|Chapter 7: The Economics of MCH Training
The MCH Training Program
aims to alter the content and types of academic coures and programs universities
offer, the manner in which clinical training is provided, and the activities
of faculty. Despite the fact that most of the grants are relatively small,
compared with total departmental budgets, many projects do, in fact, effect
these changes. At the same time, the projects seem to have difficulty
becoming institutional-ized—that is, obtaining adequate financial
support from their universities such that they could exist in the absence
of MCH Training Program support. Essentially all project administrators,
including those in universities that have been supported for decades,
state that these grant-funded projects would either cease to exist without
MCH Training Program support or would be cut so dramatically as to lose
their essence. To understand how and why the training grants have an impact
that appears out of proportion to their size, and yet why funded projects
rarely become self-sustaining, requires a discussion of some of the economics
of higher education.
"Without MCH [Training Program] funding, there
would be few if any adolescent medicine fellowship programs
in the country. The private academic institutions will
not pay for it, and the public institutions are increasingly in difficulty."
-Faculty member, LEAH
THE ROLE OF TUITION IN ACADEMIC DECISION
Many people may believe
that tuition is an important factor in the courses and programs that universities
offer; this argument assumes an economic model of supply and demand in
which universities offer courses that students want to take. If this were
the case, universities might fully support the academic programs that
are now funded by the MCH training grants, and the grants could be phased
out. For example, student demand for pediatric content might be reflected
in matriculation decisions—students would attend only a university
that met their requirements for such content—or students might oversubscribe
to courses on pediatric topics.
Although the potential for increasing university income
through tuition payments may occasionally affect academic decision-making,
it appears not to be much of a factor in the projects supported by the
MCH Training Program grants. There are several reasons for this:
• Strong student demand, leading to a large
influx of trainees willing to pay tuition, is unlikely in MCH
The level of demand for MCH programs that could lead to large numbers
of new students does not exist. Such demand is typically related to
an expectation that a course of study will lead to an increase in salary.
However, MCH training generally does not have such an effect. The provost
of one university explains this as follows:
"Usually, student, or trainee, demand is created
by a credential that has income associated with it; for
example, a student might seek to obtain a credential that would help
him or her to get a better paying job afterwards. But that's not necessarily
the case in the training of persons to work with children with special
needs. There may be a desire, or altruism, and there may be need, but
there is no financial driver. At [university], the physician associate
program has been converted to a master's degree program and the university
has increased the tuition; the market will bear it because when the
students graduate they will get good salaries. But in training for children
with special needs—that's not true. People are obtaining skills
for which they'll probably make less money."
Likewise, the director of an occupational therapy project
supported by the MCH Training Program commented that without the tuition
support available through the grant there would be little incentive
for practicing occupational therapists to return to school for additional
training because they are already earning good salaries, and the increased
training will not greatly affect their income potential in the future.
In short, a market in the traditional sense for MCH
training does not exist.
• In many universities, tuition payments are
unrelated and irrelevant to decision-making.
Tuition may be low relative to other sources of income.
For example, at Baylor College of Medicine, tuition accounts for only
3 percent of the budget. At state schools, such as the University of
Alabama at Birmingham, tuition also may account for a relatively small
percentage of the total budget, with state funding providing a much
larger part of the university's income. If tuition is a minor source
of income to a university, tuition payments will not have much effect
In some universities or departments, tuition does constitute
an important part of the budget, but the decision-making structure for
development of courses or programs is totally divorced from considerations
related to tuition income. For example, at the University of Washington,
all tuition payments are forwarded to the state treasur y. Subsequently,
the state legislature develops a budget that it provides to the university,
and the university funds its departments based on a variety of criteria.
The amount of money a particular department secures in this budget process
is largely unrelated to the amount of money its students pay in tuition.
• In some programs, trainees do not pay tuition. Much postgraduate
training, such as fellowship training for physicians, costs the university.
The university does not receive tuition; rather, it must obtain money
to support the trainee. In sum, universities rarely include student
demand, as reflected in anticipated increases in tuition payments, in
their decision-making about courses and programs of study that will
be offered, at least as it relates to MCH-type academic programs. So,
even though most MCH training projects are able to recruit more students
than they can train, student interest does not necessarily translate
into the institutionalization of MCH courses and programs of study in
the absence of MCH Training Program support.
