Teaching Hospitals Are Wary of Losing Federal Money in Reforms

As Congress inches closer to a showdown over legislation that would overhaul the nation’s health-care system, medical educators are eyeing provisions that would expand the primary-care work force. And while they applaud the goal of extending health insurance to most Americans, some educators worry that teaching hospitals could lose millions of federal dollars they have counted on to compensate them for treating poor and uninsured patients.

Those are just two of the pieces of the health-care puzzle that could have a significant effect on medical schools and the students and residents who train there.

Three committees in the House of Representatives have contributed to a bill, which would have to be reconciled with any legislation passed by the Senate. The Senate last week was working to blend bills approved by its finance and health committees. Floor debate could start as soon as this week in the House.

If legislation is enacted that provides health insurance to the overwhelming majority of Americans, it would seem that teaching hospitals, which treat large numbers of low-income and uninsured patients, would benefit. But those safety-net hospitals receive the bulk of the approximately $10-billion a year in “disproportionate-share payments” from Medicare that would be drastically scaled back under the plans now under consideration.

The Senate Finance Committee’s bill would cut 75 percent of those differential payments, which are intended to compensate hospitals for the higher costs of covering low-income patients, over the next 10 years. Some of that money would be redirected to a new fund to cover uncompensated care.

The proposed cuts would not kick in until at least 2015 under bills being considered by both the House and Senate, and would not take effect if larger numbers of people than expected end up uninsured.

Karen S. Fisher, senior director of health-care affairs at the Association of American Medical Colleges, is among those who worry that the remaining 25 percent of the payments might not be enough to compensate teaching hospitals for the cost of caring for patients who would still fall through the cracks, especially if undocumented immigrants aren’t covered.

The Senate Finance Committee bill estimates that 94 percent of the nation’s non-elderly, legal residents would be covered, or 91 percent if undocumented immigrants are included. The House bill’s estimates are 97 percent and 94 percent, respectively. Currently about 83 percent of non-elderly Americans are insured.

“We remain concerned about the levels of coverage and wish they were higher,” Ms. Fisher says. “A disproportionate number of people who are left out will end up being treated at academic health centers.”

The House bill would also make more people eligible for Medicaid coverage. Since teaching hospitals usually lose money on Medicaid patients because of lower-than-average reimbursement levels, that could burden those hospitals further, Ms. Fisher says.

Some medical educators are also disappointed that the leading health-care-reform bills do not provide for expansion of medical training slots for new doctors. Congress has frozen the number at 1996 levels, which could create a bottleneck as medical schools seek to graduate more doctors in the coming years to deal with a projected shortage.

Both the House and Senate legislation would redistribute fewer than 1,000 unfilled residency training slots among a small group of states, a move Ms. Fisher and other medical-education officials describe as inadequate.

The medical-colleges association supports separate legislation that would increase the number of Medicare-supported training positions by 15 percent, or about 15,000 slots.

However, the proposal’s price tag—about $12-billion over 10 years—may have scared off lawmakers, who are simultaneously trying to cut health-care costs. That bill is considered unlikely to pass.

Averting a Primary-Care Shortage

The broader bills in both the House and Senate include provisions to encourage more medical students to pursue careers in primary care, a field that is expected to have serious shortages in coming years. If health-care coverage is extended to millions more people, medical experts warn, those shortages could become severe, particularly in inner cities and rural areas of the country.

Farheen A. Qurashi, a fifth-year student at the University of Missouri at Kansas City, is enrolled in a program that allows her to earn a bachelor’s and a medical degree at the same time. She is taking a yearlong break from her medical studies to serve as legislative director of the American Medical Student Association.

Her group has lobbied for legislation that would make it easier for medical-school graduates, who start out owing an average of $156,000, to pursue primary-care fields, which tend to pay less than other medical specialities.

The House bill would increase Medicare reimbursements for primary-care doctors by 5 percent, and by 10 percent for those working in medically underserved areas. “The way our payment models are structured, students who would otherwise go into primary care worry they won’t be able to pay off their debts if they do,” says Ms. Qurashi.

Both the House and Senate bills would also expand the National Health Service Corps, which offers scholarship and loan-repayment programs that encourage medical-school graduates to practice in underserved communities. Similar incentives would be expanded for graduates of programs in nursing, public health, and other health-care fields.

The leading health-reform bills also call for pilot studies in the “medical home” model, in which doctors are trained, and practice, in nonhospital settings and work closely with nurses, specialists, and other providers to coordinate patient care.

Other provisions would provide support for residency training that takes place in nonhospital settings, where most routine and preventive care occurs.

“There seems to be strong support for changes that would help us move to a wellness system instead of one that focuses on sickness,” says L. Toni Lewis, president of the Committee of Interns and Residents, a group that represents about 13,000 medical residents and is affiliated with the Service Employees International Union.

Last year Dr. Lewis finished her family-practice and geriatric training at Mary Immaculate Hospital, a teaching hospital in Queens, N.Y., not long before financial troubles forced it to close. It had been affiliated with New York Medical College.

“The moment I stepped into a safety-net hospital,” Dr. Lewis says, “I saw the disconnect between all of the great things I had learned in medical school and what our current system is set up to deliver.”

She says she is optimistic that a reform of the nation’s health-care system would go a long way toward fixing that disconnect.