the nature of the beast to be complicated and convoluted.

But I am confident that you will not just survive, but will in fact thrive during this evolutionary phase.

I know that you have concerns that too many osteopathic graduates receive their graduate medical education in allopathic settings. I understand you may be worried that changes in the way GME is funded could make osteopathic residencies even more scarce. However, the long term goal of the GME changes initiated by the Balanced Budget Act -- and of public policy generally -- is to reform, not simply restrict, graduate medical education.

To relieve some of the short-term pressure, the BBA allows

direct payments to qualified nonhospital providers, including HRSA’s community health centers and rural health clinics, if costs of approved residency programs are incurred.

It also

enables nonhospital residency programs to be created without being subject to the caps;

lets rural programs apply for exceptions to the caps; and finally,

the law authorizes a demonstration project to make direct medical education payments to consortia like those you are building through OPTI.

HRSA is committed to working with you to keep osteopathic medical education vital and growing. We have made a significant investment: $17 million in family medicine program development since 1978 alone.

We support osteopathic medical education through our Area Health Education Centers, through our family medicine, general internal medicine, and general pediatrics programs, physician assistant training programs, and others.

HRSA’s support for osteopathic medical education is evidenced by our selection of the American Association of Colleges of Osteopathic Medicine as our primary partner in implementing Undergraduate Medical Education for the 21st Century.

The initiative, which is being carried out by subcontracts awarded to eight medical schools, supports curricular innovation to expose third and fourth year students to clinical primary care practice for underserved people and to encourage them to select residencies -- and careers -- in underserved areas.

We have recently re-examined all our health professions training programs. We recognize that we’re not the Mark McGwire of medical education, but we believe we can work in partnership with medical education and the many organizations that fund and shape it to catalyze achievements at least as noteworthy as 62 homeruns in a single season.

After years of debate, I think there is general consensus that the goals HRSA and osteopathic medicine have long endorsed and worked toward -- more emphasis on primary care, more physicians caring for underserved people and working in underserved areas, greater racial and ethnic diversity among physicians -- are both worthy and achievable. Most importantly, I think we can all agree everyone has a role to play.

Government -- at the Federal and State levels -- has to adopt policies that support those goals in the context of the health care marketplace. Medical educators, for their part, have to create programs that train physicians to meet the long term needs of the Nation and to fill a niche in the marketplace.

None of us operates in isolation.

The osteopathic community has demonstrated one of the most important traits needed to accomplish the task: a willingness to adapt to the environment while maintaining a bedrock commitment to the people who count on you and your graduates to provide the care they need.

I look forward to working with you to create a medical education system that does both.

Thank you. Now I will be pleased to take your questions.

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