CURRENT POLICY ISSUES

While the number and size of Texas' family practice residencies have grown, per-resident funding (adjusted to 1996 dollars) has declined since the early 1980s. In 1982, state funds per family practice resident totaled about $23,300; in 1997, state support per resident will equal just $10,850 -- about ten percent of the current cost of training a resident. The aforementioned 1995 law provided enhanced funding for family practice training and expanded the number of state-supported primary care residency positions. However, the per-resident allotment was not increased. Many believe that an increasing number of residency programs will operate from a service vantage instead of from an educational perspective.

In response, some medical educators in 1996 proposed that the state cover the entire costs for a primary care resident that can be attributed to education (i.e., that the state pay up to 35 percent of a program's current total resident training costs, including a portion of faculty expenses, through direct general revenue appropriations.) However, to provide further support for these programs in a climate where limited new funds are available, some family medicine advocates have suggested that either 1) Texas medical schools and teaching hospitals should reallocate current resources for non-primary care residency positions (including some portion of clinical practice plan revenues) to primary care training, or 2) state funding to the medical schools be reduced by one percent and have these funds dedicated to support the state's family practice training program. In addition, there have been proposals that the state provide separate and additional funding to Texas medical schools to support the third-year family practice clerkship requirement.

In part, the rationale behind seeking further state support for graduate training is that funding for community-based faculty to supervise residents is inadequate, and revenue to support academic missions is threatened by the likely reduction of Medicare support for graduate medical education and the explosive growth of managed care plans. A 1995 law formally involves Texas in the push to implement managed care for its Medicaid recipients. Already, about 10 percent of the state's residents are enrolled in commercial HMOs. While portions of the traditional medical provider community is fighting managed care, its growth in the more urban areas is moving rapidly.

In at least one urban community, the Medicaid mandate to move to managed care is endangering the survival of a family practice residency program. In one of the four counties (Tarrant) currently implementing the managed care program, John Peter Smith Hospital in Fort Worth was not allowed to bid for the Medicaid contract because it does not have an HMO. As a result, hospital officials are worried they will lose a large proportion of the hospital's revenues as well as revenues of its affiliated family practice training program (with 72 residents) which are derived from serving Medicaid patients.