Most of the added payments that Medicare makes to teaching hospitals for physician training are directed to specialists, according to a government report released last week.
The General Accounting Office found that 72% of Medicare's direct graduate medical education payments are used to train non-primary-care interns and residents. The GAO is Congress' investigative arm.
From 1989 through 1991, Medicare paid on average $601 million annually for specialist training and $232 million for primary-care training through direct payments, the GAO said.
Rep. John Conyers Jr. (D-Mich.), chairman of the House Government Operations Committee, who requested the report, said it showed that hospitals "have gotten a free ride to train as many specialists as they like."
Medicare reimbursement for physician training has "helped hospitals get publicly subsidized specialty labor that brings them higher reimbursement rates," Mr. Conyers said. At the same time, it has "contributed greatly" to the imbalance of specialists and primary-care physicians, he added.
In 1992, Medicare paid $1.46 billion to finance its share of teaching hospitals' direct training costs, and an additional $3.8 billion for such indirect costs as the greater use of tests, higher staffing ratios and the increased use of procedures associated with teaching hospitals. The GAO did not compute the breakdown of direct Medicare payments for training of specialists vs. primary-care physicians for 1992.
The GAO also could not compute the distribution of indirect payments from 1989 to 1991, because those payments are used to cover other teaching hospital costs, such as treating a high proportion of poor and severely ill patients.
The imbalance in payments for training of specialists and primary-care physicians persists partly because Medicare relies on hospitals to determine the specialty distribution of physicians in training. As a result, hospitals base those decisions on their own needs as opposed to the "health and medical needs of the community," the GAO said.