THE ASSAULT ON TEACHING HOSPITALS

Abstract

The quality of American health care—unarguably the best in the world—is under siege. Republicans released budget plans last week that would cut subsidies to teaching hospitals that train doctors and perform clinical research. Meanwhile, the private market, whose reform Congress bungled last year, has been doing the same. The two-pronged assault is alarming.

American physicians provide innovative, technically advanced care whose quality can be traced in part to generous subsidies for basic research that Congress has provided through the National Institutes for Health (NIH). The NIH estimates that the Senate budget plan could reduce these subsidies for non-AIDS research over the next seven years by as much as 25%; the cut is deeper if inflation is taken into account.

The proposed NIH cuts are easily identified and will be subject to public scrutiny. Two other threats are harder to spot.

The Federal Government, when reimbursing hospitals for treating Medicare patients, pays an average of 30% extra if treatment is provided in a teaching hospital. The extra payments cover costs associated with training doctors and translating basic research into clinical practice ... Under the GOP budgets, these payments could fall between 30 and 60%.

The other dagger aimed at teaching hospitals comes from the private sector. Private insurers have also paid more for patients treated in teaching hospitals. That practice is ending. Wielding new-found market power, health maintenance organizations and other managed-care groups are driving down hospital rates. They refuse to pay for training or research that does not directly benefit their enrollees.