Contractual arrangements between residency programs and HMOs

Although one out of seven health maintenance organizations (HMOs) is directly involved in graduate medical education (GME), either as an accredited sponsoring organization or through a contractual agreement with an academic medical center or teaching hospital to serve as an ambulatory rotation site, relatively little is known about the extent to which HMOs have provider contracts with faculty or residents of GME programs. Such provider contracts are not agreements to collaborate on the education of residents, but rather contractual arrangements under which individual physicians or groups (who happen to be residents or faculty) agree to provide services to HMO enrollees in return for some form of compensation.

In 1990, the Group Health Association of America conducted a survey of a sample of residency training programs in family medicine, internal medicine, and pediatrics to ascertain the extent to which (1) residents and faculty of residency training programs are participating physicians in HMOs; and (2) HMO enrollees are serving as the patient base for GME in ambulatory settings.

Overall, 42% of the residency program respondents indicated that they contract with HMOs to provide services to enrollees. Nearly two thirds (64%) of family practice programs have provider contracts as compared with 28% of pediatrics programs and 24% of internal medicine programs. Provider contracts with independent practice associations are by far the most common, followed by group, network, and staff model contracts, in that order.

It is apparent that provider contractual arrangements between HMOs and primary care residency programs are quite common, especially in the area of family practice. These contractual arrangements have probably resulted in a more predictable and stable patient revenue base for residency programs. The long-term effects on provider practice styles and the financing of graduate medical education are less clear.