Paying Hospitals to Train Fewer Doctors

NEW YORK: The federal government, which pays farmers for crops they dont grow, now proposes to pay hospitals for doctors they dont train. In a strategy applauded by medical economists, the Medicare program has begun a pilot project aimed at reducing the number of new doctors training in teaching hospitals, on the theory that producing fewer specialists means generating fewer unnecessary medical tests, treatments and hospitalizations. Under the program, New York teaching hospitals, which train more doctors than any other city (15 percent of new residents) will earn $400 million in training subsidies during the next six years so long as they produce 2,000 fewer doctors, for a decrease of 20 percent in training rosters. Medicare, which has been subsidizing the physician education for thirty years, hopes in this way to wean the teaching hospitals away from the profitable practice of turning out an excess of specialists. Currently, hospitals earn an average of $100,000 for every resident they train, but pay the residents less than half of that, using the rest to bolster their overall finances. Says Bruce Vladeck, administrator of the Health Care Financing Administration, which runs the Medicare and Medicaid programs: "Until now Medicare has been giving hospitals an incentive to hire more residents. We need to change that." Even with such a generous specialist detox program, Medicare will save $300 million by compensating the New York institutions in this way. Under the new system, participating hospitals will be credited for each residency slot they leave vacant, and will be encouraged to use those funds to hire more nurses and physician assistants or other medical staff to care for patients. Unlike agricultural subsidies, the new hospital fees are a limited program, ending by the seventh year. As bizarre as the program may seem, health care experts agree that something needs to be done to reduce hospital dependence on Medicare training funds without producing such drastic measures as cuts in care for the poor and uninsured. In the process, Medicare hopes that the hospitals will direct more training resources to basic family medicine. One measure of the soundness of the idea: already, hospitals all over the country are clamoring to get into the new program.