Teaching hospitals are mounting an all-out blitz on Congress, pressuring lawmakers to boost Medicare funding after suffering through a nearly 30% reduction in payments since 1997 for indirect medical education.
Launching a comprehensive advertising campaign and a grass-roots lobbying barrage, the Washington-based Association of American Medical Colleges hopes to persuade lawmakers to adjust payments for indirect medical education from 5.5% to the previous level of 6.5% as part of the Medicare reform proposals now being considered by a congressional conference committee.
The nation's 1,100 teaching hospitals, which use the federal funds to train future physicians and offset the cost of patient care, will lose $794 million in indirect medical education funds in fiscal 2003 and stand to lose $4.2 billion over the next five years if the adjustment isn't made, association officials said. The level was cut to 5.5% from 6.5% last October.
"We continue to keep up the pressure," said Lynne Davis Boyle, the AAMC's assistant vice president for governmental relations. "For us, we've maintained the intensity and perhaps have strengthened it."
Despite indirect medical education cutbacks and warnings about their impact on education and patient care, major teaching hospitals continue to enjoy some of the highest Medicare profit margins, even though their costs can run as high as 30% above other acute-care facilities. Major teaching hospitals had inpatient margins of almost 23% in 2000, according to the Medicare Payment Advisory Commission, the highest margin of any category of hospital, eclipsing large urban hospitals, which ranked No. 2 with margins of 14.6%. The Medicare margin for all hospitals in 2000 was 10.8%, according to MedPAC.
Asked how those on the fence in the House-Senate conference committee might react to the beefy profit figures, Davis Boyle said, "I think it will give some lawmakers pause, for sure."
But, she added, the accurate fiscal picture for all teaching hospitals is not nearly as rosy. Total profit margins for all teaching hospitals stood at about 1.4% in 2000, the lowest of any category of hospital, Davis Boyle said. The total for all hospitals was 3.4%, according to MedPAC.
Indirect medical education funds represent a percentage add-on to the Medicare prospective payment system rates based on a ratio of residents to beds and are meant to help cover the costs that hospitals incur in training doctors. The adjustment represents an additional 5.5% for each 10% increase in the ratio of residents to beds. A hospital with 10 residents and 100 beds would expect an additional $5.50 in federal payments for each $100 billed, Davis Boyle said. Indirect medical education payments, which total about $5 billion a year nationwide, would increase with the ratios of residents to beds.
In congressional testimony in March, Glenn Hackbarth, chairman of MedPAC, said the current adjustment of 5.5% "provides payments about twice the level justified by the empirical evidence of the relation between teaching activity and hospital's Medicare costs" (See profile, p. 32).
Officials with the AAMC said teaching facilities make up 20% of the nation's hospitals yet conduct about two-thirds of the most highly specialized surgeries, treat nearly half of all specialized diagnoses, train almost 100,000 resident-physicians and supply more than 70% of the hospital care provided to the nearly 43 million uninsured U.S. citizens.
The AAMC, which has joined coalitions of like-minded groups in the past to fight for increased federal funding, is now teamed with the American Hospital Association to lobby for increased indirect medical education funds. Davis Boyle said the effort includes personal pleas to congressional leaders from some high-profile physicians and a series of advertisements over the last several weeks in key Capitol Hill publications. "We're trying to keep the noise level up," Davis Boyle said.