A proposed change in the way Medicare pays hospitals for training physicians has struck fear in most hospital groups, except the National Association of Children's Hospitals.
Tired of losing out on most of the federal funds for medical education, the children's hospital lobby is quietly pushing for a new source of medical education money for its exclusive benefit.
The funds would come through a bill introduced last week by Sens. Bob Kerrey (D-Neb.) and Christopher Bond (R-Mo.). That measure would guarantee $285 million a year in new graduate medical education payments to children's hospitals over a period of several years.
The industry split is based on the fact that traditionally, children's hospitals that train physicians have not enjoyed the level of medical education funding that their acute-care counterparts have, said Peters Willson, vice president for public policy at the NACH. Teaching hospitals receive such funding based on how many Medicare patients they treat, and children's hospitals do little if any Medicare business.
"It's our hope that when the funding (under the Kerrey-Bond bill) ends, we would have a broader-based system for funding medical education," Willson said.
Meanwhile, the National Bipartisan Commission on the Future of Medicare is entertaining a proposal that would move $2.2 billion in direct medical education funding to a separate discretionary account from the Medicare trust fund.
Another $3.9 billion in indirect medical education money would remain in the trust fund under the plan proposed by Sen. Bill Frist (R-Tenn.), one of the commission's 17 members. The formula for determining the amount of indirect funding would change, however.
The Association of American Medical Colleges is leading the charge to block the proposal, arguing that moving the money will make funding more vulnerable to budget cuts. The AAMC has been joined by the American Hospital Association and the Catholic Health Association.
"Once we lose Medicare as a payer (of medical education costs), it becomes a general revenue finance responsibility," said Dick Knapp, executive vice president at the AAMC, which represents 125 teaching hospitals. "The money would not be as stable as it is now under the (Medicare) trust fund."