Distress call from teaching hospitals

Reductions: The devil is in the details, such as the $220 billion cut from Medicare, argues a top official of the Johns Hopkins medical community.

February 27, 2000|By Edward D. Miller

HEADS OF academic medical centers wont soon forget the closing year of the 1900s. One simple piece of legislation passed by the U.S. Congress, the Balanced Budget Act, battered the bottom lines of the nations leading teaching hospitals with such ferocity that many are fighting for survival.

Though Congress has partially restored those funds to give those hospitals a lifeline, whats clear is that we have reached a point of real crisis in American medicine.

Johns Hopkins didnt feel the force of the act as powerfully as many of our fellow university medical centers, thanks in part to Marylands unique method for meting out hospital payments. Yet we have no doubt that if academic medical centers are forced to continue to rely on federal and state reimbursement programs for as much as 50 percent of our budgets, it is only a matter of time before Hopkins, too, will be forced to cut back programs that are transforming world medicine.

Make no mistake, I have no philosophical quarrel with the Balanced Budget Act, per se. Meant to prevent the United States from engaging in the kind of wanton overspending that drove the national debt into the trillions during the 1980s, the bill aimed simply to cut national expenditures to equal available capital. But the devil is in the details. As part of this plan, $220 billion came out of the Medicare budget, and it is this lost reimbursement that has devastated well-managed and revered institutions such as Stanford, the University of Pennsylvania and Massachusetts General Hospital.

By cutting Medicares payments to physicians and hospitals, Congress -- perhaps without realizing what it was doing -- slashed the income that academic health centers count on to support our most fundamental services: the care of this nations sickest and poorest patients and the training of tomorrows physicians.

If these academic centers are to maintain their roles as clinical and educational leaders, five main issues must be immediately addressed by our national leaders:

(1) The United States must introduce some type of universal health coverage to insure all Americans and reimburse physicians for basic catastrophic medical care. Because university hospitals are commonly located in inner cities, they -- not community or private hospitals -- shoulder the brunt and often the unreimbursed cost of providing care for the nations indigent and uninsured, a number that has grown from 38 million to 44 million people during the past few years.

(2) The overhead for delivering care in this country must be reduced. Physicians waste thousands of hours annually dealing with insurance companies to verify exactly who and what is covered. For starters, what the nation needs is a standard, easy-to-understand health form, common to every insurer and every patient.

(3) Funding of graduate medical education -- residency programs based at teaching hospitals -- must be safeguarded and shared by insurers. Hospitals, HMOs and patients all over this nation benefit from the training academic medical centers provide to physicians just entering their specialties, but academic institutions receive minimal support for these expensive programs. Currently, only the federal government funds graduate medical education. Why shouldnt HMOs also contribute to the cost of training top-notch physicians?

(4) The nations most advanced hospitals must be additionally reimbursed for the treatment they provide to the most severely ill patients. Statistically, the sickest people (who are often the poorest) need the most sophisticated care. A small cluster of large academic hospitals -- we call them quaternary care facilities -- meet this social responsibility, but their reimbursement does not come close to covering their costs for delivering this care.

(5)Reimbursement must include the cost of innovative technology and testing new drugs. By introducing new medical equipment and medications, academic medical centers have taken giant steps toward defeating once untreatable conditions. Though these advances will reduce health care bills nationwide, academic medical centers shoulder the upfront costs for new technology and clinical trials with no reimbursement.

The state of Maryland is one of the few in the nation that try to factor the cost of uncompensated care and graduate medical education into its hospital reimbursement rates, so Johns Hopkins, unlike so many other academic institutions, has been able to predict its reimbursements from year to year.

Now, it is time for the federal government to recognize the contributions and requirements for academic medical centers nationwide and come up with a rock-solid system for funding them.

Throughout America, a general sense of unhappiness with our health care system prevails.

Patients complain of a lack of personal involvement by their physicians. Physicians buried in paper work yearn for simpler times. Insurance companies, painted as bad guys, take issue. And employers witnessing big increases in their insurance costs ask why.

For those of us at the helm of academic medical centers, the issues are even more complex. The nation must decide if it is willing to pay the price for our institutions to maintain their positions as leaders in world medicine.

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