Health Care Workforce Financing, Education and Training


Graduate medical education—publicly funded subsidies for physicians’ graduate medical education (GME) in teaching hospitals come mainly from Medicare (about $9.5 billion per year), and Medicaid ($2 billion annually). Federal support works out to about $100,000 per medical resident per year. About 40 states paid an additional $3.87 billion through Medicaid in 2012 to support GME.

The Medicare Payment Advisory Commission (MedPAC) has consistently found that Medicare’s GME subsidies do not result in a provider workforce that is prepared to provide high-quality, high-value, and affordable care. Medical residency programs are largely based in acute-care teaching hospitals where residents spend most of their training time involved with inpatient care. Yet most of the medical conditions that practicing physicians confront should be managed in nonhospital settings such as offices or clinics. In 2015 MedPAC recommended that GME payments be performance-based in order to foster greater accountability for Medicare’s GME dollars. In addition to greater accountability, MedPAC recommended greater transparency to recognize Medicare’s significant investment in residency education and training.

Content of clinical education—research indicates that a lack of communication between patients and clinicians about complementary and alternative medicine (CAM) can be risky. When a clinician is unaware of a patient’s CAM use, dangerous and even life-threatening interactions between conventional medicine and CAM can occur. One reason for this communication gap is that many clinicians do not ask about possible CAM use as they have limited knowledge of such therapies. Clinicians with proper training can better advise their patients to make safe and appropriate choices about CAM. (See also this chapter’s section Quality, Safety, and Research—Medical Research.)

Nursing education—to continue to improve health care for all Americans, we need to make significant improvements in the way nurses are educated and empower them to lead change and advance health care efforts.

AARP endorses the April 2008 report by the Institute of Medicine (IOM)—now known as the National Academy of Medicine—retooling for an Aging America: Building the Health Care Workforce. This study underscores the need for more medical and nursing educators and increased federal funding for such faculty positions.

AARP also endorses the findings and major recommendations of the IOM’s October 2010 report, The Future of Nursing: Leading Change, Advancing Health. The report provides a blueprint for action to develop a nursing workforce that is prepared to deliver patient-centered care in the 21st century. The IOM emphasizes that nurses are essential to providing higher-quality care, both as leaders and as clinicians. It also notes that any effort to improve the system requires their continued, comprehensive contributions.

The ACA-mandated Graduate Nurse Education Demonstration, supports training of APRNs in five states and is administered by the Centers for Medicare & Medicaid Services (CMS). This would increase access to primary care and expand the number of health professionals who are skilled in geriatrics.

Teamwork and diversity—in addition to having the right number and mix of providers, we need to make sure that all providers have the skills needed to provide high-quality, efficient care to an aging population, which includes the ability to function effectively in teams. The IOM, in its 2012 report Core Principles & Values of Effective Team-Based Health Care, cited a high-performing team as “an essential tool for constructing a more patient-centered, coordinated, and effective health care delivery system.”

Furthermore, providers should be skilled in providing care to a diverse range of patients as our society becomes more culturally and ethnically diverse. Patients from different cultures and ethnic groups bring with them traditions and sensitivities that affect how they interact with the health care system. In general, providers lack knowledge about the health care views of these patients, which impedes communication and decreases the likelihood of successful patient outcomes. In addition, a perceived lack of understanding and respect for varying traditions and sensitivities may discourage those from different cultures and ethnic groups from even seeking appropriate health care. The necessary skills for providing high-quality care to a diverse range of patients should be learned first during medical school/residency, nursing school, and other professional education and training sites. Learning should continue throughout one’s career. Responsibility for ensuring that providers have the necessary training lies not only with medical or nursing schools, but also with state licensing agencies, provider boards, and other professional organizations.

Past efforts to bring more people from racial and ethnic groups that have experienced discrimination into the health workforce have had limited success. The Association of American Medical Colleges has long worked to increase the number of individuals in medical school from underrepresented racial and ethnic groups that have experienced discrimination. Despite these efforts, there has been little growth in the number of ethnically diverse medical school graduates.

Lack of diversity is also a challenge for the nursing profession. A 2013 survey conducted by the National Council of State Boards of Nursing and the Forum of State Nursing Workforce Centers found nurses from racial and ethnic groups that have experienced discrimination represent 19 percent of the registered nurse workforce. The survey found that 6 percent of nurses are African American; 6 percent are Asian American; 1 percent are Alaskan Native or Native American; and 3 percent are Hispanic. The survey also found that men represent 7 percent of all nurses. However, a 2014 survey by the American Association of Colleges of Nursing found that representation from racial and ethnic groups that have experienced discrimination is improving among nursing students: members of such groups now constitute 35 percent of students in bachelor of science nursing programs and 37 percent of master’s students. (See also Chapter 8, Long-Term Services and Supports.)

Health Care Workforce Financing, Education and Training: Policy

Graduate medical education (GME)

In this policy: Federal

Financial support for GME should not be the responsibility of Medicare alone, but should come from all payers in both the public and private sectors.

