Teaching hospitals last week pledged to support a bill that would give the government a new way to pay for graduate medical education, but not all hospitals were so enthusiastic.
The bill, proposed by Rep. Benjamin Cardin (D-Md.), would levy a 1% tax on all private insurance premiums to establish a $3 billion trust fund to pay for medical education.
Such a fund would reduce Medicare's share of that burden, which is about
$6 billion per year, Cardin said. Under the current system, the government pays teaching hospitals for their education costs based on the number of Medicare patients they treat.
The Cardin bill also would:
* Require teaching hospitals that receive indirect medical education funds to report annually on their research and charity-care efforts.
* Provide $300 million from Medicare savings to support graduate training programs for nurses and other health professionals.
* Direct HHS to develop a plan to reduce the number of first-year residencies to 110% of U.S. medical school graduates.
Cardin said numerous provider groups, including the Association of American Medical Colleges and the American Hospital Association, support the bill's principles.
The AAMC has formally endorsed the measure, hailing it as a stable source of GME funding.
While the AHA favors the idea of having all insurers, not just Medicare, provide GME funding, the group hesitated to endorse Cardin's bill because it would tinker with the formulas used to calculate hospitals' GME and disproportionate-share payments.
"Until the impact of this redistribution is better understood, AHA is constrained to withhold full endorsement of your legislation," Richard Pollack, the association's executive vice president and director of government and public affairs, wrote in a Feb. 11 letter to Cardin.
Insurers criticized the proposal. "We have strong concerns about a proposal that would impose taxes on premium payers," said Richard Coorsh, a spokesman for the Health Insurance Association of America. "It would drive up the cost of health insurance, and cost is the main reason so many are uninsured."