Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: A quick note, due to social distancing, parts of this episode were recorded in ad-hoc home studios.

All this week, we’ve been bringing you bonus episodes, conversations with people making difficult decisions in response to the coronavirus outbreak.

Bapu Jena: While coronavirus is rightfully taking up most of our daily attention, other important health policy is still happening every day.

DG: New federal rules on sharing patient data dropped last Monday.

BJ: A public option bill passed its first hurdle in Colorado.

DG: And today, Friday, March 20, is Match Day when thousands of medical students find out where, and in what field, they will spend the next several years training to become doctors.

BJ: Although the dramatic envelope opening ceremonies that are a hallmark of Match Day won’t happen this year the matching still will.

DG: What many people may not know is the formula used to fund these training programs makes it harder for some parts of the country to address physician shortages.

BJ: And as fears grow over whether our health system can handle the expected surge of coronavirus patients, it’s even more clear how much it matters that communities have the doctors they need when they need them. I’m economist and Harvard physician Bapu Jena.

DG: And I’m Dan Gorenstein. From the Annenberg Studio at the University of Pennsylvania, this is Tradeoffs.

DG: So Bapu, I know Match Day is usually this big ceremony, and that’s not happening in a lot of places this year because of coronavirus. But to get a sense of what the day is like in a normal year, what was your Match Day like?

BJ: I remember it very clearly. We were all in the main auditorium at the University of Chicago where we have all our big events. I was sitting in the back with all these people I had been in school with for years and we all had these envelopes. I was very stressed because I had been dating this woman for the last six months and it wasn’t for sure that we would match in the same place, and whatever was in that envelope, that’s where we had to be for the next several years of our lives.

DG: Bapu, before we hear the end of your story, a bit of context. Residencies like yours are paid for mostly by the federal government, nearly $20 billion a year.

BJ: Right, it’s actually been a part of Medicare from the beginning, and that’s 50 years ago.

Medicare News Tape: President and Mrs. Johnson and Vice President Humprey arrive for ceremonies that will make the Medicare bill a part of Social Security coverage.

BJ: It was supposed be a short term thing until they found a different way to fund it, but that never happened.

DG: And here’s an interesting fact. Data shows most doctors end up working in the same state where they did their residency.

So, Bapu where you train, what’s in that white envelope, has an impact on where you practice.

BJ: Yup. I did my residency at Massachusetts General and I’ve pretty much stayed in Boston ever since. And that girl I was dating also matched in Boston. She’s now my wife.

But, here’s the thing, Dan, the system isn’t working for everyone. My wife and I, we trained and stayed in a place where there are more hospitals than Starbucks. If you look at federal numbers, 80 million people live in areas without easy access to primary care. More than 100 million are in places without sufficient mental health providers.

DG: To really understand how residency programs are contributing to this, I called Candice Chen.

CC: When we have issues with not enough primary care doctors, there’s no way to say to hospitals, we need to produce more primary care doctors or we need you to produce more psychiatrists.

DG: She’s an associate professor at George Washington University, a primary care pediatrician and one of the top experts in the country on physician workforce and equity.

CC: We did a study a couple of years ago looking at the distribution of Medicare funding across states, and it was shocking to see that one state, New York, received 20 percent of all of the Medicare funding support for residency programs. That’s one fifth of all the funding support across the United States. In contrast, more than half. Twenty nine states each received less than 1 percent of the federal support.

DG: Wow and I know a federal report from a few years back showed that only 1 percent of this funding was going to rural communities even though almost 20 percent of the population is rural. This doesn’t sound very equitable. Why does the system work like this?

CC: The system works this way because in 1997, Congress capped the number of residents each hospital could receive support for, and hospitals and communities in the middle of the country in Montana down to Texas hadn’t started as many residency programs. And over the course of the next 20 years we’ve seen growth in different states. So freezing the Medicare support to 1997 levels has really affected the ability of some of these communities to expand their residency training programs to meet the needs of the communities.

BJ: You know Dan, what Candice is describing with the caps and the struggles states face has played out in Idaho.

Ted Epperly: We’re a poster child for the type of place that gets left out of a formula like that.

BJ: That’s Ted Epperly, a family medicine doctor in Idaho, a state that ranks near the bottom in the U.S in physicians and residents per capita. That means some people, especially in rural areas, have to travel hundreds of miles to see a doctor.

TE: In Lincoln County here in Idaho, we have one physician for the entire county. Keith Davis is his name. I know Keith well. He’s a excellent person. Keith has been there for 25 years, administering to about 2700 people.

BJ: That kind of doctor to patient ratio can be dangerous.

TE: Routine problems go on longer or become more significant. And so in those places, they live sicker and they die younger.

