Moda Health May Help Boost Medical Residencies in Oregon

The Portland-based health insurance company has proposed funding the start-up costs for a nonprofit consortium that would work to recruit faculty and raise cash to fund new medical residencies in the state, the number of which have been largely frozen in place by a 1997 federal law that doesn’t give Oregon its fair share.

Oregon may move to increase the number of medical residencies in the state that have been all but frozen in place since 1997, with an assist from Moda Health.

Cathryn Cushing of the Oregon Health Authority told the Oregon Health Policy Board on Tuesday that Moda Health was seriously interested in funding the planning and start-up costs for a new consortium that would organize the medical community and pool together private and possibly state resources to expand the number of medical residencies in Oregon.

Medical residencies are overwhelmingly funded through the Medicare program, but a law signed by President Clinton, the Balanced Budget Act, froze the number of residencies in place according to the number of slots that existed in 1997. Since that time, the U.S. population growth has shifted away from the Great Lakes and the Northeast to the South and West, but residency concentrations have remained in states like New York, Massachusetts, Ohio, Illinois and Michigan. 

That’s left the lowest concentrations in high-growth states such as California, Florida and Georgia, as well as Oregon. Medical schools have increased their number of students, and Oregon added a new osteopathic medical school to meet demand, but the residency cap has created a new bottleneck.

“There are essentially no opportunities for foreign or international medical students to get residencies,” said Dr. Joe Robertson, president of Oregon Health & Science University, who sits on the board.

Oregon has just three residency programs, but has the capacity to double that number by 2019, if funds were available. Robertson said OHSU spends about $14 million funding residencies, giving the state 200 more slots than its federal cap, but the medical school’s resources cannot meet state demand on its own.

Residencies are important not only to provide medical students with the necessary chance to become full-fledged physicians, but they also give states a leg-up on retaining those newly minted doctors. Since Oregon doesn’t receive its fair share of residencies, the state is at a disadvantage in attracting and securing its fair share of doctors.

As the state grows, the problem will only to get worse.

Bend, for example, has seen significant growth over the past 17 years, but St. Charles Medical Center still has only one residency position. Getting the number of medical residencies in the state raised was a key policy point of concern for the Republican state representative candidate in Bend, Dr. Knute Buehler.

A bipartisan bill in Congress has been proposed that would increase the number of residency slots that are funded by Medicare from 26,000 to 41,000 by 2019. U.S. Sen. Jeff Merkley is a co-sponsor, along with Oregon U.S. Reps. Earl Blumenauer and Peter DeFazio.

But according to, the bill has virtually no chance of passage, possibly because of its sticker price. The Institute of Medicine has also proposed changes that could change the funding formula, possibly opening up more slots for under-represented states.

But given the poor track record of the federal government, especially Congress, to fix problems as they arise, Oregon appears poised to fly with her own wings.

The report accepted by the board said the consortium would likely be set up as an independent nonprofit organization for administration, faculty recruitment and receipt and distribution of funds. Such an organization would work closely with both medical schools as well as the state’s hospital systems.

But fine details of how the new consortium would operate were scant, leaving board members such as Brian DeVore of Intel to approve the concept with the reservation that the Oregon Health Authority hash out more details. Cushing declined to say how much Moda Health was willing to commit to the project, since the deal was not final, but said it was a “significant figure.”

Cushing said if the state got involved with legislation, it could have a bigger hand in setting the rules and ensuring that the consortium follows state policies. But state involvement could also set the program up to depend on the mercy of state coffers, while a private nonprofit would have more independence. She said Utah had a good residency program only to see state support disappear. “In a funding crisis, that money got pulled,” she said. The nonprofit model had been used successfully in California.

Oregon, with its particularly volatile budget, should find Utah’s predicament no stranger. The state similarly made drastic cuts to the Oregon Health Plan in 2003 when an economic recession slashed state budgets.

Chris can be reached at [email protected].
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