Medicare graduate medical education funding and rural hospitals

To assess the importance of medical residents to rural hospitals, and to pr edict the possible effect of reductions in Medicare graduate medical educat ion (GME) payments, data from Medicare hospital cost reports and from a tel ephone survey of rural hospitals with residency programs are analyzed. In p rospective payment system year 11, 70 rural hospitals received more than $8 0 million in Medicare GME payments. The presence of rural training programs enhanced staff physician recruitment and retention and led to increased nu mbers of physicians settling in communities surrounding the facilities. Man y survey respondents felt that elimination of GME funds would result in dow nsizing or outright elimination of their training programs. The results sup port the contention that rural training programs ave important to hospitals and their surrounding communities and provide an essential component of th e physician supply pipeline to rural areas.