BJ: Research shows that having more primary care doctors is associated with better outcomes and fewer deaths

Even two decades ago, when Ted took over a family medicine residency program in Idaho, he understood his state was headed for a crisis. Already short on docs, the solution was obvious to him: get more people to train in Idaho.

TE: There’s data that shows compellingly that 50 to 75 percent of physicians will stay within 100 miles of where they train.

BJ: But to do that, he needed money.

Knowing a cash infusion from D.C. was out of the question, Ted looked for a homegrown fix.

TE: It’s more important to build a kind of relationships with hospitals, with legislators, with the governor, so that you could start over time to educate them about what potential solutions were.

BJ: Ultimately, his approach worked! In 2017, state leaders asked him to put together a roadmap. He sketched out a plan to more than double the number of residency programs and new residents they trained each year over the next decade.

But it wasn’t going to be cheap. The price tag: $180,000 per trainee per year.

TE: The strategy was to say, look, let’s divide this into thirds. A third will be paid for by the program itself through its own clinical revenue. A third will come from what’s called the sponsoring institution, and we asked the state then for the other third.

BJ: All three groups agreed to take on that shared burden, and now, 3 years later, Idaho has trained hundreds of new residents.

Ted’s honest with himself though. He knows adding more residents is just part of the solution.

In rural areas especially, he believes access to telehealth is key.

But on a personal level, he says beefing up the state’s residency programs may be the most important thing he does.

TE: Not that delivering 15 hundred babies and taking care of one hundred thousand patients hasn’t been important to me, but to be able to help create a system that could continue for the next hundred plus years in generating a workforce, that was meaningful.

DG: I know there are a couple of other states that have taken steps like Ted did in Idaho, so I asked Candice Chen from George Washington if she thought Idaho was an anomaly or a blueprint?

CC: States are definitely acting in this area. And I think it’s a real demonstration of how great the need is. States like Georgia, Texas, Oklahoma, California, are making explicit investments in trying to fill the gaps that their communities are seeing. But when you’re approaching $20 billion of federal funding that’s not producing the doctors that states and local communities need, having states with very limited budgets throw more money at a system that has a lot of money in it that could be redirected to to actually meet their needs. States can’t do it on their own.

DG: And Candice, I know that there was a big report from the Institute of Medicine back in 2014 that recommended some pretty big changes to the system. Can you walk us through what those recommendations were?

CC: Sure. The Institute of Medicine, effectively found that the Medicare funding and the way that it’s set up doesn’t make a lot of sense. And so they recommended taking about 30 percent of the total funding back from the teaching hospitals and putting it back into the system to get very specific outcomes, things like focusing on primary care or high need specialties.

DG: Have any of these ideas been tried?

CC: The big reform ideas have not been tried. One of the reforms that we have seen is the Teaching Health Center program and the teaching health center program was established in the Affordable Care Act and, compared to overall about a third of all residents staying in primary care teaching health centers, see over 60 percent of their residents stay in primary care. And then on top of that, they see 60 percent of their residents staying in medically underserved communities or in rural settings. So really good outcomes that show us that if you make smart investments, you can get the outcomes that communities really need.

DG: We talked with Atul Grover from the American Association of Medical Colleges, and he told us that by making changes to how Medicare funds residencies, it’s going to disrupt what happens at academic teaching hospitals, places that lots of us would agree are really important to our health care system. Here’s what he said:

AG: There’s stuff that should be done at the edges, but probably ought not to involve dismantling the basis of the system because our health care system is clunky. But you’re hard pressed to find anybody who would say we don’t have the best clinicians in the world. And I don’t think you want to disrupt that system.

DG: Do you think he’s right about the risks that come with making some of these changes to the funding formula for the residency program?

CC: I understand the fear of pulling back up to 30 percent of the funding, I don’t think anybody is proposing that we stop funding the largest academic medical centers. I think what people are proposing and asking is, can they do it with a little bit less support so that some of that funding can go to really address the inequities that are in the system right now and mean the difference between whether communities have a primary care doctor to go to, whether communities are going to have an OB-GYN or a family medicine doctor who can deliver their baby.

DG: When we think of Match Day, we tend to think of young, bright medical students so excited to find out where their training is gonna go next. This year though, with Coronavirus, Match Day is a reminder of how critical it is have enough doctors to meet the need.

BJ: Really, every Match Day is also about all of us, the patients those doctors will one day serve, or not.

DG: While residency funding is only one challenge to improving access to medical care, research shows it has a clear role to play.

BJ: Big changes would likely disrupt a training system that has produced some of the world’s great physicians. Many believe, though, that some disruption is necessary after relying on effectively the same funding formula for more than 50 years and expecting different results.

DG: Some states like Idaho are already taking steps to get those results. But when it comes to our federal tax dollars, we’re still spending billions on residencies that leave millions of people without access to the doctors they need.

I’m Bapu Jena.

DG: And I’m Dan Gorenstein. This is Tradeoffs.