TEACHING HOSPITALS IN CRISIS

THE FACILITIES THAT TRAIN DOCTORS AND PIONEER NEW PROCEDURES SCRAMBLE TO SURVIVE MANAGED CARE AND CUTBACKS

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Dr. Warwick Peacock was on Christiaan Barnard's original heart-transplant team in South Africa, but he eventually found heart transplants too routine to present sufficient challenge. In 1986 he came to ucla Medical Center to pioneer new techniques in brain surgery. Last May he faced an unusual challenge: a six-year-old girl suffering epileptic seizures so severe and unremitting that they could be relieved only by removal of part of her brain. First her brain was mapped by a positron-emission tomography scanner, a machine invented at ucla; then those readings were matched against others provided by a more conventional mri scan.

The girl was wheeled into an operating room at 7:30 on a Thursday morning. Dr. Peacock's team exposed the surface of her brain and applied electrodes to stimulate it and provide yet another map to the diseased areas. Surgeons played the pet scan, the mri and the new data over and over on video monitors; the readings on all three had to match before the cutting away of malfunctioning parts of the child's brain could begin. The incisions were delicate, the atmosphere tense and progress slow. Surgeons relieved one another, while gowned students observed intently and residents stood by to watch and assist as needed; in all, perhaps 20 people drifted through the room. After 81Ú2 hours Peacock's team, exhausted but exhilarated, agreed that they were done. The girl recovered quickly and suffered no further seizures.

This is the sort of high-tech wizardry that has earned ucla and other teaching hospitals a crucial role in the U.S. medical system. They are the places where patients find specialized care that is unavailable elsewhere, young doctors learn their art and researchers develop the equipment and techniques that will save lives tomorrow. But all this comes at a fearfully high price-so high that many buyers in today's medical marketplace cannot or will not pay it. As a result, for all their supermodern machinery and fine medical pedigrees, the teaching hospitals are increasingly looking like institutional dinosaurs, exquisitely adapted to yesterday's hang-the-cost medicine practiced primarily by specialists but in need of, well, surgery to survive in tomorrow's world of intensely price-conscious managed care conducted mostly by primary-care physicians. The question is whether the teaching hospitals can slim themselves down enough to survive in this newly stingy atmosphere without sacrificing the quality and innovation that have made them the crown jewels of American medicine -- and the answer is far from clear.

The latest threat comes from Congress, which is moving toward substantial reductions in the growth of Medicare spending and major cuts in the funding of the National Institutes of Health, two important sources of subsidy for teaching hospitals. But the greatest long-range problem is the relentless spread of health-maintenance organizations (HMOS) and managed-care networks. Teaching hospitals traditionally have charged heavy fees for fairly routine procedures to cover the high costs of training and research. Cost-conscious hmos and insurance networks frequently refuse to pay those prices. Since the teaching hospitals cannot survive by performing liver transplants and brain surgery alone but also need the high-volume work of delivering babies and taking out appendixes, they find themselves slashing fees to compete with community hospitals.

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