THE ROLE OF OTHER FUNDING SOURCES IN
ACADEMIC DECISION MAKING
Although tuition payments
rarely drive academic decision-making, other revenue considerations are
quite important. Accreditation is necessary to most programs if they are
to recruit both faculty and students, and accreditation requirements are
often the primary factor in curriculum decisions. Such requirements become
the floor, or the minimum curriculum, and other factors, including in
particular other sources of funding, may be used to build on the basic
curriculum. For example, the University of Washington School of Public
Health, located in Seattle where there are numerous local biotechnology
and pharmaceutical firms, is facing strong pressure to orient the school
to the conduct of clinical trials; the industry is helping to support
such training, and students view the training as leading to lucrative
"Because MCH is not a core discipline required
for a school of public health to be accredited, it often does not have
the same status of other departments. The training grant helps to legitimize
our efforts in MCH. It's an excuse to resist pressure from the school
and the university to be more generic."
-Faculty member, School of Public Health
"We live or die by grants. We're
always applying or renewing, and we're never sure what the money will
allow us to do."
-Project director, Behavioral Pediatrics
Faculty at many universities are under intense pressure
to generate revenue. There are several ways that they may produce revenue:
through clinical work, contracts for consultation and technical assistance,
and grants, especially research grants. Universities in particular desire
the high indirect costs they gain from research grants. Research also
brings prestige. Some universities emphasize research to such a degree
that anything else is essentially outside the core mission of the university
and is neither valued nor encouraged; this may even include teaching.
The research-funding organizations have great power to direct the interests
of faculty and, through the types of grants they offer, the content
of training. (Graduate students are often recruited to assist in research
projects, and faculty may focus their teaching around research activities.)
Thus, research grants can sometimes have a large effect on an educational
"Immunization and infant mortality aren't glamorous.
MCH faculty are competing against epidemiology faculty
who bring in sexy research grants."
-Current student, School of Public Health
Many universities state that service to the community
and profession are important components of their mission. Thus, in theory,
some of the activities that the MCH training grants require, such as
technical assistance and continuing education, fit squarely within the
university mission. Sometimes such activities can gen-erate income.
In reality, in many academic settings these activities are tolerated
at best; research is the main criterion for tenure decisions and promotions.
Given the highly competitive nature of research grants, most faculty
who are successful in research endeavors have little time left for community
work, and the financial, organizational, and professional rewards for
such work may be relatively limited; in particular, technical assistance
or continuing education will rarely bring the university as much revenue
as a research grant. In short, given the time involved for service activities
and the relative benefits as compared with research, the disincentives
for such activities within many academic settings tend to outweigh the
incentives. MCH training grants appear to be unique in fostering relationships
between academia and communities through encouragement of and financial
support for technical assistance, consultation, and continuing education.
A consistent message from the project directors who were interviewed
as a part of the site visits was that no other funding exists for the
activities supported through the MCH training grants.
"Without the MCH [Training Program] funding,
the PPC would become an NIH research center because that is where funding
-Project director, Pediatric Pulmonary Center
THE IMPACT OF REIMBURSEMENT ON CLINICAL
Clinical training is funded largely
through reimbursements for clinical care from insurance providers or government
programs. Reimbursement has a tremendous effect on the type and quality
of clinical training. Essentially all respondents concluded that existing
clinical training programs would be profoundly affected, and many would
cease to exist, if MCH Training Program support was discontinued. Clinical
training in general is believed by many persons to be in a state of crisis.
According to many observers, cost-cutting, including changes in reimbursement
rates implemented by managed care organizations and the Centers for Medicare
and Medicaid Services (formerly the Health Care Financing Administration
[HCFA]), has degraded the quality of much of the training in clinical
care. Thus, some of the economic problems of MCH Training Program grantees
are not necessarily unique, but many of the cost-cutting measures appear
to have an especially powerful and detrimental effect on these programs.
There are three major reimbursement issues that affect these grantees:
(1) the requirement for faculty to generate income; (2) the expense of
high-quality training, such as interdisciplinary training; and (3) the
low remuneration rates for certain fields.
• The requirement for faculty to generate income:
Faculty in many clinical programs must generate a sizeable proportion
of their salaries through clinical reimbursements. In theory, they can
and should combine the treatment of patients with the teaching of trainees;
in reality, they must limit the time they can spend in teaching in order
to generate sufficient clinical income.
"There [is] more pressure now to generate
clinical revenue so that may reduce time spent training in order to
see more patients. Trainees in settings where faculty
do not have time to do clinical teaching may not receive
-Project director, LEAH
The training of clinicians requires tremendous time;
trainees do not simply accompany and observe the clinician. Explanations
and one-on-one teaching are essential to quality clinical training.
