Magazine article Insight on the News

Federal Government's New Plan: Pay Hospitals Not to Train Docs

Magazine article Insight on the News

Federal Government's New Plan: Pay Hospitals Not to Train Docs

Article excerpt

New York hospitals educate 15 percent of the 25,000 new physicians certified each year -- simply too many doctors, says the govemment, which will pay the state $400 million to stop training residents.

When farmers began to grow too much corn, the federal government paid them to let their fields lie fallow. Now there are too many doctors -- 25,000 are added every year -- and the government has decided to pay teaching hospitals in New York to stop training new ones.

The plan, originally proposed by the Greater New York Hospital Association, or GNYHA, calls for the government to pay 42 participating hospitals $400 million during the next six years to eliminate residency positions. In the long run, say advocates, this novel approach will save taxpayers a great deal of money.

"This is the first time this has ever been done," Mary Johnson, spokeswoman for GNYHA, tells Insight, adding that there was a particularly compelling need for hospitals to come up with innovative solutions. "Things are changing so quickly The hospital system is becoming deregulated and penetrated by managed care. There are new trends in technology."

Just how serious is the. surplus of residents? Very, says Robert Dickler, vice president of health affairs for the Association of American Teaching Hospitals, or AATH, in Washington. "We need to remember that medical education is a long-term cycle. It's a minimum of seven years before you can go into practice. All the experts have to look five to 10 years ahead."

It isn't only the number of residents that has hospitals and the government concerned. Many are training to be specialists, who tend to drive up medical costs by ordering expensive tests and procedures. The New York project would move residents away from specialties and into primary care where the need is greater. "There aren't enough [damaged] hearts to support all the cardiologists," says Alan Hillman, a professor of health policy at the University of Pennsylvania.

Hillman predicts a transfer of health-care delivery to allied personnel. As residents are eliminated, other personnel, including staff physicians, nurse practitioners and physician assistants, will be recruited to replace them. "Once you've learned how to draw blood, you don't have to do it every day for two hours," he says, referring to the tedious work medical trainees are obliged to perform.

Medicare supports graduate medical-education programs, known as GMEs, by making special payments to teaching hospitals based on their number of residents ($100,000 per resident). This year Medicare's GME payments are expected to exceed $7 billion nationally, with 20 percent, or $900 million, going to train residents in New York hospitals. (The Empire State produces 15 percent of the country's doctors; California is second, producing 9 percent.)

Until now, teaching hospitals had little incentive to curb admissions, and the New York project is designed to cushion the blow of lost funds. During the first year, hospitals will get as much Medicare money as they would with no resident reductions. During the second year they will receive 95 percent of that amount, in the third year 85 percent and so on until the seventh year when bonuses will fall to zero. By then, the hospitals will be training about 2,000 fewer residents than they are now. …

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