Teaching hospitals are taking seriously the threat of proposals for cuts in Medicare's graduate medical education financing program.
Groups representing teaching hospitals said they fear Rep. William Thomas (R-Calif.) might follow through on some of the suggestions he made at a recent hearing on medical education.
Thomas' recommendations underscore the Republican majority's desire to fundamentally change the structure of the Medicare program-including promoting managed care as a cost-containment tool.
"It's clear to me that the picture is much larger than just us," said Dick Knapp, executive vice president of the Association of American Medical Colleges. "But they have to deal with us because we're part of the problem, as they see it, if they want to go to managed care in an aggressive way."
Thomas, chairman of the House Ways and Means health subcommittee, proposed giving medical residents vouchers to pay for their education, rather than tying financing to teaching hospitals' Medicare reimbursement.
The voucher plan aims to encourage more residents to pursue primary-care training in clinics, HMOs or other nonhospital settings. It would be coupled with a limitation on Medicare's financial assistance period to three years, just long enough for primary-care accreditation but not long enough for most specialty programs.
Thomas also suggested freezing the number of residency positions financed through Medicare as a way of reducing an oversupply of physicians.
A spokesman said Thomas had not drafted formal legislation to change the medical education financing system, however.
Asked about some of Thomas' suggestions, HHS Secretary Donna Shalala characterized them as budget cuts aimed at the poor to pay for tax cuts for the rich. Her comments signaled that the Clinton administration's strategy in deflecting deep Medicare cuts will parallel its efforts to defeat Republican-sponsored welfare reform.
"The entire discussion we've had with the Republican leadership has been about budget-cutting, not reform," Shalala said.
There are about 104,000 medical residents in the United States, although Medicare doesn't pay for all of them. The Congressional Budget Office projects Medicare will pay hospitals $5.5 billion for teaching costs in fiscal 1995.
Groups representing teaching hospitals said Thomas' suggestions are off-base. They said managed-care organizations already receive reimbursemnt for teaching costs because they are factored into the adjusted average per-capita cost, the formula used to determine Medicare's payments to HMOs.
In addition, they said teaching hospitals have begun recognizing the need for primary-care training are forming alliances that will allow residents to gain experience in such settings, while still retaining a single entity accountable for the quality of training.
"I think the marketplace is beginning to operate in these areas," said Martha Pofit, vice president of strategic planning for the Healthcare Association of New York State.