Saving teaching hospitals

October 24, 1999

Here is an excerpt of an editorial from the Los Angeles Times, which was published Wednesday.

AMERICA'S teaching hospitals are acclaimed for their use of advanced medicine to save patients. In August, for instance, doctors at Children's Hospital Los Angeles successfully labored around the clock on two young boys -- one of them critically wounded -- who were shot at a Granada Hills Jewish center.

Acclaim won't pay doctors or their instructors, however, and teaching hospitals are major targets this year for the $60 billion that Congress plans to cut from Medicare's hospital payments over four years under the 1997 Balanced Budget Act.

Some $14 billion in cuts are slated to come out of the Medicare dollars the government now sends to teaching hospitals. That unfairly burdens the academic medical facilities, which perform vital roles such as teaching medical residents and treating a high share of low-income uninsured people.

Last week, the Senate began considering an amendment to the Budget Act introduced by Sen. Daniel Patrick Moynihan, a New York Democrat, which would offset the cuts over the next decade with direct payments from Medicare. It deserves prompt passage.

Medicare is not the most efficient mechanism for supporting teaching hospitals. It pays hospitals largely through "graduate medical education" subsidies that are needlessly complex and difficult for federal regulators to oversee.

Nevertheless, this measure is the only viable proposal at hand for correcting this serious problem. Teaching hospitals should not be stripped of money just because Washington's allocation system is imperfect.

The ideal solution would be to develop a payment system that calculates the hospitals' social benefit and then compensates them. For example, independent children's hospitals represent less than 1 percent of all hospitals, but they train 30 percent of the nation's pediatricians and nearly half the pediatric specialists.

A solution will be years in coming, given Congress' recent failure to agree on any Medicare reforms despite a year of intense negotiation.

Meanwhile, the Moynihan bill is a good stopgap measure to protect these indispensable hospitals while Washington wrangles over more fundamental reform.

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