Medicare’s support for GME should be reduced as contributions from other payers increase. This should occur gradually to allow the system to adjust.

Medicare’s support for GME should be tied to specific goals for residency training: physicians skilled in providing high-quality, efficient care, who are able to function in interdisciplinary teams, accountable care organizations, and medical homes.

The Department of Health and Human Services should establish standards for distributing GME funds that specify ambitious goals for practice-based learning and improvement, interpersonal and communication skills, professionalism, and systems-based practice, including integration of community-based care with hospital care.

Congress should reduce Medicare’s current indirect medical education (IME) payments in favor of funding performance-based medical education subsidies. Only those programs that meet the new standards described above should receive IME funds.

Medicare’s GME subsidies should be targeted to achieve specific goals related to workforce composition:

  • GME subsidies should be higher for primary care and specialties such as geriatrics that experience larger provider shortages, and for those programs most successful in training physicians willing to work in underserved areas, including those were racial and ethnic groups that have experienced discrimination, rural, and low-income communities.
  • GME subsidies should support the training of quality geriatric specialists available to meet the needs of the growing population of older Americans.

Graduate nursing education

In this policy: Federal

Mandatory funding for graduate nursing education would ensure that there are enough primary care providers and chronic-care managers in a 21st-century health system. Mandatory sources of funding for nursing education should also include incentives to direct advanced-degree nurses to be nursing educators.

Congress should reform Medicare payments for nursing education to substantially increase the number and diversity of graduate-educated nurses in order to help increase access to primary care in shortage areas, expand the number of expert chronic-care managers, and increase the number of nurses skilled in geriatrics.

Medicare funding for graduate nursing education should be targeted to achieve specific goals related to workforce composition, including preparing nurses to work in and lead interdisciplinary teams, accountable care organizations, medical homes, and underserved areas.

Nursing education

In this policy: FederalState

States should supplement Title VIII nursing education funding to promote education progression and advancement and a more highly educated nursing workforce. Funding goals include:

  • the further and increasingly rapid spread of partnerships between associate’s degree (AD), bachelor’s degree (BSN), and master’s degree (MSN) programs in nursing;
  • rapid cycle increases in the relatively small number of community colleges offering BSNs;
  • rapid increases in enrollments in AD through MSN programs in the nation’s universities;
  • increasing BSN through Doctorate in Nursing options;
  • accelerated BSN and MSN programs for students with degrees in other fields—accelerated MSN programs are much less common than BSN programs and should be an area of focus;
  • online competency-based BSN programs, with local clinical placements and mentoring;
  • increased enrollments in generic BSN programs or entry-level MSN programs in the nation’s universities; and
  • university nursing programs that provide evidence of interprofessional training opportunities.

CMS could also create incentives for interprofessional teamwork through targeted support of interdisciplinary initiatives from the Center for Medicare and Medicaid Innovation.

Funding for geriatrics

In this policy: State

States should explore funding and loan forgiveness programs to encourage students to train in geriatrics. When states employ financial incentives, they should be provided for all health professions where there is need.

States should make grants available to establish divisions of, or centers for, geriatric medicine; support biomedical research on aging; and develop geriatric curricula for training use in chronic-care institutions.

Research and educational facilities

In this policy: State

States should establish and expand research and educational facilities to meet the special needs of older adults and people with disabilities, emphasizing the needs of older members of racial and ethnic groups that have experienced discrimination and older women.


In this policy: State

States should partner with hospitals, and should offer incentives to colleges and universities to partner with hospitals, to create public-private partnerships that would fund nursing faculty positions.

Student loans

In this policy: FederalState

The federal and state governments should provide incentives through student loan forgiveness to encourage nurses with master’s and other advanced degrees to become faculty members.


In this policy: FederalState

All health care providers who have contact with older patients should have appropriate training to address older patients’ unique health care needs.

More emphasis should be placed on geriatrics and the special needs of older patients in medical and nursing school recruitment and core curricula. To ensure this, significant increases are needed in the number of medical and nursing faculty appropriately qualified to provide education and instruction in the care of older people.

More geriatric-specific in-service training is needed to prepare health care workers (in both institutional and noninstitutional settings) to meet the physical and psychological needs of an increasing older adult population.

Both primary care clinicians and mental health professionals should be trained in recognizing, diagnosing, and treating or caring for the mental health problems of older people and should learn how to refer patients with complex needs for interdisciplinary geriatric assessment when appropriate.

States should:

  • mandate that professional schools with health and human services curricula require education in geriatrics and gerontology;
  • require providers renewing their professional license to submit proof of continuing education in geriatrics if they treat older adults; and
  • establish and enforce appropriate educational, training, and continuing competency standards for all health care providers, including those who represent themselves as having a specialty in geriatrics.

Diversity training


In addition to stepping up recruitment and retention of students from racial and ethnic groups that have experienced discrimination, health professional curricula should increase and improve understanding of, and sensitivity to, cultural and ethnic differences that may affect the health care needs and outcomes of increasingly diverse patient populations.