Financing ambulatory care education in internal medicine.

As graduate medical education (GME) shifts to ambulatory settings, it is critical that financing follow suit. However, present financing of GME by Medicare is linked to payment for inpatient service, and few other payors pay explicitly for education. Human capital theory suggests that hospitals will be unwilling to finance GME unless their expenses are reimbursed. Reform of Medicare should include changes in how residents' time in ambulatory settings is counted, incentives for primary care education, and direction of funds to medical educators (rather than hospital administrators). Other federal initiatives could include changes in U.S. Department of Veterans Affairs (VA) support of residents and in Title VII grants. Non-federal payors also should contribute to paying for GME. Physician payment reform could help finance primary care GME, and an additional payment for bills submitted by physician-teachers should be considered. Medical educators must share responsibility by assuring that residencies are operated efficiently and that national needs for physicians are not subjugated to local service requirements.