On Wednesday, the California legislature passed a $170.9 billion budget that includes historic support for and expansion of primary care graduate medical education (GME) in medically underserved areas.

Under this budget agreement, the state will spend $100 million over three years ($33 million each year) to fund the Song-Brown Program, an existing grant program housed within the Office of Statewide Health Planning and Development that supports primary care residency programs in medically underserved areas.

“A robust, well-trained primary care workforce is essential to meeting the health care demands of all Californians,” said California Medical Association (CMA) President Steven Larson, M.D., MPH. “The legislature’s move to restore and stabilize funding for these programs is an important first step toward reversing the state’s shortage of primary care physicians, particularly in the underserved communities that need it the most.”

CMA led a coalition of health care groups—including the California Academy of Family Physicians, American College of Physicians, Osteopathic Physicians and Surgeons of California, California Primary Care Association, California Hospital Association, California Children’s Hospitals Association and Planned Parenthood Affiliates of California—to secure this important funding for primary care residency programs.

GME is the hands-on training phase of physician education that is mandatory in order for physicians to obtain their license for independent practice. During this clinical training, residents also provide needed care for one out of every five hospitalized patients, including our seniors, veterans and patients in underserved communities.

This additional funding is critically important, as the United States as a whole—and California in particular—is facing a severe shortage of doctors, which is expected to get exponentially worse as the population continues to grow and our aging physician workforce moves toward retirement. It is projected that by 2025 we will have up to 90,000 fewer physicians than the country needs.

After several rounds of negotiations with the Governor’s administration, the $100 million will be spent in the following categories:

• $62 million in new funding to be spent over six years to help support existing primary care residencies (family medicine, pediatrics, internal medicine, OB/GYN).

• $10 million in new funding to be spent over six years to support the creation of new primary care physician residency programs at facilities without existing programs.

• $10 million in new funding spent over six years to fund new primary care residency slots at existing residency programs.

• $17 million in new funding to be spend over six years to support existing Teaching Health Center primary care residencies.

• $1 million to fund the State Loan Repayment Program, a federally funded (state administered) provider incentive program (different than the Steve Thompson Program) that clinics use to recruit providers to medically underserved areas.

CMA and the American Medical Association (AMA) are also actively advocating for additional GME funding at the federal level. Medicare currently provides the bulk of the GME funding nationwide, about $9.5 billion annually. Unfortunately, this figure hasn’t changed in nearly 20 years. Inadequate funding for residency programs means that hundreds of graduating medical students don't find a residency slot to continue their training.

AMA also this week adopted policy at its annual meeting aimed at ensuring there is sufficient funding for medical residency positions across the U.S. The new policy also calls for transparency in the actual costs of residency programs and how GME funding is distributed to address physician shortages in undersupplied specialties.