N.Y. hospitals quit program to train fewer doctors

Hospitals were counting on a decline in the number of patients

May 11, 1999|By Lisa W. Foderaro | Lisa W. Foderaro,New York Times News Service

NEW YORK -- Two years ago, dozens of teaching hospitals across New York state embraced an unusual pilot program to ease the nationwide glut of physicians. The federal government would pay bonuses to the hospitals if they trained fewer doctors, just as it once paid corn farmers not to grow corn.

But half those hospitals have dropped out of the plan after finding that they cannot function without the low-cost labor provided by doctors in training, known as residents.

The development, which comes even as the government is planning to expand the New York pilot program nationwide, raises doubts about federal efforts to curb the number of doctors in the nation, and it illustrates a conundrum of health care today. While society at large can ill afford to have an oversupply of doctors, which experts say drives up the cost of health care, hospital officials cannot afford to run their institutions without the trainees who will add to that oversupply.

The financial benefits to teaching hospitals are still so great that there's an incentive to train more physicians, whether they are needed in the long run or not, said Edward Salsberg, director of the Center for Health Workforce Studies at the State University of New York in Albany.

The pilot program in New York was devised by officials from the Greater New York Hospital Association, an influential trade group. It was approved in early 1997 by the federal agency that pays for the training of physicians, the Health Care Financing Administration, which hoped to reap eventual savings of hundreds of millions of dollars.

Essentially, hospitals needed to cut 20 percent to 25 percent of their residents over six years to receive the subsidies.

But the hospitals found that in many cases, they were replacing the trainees -- fully qualified medical doctors who log 80-hour weeks and earn about $50,000 a year -- with more established doctors, who work a more typical 40-hour week and earn about $150,000.

It became clear how indispensable the residents are to providing high-quality care on a day-in, day-out basis, said Kenneth Raske, president of the Greater New York Hospital Association. When you actually began to go to the drafting board and engineer it, that's when all the problems began to pop up. It became clear that they couldn't do it.

The hospitals that have dropped out -- mostly large private institutions like New York Hospital and Beth Israel Medical Center -- knew what the program entailed when they entered it. But they had been counting on two things that never materialized: declining patient populations, which would reduce the need for residents, and sharp cuts in the Medicare reimbursements paid to hospitals to train doctors.

The two dozen hospitals that have remained in the program have, in fact, experienced declines in their patient loads, making it easier for them to pare their resident positions.

The Westchester Medical Center in Valhalla, N.Y., eagerly joined the program but soon discovered that the replacement costs were extraordinary, said Edward Stolzenberg, the centers director.

Center officials estimated that it would actually cost the institution $1.5 million a year to stay in the federal program. So three months ago, they withdrew and are now planning to put back most of the 40 resident positions they had cut.

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