Don’t cut Medicare funds for teaching hospitals!

It’s hard to see how legislators could be more shortsighted.

As Washington leaders bargain to reduce the deficit and avoid a government default, one cost-cutting proposal on the table would sharply reduce Medicare payments to teaching hospitals for the costs of training doctors and providing specialized services like trauma care.

That decision could have a severe impact on the staffing in all California university medical centers and V.A. hospitals, which depend heavily on residents for patient care at a cost-effective pay rate of only $10 to $14 per hour. Further, we would be setting ourselves up for severe physician shortages in years to come.

Medicare currently spends $9.5 billion a year, less than 2% of its total budget, in payments to teaching hospitals. That amount could be cut by as much as $4 billion, or nearly in half, if lawmakers don’t come to their senses. Those funds support resident salaries, malpractice insurance, equipment, and the cost of having senior attending physicians available to supervise residents.

The American population is aging, and so are many of its physicians. In the next 15 years America will face a shortage of up to 150,000 doctors, according to the Association of American Medical Colleges. As older doctors retire, the supply of doctors now being educated is not keeping up with demand. The Balanced Budget Act of 1997 capped the number of residency positions the government could subsidize. But current estimates are that it will take at least 1.3 physicians to replace each one who retires, so we need new residency positions even more.

If the Medicare cuts become reality, it’s possible that family practice training programs would be spared, since attracting more doctors into primary care has been an established goal of health care reform. Yet shortages loom in specialized medical fields too: cardiology, obstetrics and gynecology, general surgery, and cardiothoracic surgery, for example, as well as anesthesiology.

The American Heart Association predicts there will be 20 million more Americans with heart disease in 2020 than in 2000. Of the 16,500 general cardiologists in the U.S., more than 40 percent are age 55 or older. But fewer than 800 new cardiologists complete training each year, a number that can’t budge because of the cap on residency positions.

In obstetrics and gynecology, malpractice insurance costs in many states have skyrocketed to the point that many doctors decide to leave practice or stop delivering babies. We’re fortunate that California has a limit on malpractice awards that has kept insurance affordable here and kept ob-gyn doctors in practice. But according to the American College of Obstetricians and Gynecologists, 22 states—including populous states like Illinois and New Jersey—now lack sufficient ob-gyn doctors to meet patient needs.

The shortage of general surgeons and cardiothoracic surgeons seems surprising, given their traditionally high status and incomes. But the payment that a general surgeon receives for doing a straightforward hernia repair has declined 30% since 1993, so fewer young surgeons stay in general surgery today. If a town can’t recruit a general surgeon, the local hospital’s emergency room may be forced to close and a patient may have to travel a long distance for a simple appendectomy. Cardiothoracic surgery programs turn out only about 100 graduates each year—not even keeping pace with the numbers who retire.

What about anesthesiology? A RAND study last year determined that there are currently shortages of anesthesiologists in 25 states, amounting to a need for an additional 3800 FTEs. If the demand for surgery and procedures requiring anesthesia continues to escalate, that shortage could more than double by 2020.

Whether they’re Democrats or Republicans, lawmakers need to support the Medicare funds needed for residency training. If they continue to reduce payments to physicians and teaching hospitals, the shortage of doctors as well as patients’ access to care certainly will get worse.

We’re already seeing the consequences of shortsighted budgeting here in California. The University of California at Riverside has finished building a new medical school, which was scheduled to open in 2012. The latest state budget denied the medical school the funds it needs to gain accreditation. Without that money, the medical school will not be able to open for at least another year, and can’t even accept applications. Meanwhile, the new buildings stand idle.

Reining in wasteful spending is the job of our elected leaders. Failing to fund the training of the next generation of doctors is not the way to go about it, either at the state budget level or by cutting Medicare funds for teaching hospitals. We need to tell our Congressional representatives on both sides of the aisle not to bargain away the future of American health care.

This post appeared on CSA Online First on July 18, 2011

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