So why would healthcare reform make things worse for America's AMCs? The reason is because of a failure of Congress to recognize the current plight of AMCs and how even small changes in healthcare management could have enormous negative effects. For example, congressional analysts suggest that AMCs that care for underserved urban areas will have improved finances because the many patients they now treat who are uninsured will have insurance under healthcare reform.
This simplistic view has not been supported by data. Studies have shown that the greatest costs for an urban AMC are the homeless, the disabled, the mentally ill and substance abusers. The proposed new forms of health insurance would not cover the cost of care for these individuals while the federal and state payments that presently cover indigent patients will be eliminated. AMCs are further threatened by legislative proposals that would slow the growth of Medicare payment rates while at the same time reallocating payments in order to obviate geographic disparities in spending and limit the amount of money going to higher-priced hospitals.
While a large number of factors are responsible for these geographic disparities, AMCs are simply more expensive than a community hospital as they support expensive technology, education and research. To assume that an AMC can fulfill its societal missions at the same cost as a community hospital is ill-conceived. In addition, the proposed legislation fails to address the current disparities in reimbursements from private insurers to different AMCs in the same or different states.
A second concern is that healthcare reform will overwhelm the capacity of urban medical centers. Whether through an expansion of Medicare or an increase in the number of privately insured patients, a sudden increase in patients coupled with a decrease in Medicare reimbursements will severely stress the capacity of many urban AMCs. This problem may be compounded as community hospitals and physicians refuse to care for patients with public insurance or less than optimal private insurance and funnel those patients to already overcrowded AMCs.
A dramatic increase in patient volumes comes at a time when it is increasingly difficult to recruit and retain academic physicians because of the economic challenges at many AMCs. Congress has also not recognized that reform comes at a time when regulatory agencies have mandated strict restraints on the number of hours that a post-graduate trainee can work and the number of patients for whom they can care. AMCs are now faced with the enormous expense of having to hire physician extenders or “house physicians” to provide care that was provided a decade ago by a resident.
As recently pointed out by Neil Miller, M.D., an ophthalmologist at Johns Hopkins University, in order for an AMC to provide high-quality and cost-effective care for an increasing number of insured patients, they must develop a disease-management program through a collaborative network of local hospitals and community-based physicians. However, these types of programs take time to establish and require an infusion of capital. A marked increase in Medicaid patients could also be financially disastrous in the absence of a Medicaid fee schedule that is adjusted to match the severity of disease in the patient population. Thus, without the creation of both a national and local infrastructure for disease management, the safety net provided by many urban AMCs could simply collapse.
Congress has also ignored the severe healthcare workforce crisis. Individual states and regions have developed new medical schools. However, the sustainability of these schools in the face of severe budget cuts in many states is questioned. In addition, students will not be able to continue to support six-figure debt while reimbursements for physician services decrease and overhead costs increase. While Congress has proposed the creation of a “service corps,” neither its size nor its proposed reimbursement schedule will dent the current crisis.
Most importantly, Congress has not recognized that the current cap on the number of post-graduate training positions supported by Medicare has effectively limited the number of trainees in the U.S.—independent of the number of new medical schools that are opened. Members of Congress have supported an increase in the number of residency positions; however, this proposal has important limitations. It is focused exclusively on increasing the number of primary-care physicians at a time when there is an equal need for specialists, it is unclear how the new residency slots would be distributed geographically, and payments are made to hospitals—not to residents or teachers.
There is no doubt that the American healthcare system needs reform and that all Americans have an equal right to have access to healthcare. However, any attempts at reform must take into consideration the critical role that America's AMCs play in healthcare. Policy analysts must work with academic leaders to understand how changes in healthcare reform will influence the economics and future of this heterogeneous group of healthcare centers and modify reform accordingly so that they can continue to fulfill their societal obligations.
Arthur Feldman, M.D.
ChairmanDepartment of MedicineJefferson Medical CollegePhiladelphia
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