• C Bazell and E Salsberg.
• Bureau of Health Professions, Health Resources and Services Administration, Rockville, Maryland 20857, USA.
• Pediatrics. 1998 Apr 1;101(4 Pt 2):785-92; discussion 793-4.

ObjectiveTo review special issues related to pediatric residency training in managed care organizations, the effects of the changing health care system on the demand for pediatricians and the potential impact on financial support for residency training, current methods of financing graduate medical education (GME), possible future approaches to financing GME, and policy directions to support training of pediatricians well prepared for future practice.MethodsWe reviewed current information on residency education in managed care settings, including the rationale for training in such settings and the realities of such educational experiences. We then assessed the evidence concerning the supply and demand for pediatricians in the present health care marketplace, with its evolution to managed systems of health care. We summarized current approaches to financing GME through Medicare, Medicaid, private insurers and purchasers, and direct federal and state support, with emphasis on the financing of ambulatory training which could occur in managed care settings. Lastly, we described factors influencing the upcoming revolution in GME financing and outlined possible new policy directions for the financing of relevant GME training experiences.ResultsAppropriate training experiences in managed care organizations may be a valuable strategy to address the current disconnect between the traditional hospital-based education of pediatricians and the expanded competencies necessary to practice in intensively managed, integrated and accountable health systems. Present pediatrician supply appears to be in relative balance with health maintenance organization staffing patterns and with needs-based requirements estimates. However, the pediatrician-to-child population ratio is predicted to increase rapidly over the next decade, leading to an oversupply of pediatricians under likely future health care delivery system scenarios. Medicare is the largest explicit payer of GME training costs, historically directing reimbursement primarily for hospital-based education. Numerous innovative financing strategies are being considered to facilitate funding of GME training in ambulatory settings and to open up funding to greater public scrutiny and accountability.ConclusionsAlthough reforms in federal GME financing have been limited to date and other significant changes have been largely state-based, it is likely in the future that explicit funds will be targeted to specialties in demand that prepare physicians well for future practice. Pediatricians and medical educators must intensify their voices in the financing debate to ensure a productive future for quality pediatric residency training.

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