Alternative health care bills offer hope of more money for teaching hospitals NTC

June 12, 1994|By Houston Chronicle

WASHINGTON -- The nation's research and teaching hospitals got good news last week from congressional committees that are beginning to shape health care legislation.

Two Senate plans and a House proposal provide more money than President Clinton's initial proposal for hospitals that are responsible for training doctors.

Under the Clinton plan, many of the hospitals would lose funds because of recommended cuts in the Medicare program that allocates about $5.8 billion annually for the training of physicians.

Many of these hospitals, which incur higher costs to train residents, also fear that they will not be able to compete for patients in a managed care environment, an approach favored in various health reform proposals.

But some hospitals that train physicians could stand to gain from proposals moving through Congress.

Health reform legislation still has a long way to go in Congress, and the pending bills are likely to be dramatically altered before final passage. But teaching and research hospitals have powerful allies, particularly in the Senate.

Last week, the chairman of the Senate Finance Committee, New York Democrat Daniel Patrick Moynihan, proposed an Academic Health Center fund of $41.83 billion over five years to be financed in part by a 2.5 percent tax on health premiums. Additional money would be distributed to graduate nurse education programs, medical schools and biomedical and behavioral research.

Another bill approved last week by the Senate Labor and Human Resources Committee would levy a 1 percent tax on premiums to help pay for a program similar to Mr. Moynihan's, although it doesn't include the nursing program.

The bill, crafted by Sen. Edward Kennedy, the Massachusetts Democrat who heads the Labor and Human Resources Committee, would allocate about $65 billion for academic health centers over five years.

A House Ways and Means plan proposed by the panel's acting chairman, Florida Democrat Sam Gibbons, also would create a temporary, five-year, $7.8 billion fund for teaching hospitals and research centers. The Gibbons bill relies on a 2 percent premium tax to generate revenue.

The Gibbons bill also designates nine cancer centers as "essential community providers," which means they have to be included in all health plans offered in a region.

But the Gibbons bill also would cut $12.2 billion from the Medicare program for teaching hospitals through 2004. And it does not provide for continuing the other teaching hospital program funded by the premium tax after 2000.

Hospital officials were more enthusiastic about the Senate plans that provide permanent funds and do not call for cuts in the Medicare program.

"The Senate is obviously the high water mark for academic health centers and teaching hospitals," said Kitty Allen, director of government relations for Hermann Hospital in Houston, the predominant teaching hospital for the University of Texas Medical School.

Ms. Allen estimated that Hermann could lose $13 million through 2000 under the Clinton plan.

While some lawmakers predict that levying an additional tax to helpteaching hospitals may provoke opposition, hospital administrators -- including Ms. Allen -- argue that the funding is appropriate because these institutions are taking on additional financial burdens to ensure that doctors are trained properly.

"You can't train physicians just by using the textbook," Ms. Allen said.

Apart from the amount of money allocated to these institutions, a goal of these plans is to shift funding for training physicians from the Medicare program to a broad-based tax, such as the proposed tax on health premiums. When Medicare, the federally financed health insurance program for the elderly, was established in 1965, Congress reasoned that it should include money for training physicians, because that program would increase the demand for physicians.

The current efforts toward health reform are aimed at expanding health insurance to the non-elderly population. And members of Congress and hospital administrators say it is fair to ask a wider group of people to pay for training medical professionals.

The Medicare program funds about 1,000 teaching hospitals, with about 400 of those receiving the bulk of the funds.

The money is distributed by a complicated formula that involves the number of resident physicians and beds at a hospital.

"You get more money the more residents you have and the more beds you have," said Mary Beth Bresch White, legislative analyst at the American Association of Medical Colleges.

She said the association was happy with the Senate programs but still concerned about the House Ways and Means plan, which would not provide continuous funding.

Mr. Moynihan has been particularly concerned about teaching hospitals, she said, because 15 percent of the nation's residents are trained in New York.

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