Graduate medical education (GME) has fallen short in training physicians to meet changes in the US population and health care delivery systems. The shortfall in training has happened despite a consensus on the need for accelerated change. This article discusses the varied causes of GME inertia and proposes a new funding mechanism coupled to a competitive peer-review process. The result would be to reward GME programs that are aligned with publicly set priorities for specialty numbers and training content. New teaching organizations and residency programs would compete on an equal footing with existing ones. Over a decade, all current programs would undergo peer review, with low review scores leading to partial, but meaningful, decreases in funding. This process would incentivize incremental and continual change in GME and would provide a mechanism for funding innovative training through special requests for proposals.