HCFA regulations promulgated in 1999 require that physician faculty
fully oversee all trainee clinical activities, including writing chart
notes for them; thus, trainees place a large burden on practitioners.
Even in fellowship programs, this is an issue: Although fellows are
fully qualified physicians, they may not charge for their services and
must be totally supervised. Designed to prevent improper care of patients,
these regulations have the effect of greatly increasing the time required
of supervising clinicians, decreasing the practice time of trainees,
and reducing clinical revenue at teaching hospitals.
"Department chairs are held accountable for
generating external sources of revenue to cover all activities within
the department. Cost-shifting between research, teaching, and clinical
revenue streams has become increasingly difficult. Grant funds to support
teaching are largely unavailable and state money to support teaching
is quite limited. In this environment, MCH [Training Program] grant
dollars play a pivotal role, enabling faculty to teach in a way that
ensures adequate time for student learning."
-Project director, Pediatric Pulmonary Center
• The expense of high-quality training, such
as interdisciplinary training: The MCH Training Program model of
interdisciplinary clinical training is expensive. In some projects,
teams of health care providers from a variety of disciplines meet, sometimes
more than once and for extended periods of time, to review a case and
develop treatment recommendations. Such training leads trainees to a
better understanding of the whole child and of the contribution that
various disciplines can make in treatment, and it provides excellent
care to children (especially those with very complicated problems),
but it is an extremely time-consuming model with little or no possibility
for reimbursement even remotely approaching the cost of the service.
Adding to the financial pressure, some of the disciplines that participate
in these assessments and clinical services do not receive reimbursement
for their services, either from insurance providers or the government.
Several respondents noted, for example, that social work and nutrition
services are not reimbursable, and that in a tertiary care center, neither
are nurse practitioner services. Without the MCH Training Program grant,
the training projects would be unable to support non-physician faculty
because the clinical money that these individuals can derive is so limited.
Many project directors contend that without MCH Training Program funding,
their training programs would revert to a unidisciplinary clinical focus
and the quality of the programs would suffer greatly. In the end, clinicians
would not be trained as well and ultimately children would receive inferior
"Current reimbursement structures preclude
either the type of training or the types of services being provided
through LEND projects. Yet the children being served have very complex
problems.... Interdisciplinary training will never be self-supporting."
-Project director, LEND
• The low remuneration rates for certain fields:
Some fields require practitioners to spend much more time with patients
than others do, but these time requirements are not reflected in reimbursement
structures. For example, the effective care of adolescents or of children
with behavioral problems typically requires considerable time, but payers
still assume a 10-minute or 15-minute visit. Similarly, insurers frequently
do not understand children with special health care needs and do not
allocate enough time for the provision of services to these children.
Moreover, the amount of reimbursement for some of these fields lags
far behind that for other specialties, even discounting treatment-time
"Here at UCSF, adolescents are capitated at
$8 per month. If an adolescent walks in the door, even one time in a
year, you've lost money. So we do not have the ability to transfer money
from clinical revenue to offset training."
-Project director, LEAH
In years past, many universities were able to distribute
clinical money into all sorts of different initiatives, and they could
subsidize the less remunerative programs with funds from programs that
were able to command more funds. In many places, this is no longer the
case, and thus certain programs are facing severe budget shortfalls.
A LEAH project director commented, “Some specialties, such as
neonatal care and cardiology, generate much more money than is possible
in adolescent medicine. Under managed care, pooling of monies within
a department from different specialties is not possible and so the ability
for better-funded programs to subsidize underfunded services is eroding.”
One project director noted that faculty have now begun to secure funding
from outside sources and are using it to subsidize clinical care and
LEVERAGING OF MCH TRAINING PROGRAM
In a surprisingly large
number of site-visited projects, respondents reported that the MCH Training
Program grant provides the core of the academic program, even when the
grants are relatively modest compared with the department’s entire
budget. Over and over, project administrators asserted that the MCH Training
Program funding establishes the direction for a department and facilitates
additional funding from other sources that require more targeted activities
(e.g., focus on a particular disease). The core support that projects
obtain from the MCH Training Program grant pays for key elements of a
training program that academic departments often cannot fund from other
sources. Support of an interdisciplinary faculty and allowance for administrative
costs, for example, provide a basic infrastructure. Once departments have
the core in place, it is easier for them to secure additional funds, including
research grants and community contracts. Because the MCH training grant
is the centerpiece of the academic program, it defines the program's content