Graduate Medical Education


Texas is facing a serious shortage of physicians, due to the growing and aging population and the impending retirements of older physicians. The state cannot provide residency training, or graduate medical education, to all of Texas’ medical school graduates. Capped federal funding for GME has hindered necessary, commensurate increases in residency training, creating a bottleneck for the physician workforce.

The Texas Legislature made significant strides to increase GME funding each legislative session since 2013 but continued state funding is required over the next decade to ensure a sufficient physician workforce to meet the health care needs of a rapidly growing population.

Teaching hospitals serve a unique and critical role in the nation’s health care system. They not only train future health care professionals but also conduct medical research and serve a distinct and vital role in delivering patient care, particularly to the uninsured. Direct GME payments help fund the teaching costs of residency programs, such as resident salaries and benefits, faculty salaries and benefits and administrative overhead expenses. These payments are based on a hospital-specific, per-resident cost in 1984, updated annually for inflation. The per-resident payment amount varies by the residents’ specialties. The federally funded resident count for most hospitals is capped at their 1996 levels. Hospitals and other health care-related institutions contribute significant financial resources towards the cost of training future physicians.

In Texas in 2013, there were more than 50 teaching hospitals supporting nearly 6,800 residencies.

THA Takeaways: State GME Funding is Crucial for a Sufficient Physician Workforce

By the Numbers

Physician Shortage:

  • Texas’ physician-to-population ratio is 205 per 100,000.
  • National physician-to-population ratio is 259 per 100,000.

Medical Education and GME Costs:

  • By 2018, lack of training opportunities in Texas will cause about 140 medical school graduates to go out of state for training
  • Texas invests $168,000 per medical school graduate, so an estimated $23 million annually would be spent on medical education for physicians undertaking out-of-state residences.
  • Cost of training conservatively estimated at $150,000 per resident per year.
  • State contribution is $4,400 per resident.
  • Residency programs pay for about two-thirds of training costs.

According to Texas Government Code 305.027, portions of this material may be considered “legislative advertising.” Authorization for its publication is made by John Hawkins, Texas Hospital Association, 1108 Lavaca, Suite 700, Austin, TX 78701-2180.