Copyright 1999 The New York Times Company
The New
York Times
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November 24, 1999, Wednesday, Late Edition -
Final
SECTION: Section A; Page
1; Column 6; Metropolitan Desk
LENGTH: 1265 words
HEADLINE:
Medicare Cuts Jolt New York Hospitals That Train Doctors
BYLINE: By ROBERT PEAR
DATELINE: WASHINGTON, Nov. 23
BODY:
Teaching hospitals in New York said today
that they would lose tens of millions of dollars in federal Medicare money under
a budget bill that was passed by Congress last week and is soon to be signed by
President Clinton.
Most hospitals, nursing homes and other health care
providers around the country supported the legislation, because it would restore
some of the money cut from Medicare in 1997. But for more than a dozen teaching
hospitals in New York, which depend heavily on federal aid, the gains would be
more than offset by the loss of money they receive for training doctors. The
legislation, part of an omnibus appropriations bill, would reduce huge
disparities in what Medicare pays to train doctors in different parts of the
country. The average Medicare payment for each trainee is more than four times
as much at some New York hospitals as in other big cities. Payments to those
high-paid hospital would be frozen for two years. Then, in each of the next
three years, the government would provide them with less than the normal
adjustment for inflation given to all other teaching hospitals.
Calculations by the Greater New York Hospital Association show that
Montefiore Medical Center in the Bronx would lose $10 million from 2000 to 2005,
while Beth Israel Medical Center in Manhattan would lose $8.3 million and
Episcopal Health Services, with hospitals in Queens and Suffolk County, would
lose $4.5 million.
Over that period, the association estimates, Harlem
Hospital Center and Nassau County Medical Center would each lose $3.6 million,
North Shore University Hospital would lose $2.8 million and Long Island Jewish
Medical Center would lose $2.7 million.
Some of the major New York
teaching hospitals have hundreds of millions of dollars in annual revenue, but
most are poised uneasily between profit and loss, and some have experienced
operating losses in recent years. Montefiore, for example, says it has more than
$1 billion in revenue this year, including $85 million in Medicare payments for
graduate medical education. But over all, the hospital will
have an operating loss of $1 million to $5 million this year, said Dr. Spencer
Foreman, president of Montefiore.
The overall bill had broad support in
Congress, and President Clinton has said he plans to sign it next week. The
House Ways and Means Committee said the bill would create "a more rational and
equitable" method of paying for graduate medical education.
New York's Congressional delegation, led by Senator Daniel Patrick
Moynihan and Representative Charles B. Rangel, has historically protected the
state's teaching hospitals, which train more than 15 percent of the nation's
doctors. New York lawmakers headed off even deeper cuts this year. But they
could not halt the momentum to make fundamental changes in the reimbursement for
teaching hospitals.
The winners include hospitals in Texas and
California, two states with powerful House members who have a large say on
Medicare policy. Academic medical centers in Texas, California and other Sun
Belt states have risen in stature, even as lawmakers from those states gained
influence in Congress in recent years.
Representative Eliot L. Engel,
Democrat of the Bronx, said the changes in Medicare reflected a Congressional
"bias against New York." Such bias, he said, has become more pronounced since
Republicans won control of the House five years ago.
Dr. Foreman of
Montefiore echoed that view. "This was really pushing a bean up New York's
nose," he said of the legislation.
On the House floor last week,
Representative Mark Foley, Republican of Florida, said teaching hospitals in New
York had been "bellyaching" about not getting enough money. Off the House floor,
Congressional aides spoke disparagingly of hospital executives who rode
limousines around New York City.
New York hospitals can take consolation
in two facts. First, earlier versions of the Medicare legislation would have
taken much more money from them. Second, most of the cuts take effect after Oct.
1, 2000. New York hospitals and politicians can try to persuade Congress to
moderate the cuts before then. If Democrats win control of the House in next
year's elections, Mr. Rangel will be in line to head the Ways and Means
Committee.
Dr. Foreman said Montefiore would consider several steps to
cope with the loss of federal money. "We have no choice but to whittle away at
the work force, look at some programs that are not as productive as you might
like and creatively pursue new lines of business," he said.
Asked what
services he would consider reducing, Dr. Foreman said: "Any and all. There are
no sacred cows."
Thomas J. Hayes, executive vice president of Beth
Israel, said the cuts in federal aid for graduate medical
education contradicted the original purpose of the Medicare
legislation.
"This was supposed to be a bill to provide relief from the
unintended consequences of the Balanced Budget Act of 1997," Mr. Hayes said.
"The cuts in medical education came out of the blue at the last minute."
Medicare's primary mission is to finance health care for people who are
elderly or disabled. But it has also become the main vehicle for federal aid to
teaching hospitals, providing some $7 billion a year. About one-third of the
money helps pay the direct costs of medical education programs, including the
salaries of doctors in training and their teachers and a share of overhead costs
for items like classrooms.
Health policy experts have long been aware of
regional disparities in Medicare's support for teaching hospitals. At least a
half-dozen blue-ribbon panels have studied the issue in the last decade. But no
action seemed imminent until The New England Journal of Medicine documented the
disparities this summer. An article in the journal on July 22, using federal
data, showed that teaching hospitals in New York got three or four times as much
for each trainee as those in Los Angeles or Cleveland, and seven times as much
as those in Houston.
Armed with this evidence, Representative Bill
Thomas, the California Republican who is chairman of the Ways and Means
Subcommittee on Health, pushed for changes in the way Medicare pays teaching
hospitals. Under the new formula, only the highest-paid teaching hospitals --
those with Medicare payments more than 40 percent above the national average for
each hospital resident -- will lose money.
The disparities in Medicare
payments have deep historical roots, reflecting differences in the way
graduate medical education has been financed. In the Northeast,
Dr. Foreman said, teaching hospitals have borne much of the cost, while
elsewhere state governments and medical schools have paid a larger share.
Although the biggest losers are in New York, some teaching hospitals in
other parts of the country will also lose money. The Greater New York Hospital
Association estimates that Howard University Hospital in Washington will lose
nearly $3 million from 2000 to 2005, while the Hospital of the University of
Pennsylvania will lose $2.2 million and St. Louis University Hospital will lose
$1.3 million.
The association estimates that Pitt County Memorial
Hospital, which is affiliated with the East Carolina University School of
Medicine in Greenville, N.C., will lose $3.3 million from 2000 to 2005.
David C. McRae, chief executive of the Pitt County hospital, said:
"Historically, we have been more dependent on Medicare than many other
institutions. Therefore, like some teaching hospitals in New York, we are
inordinately hard hit by the new legislation."
http://www.nytimes.com
GRAPHIC: Graph: "KEEPING TRACK: Less Money for
Teaching"
These teaching hospitals are scheduled to lose federal Medicare
money. The amounts, while only a small part of the hospitals' annual revenues,
may be the difference between profitability and loss.
|
|
AMOUNT TO BE REDUCED, |
| HOSPITAL |
2000-2005 |
|
| Montefiore Medical Center |
$10,006,489 |
| Beth Israel Medical Center |
$8,321,661 |
| Episcopal Health Services |
$4,505,591 |
| Harlem Hospital Center |
$3,607,849 |
| Nassau County Medical Center |
$3,551,136 |
| Catholic Medical Center |
$3,148,733 |
| North Shore University Hospital |
$2,842,071 |
| Long Island Jewish Medical Center |
$2,714,035 |
| Hospital for Joint Diseases |
$716,952 |
| Hospital for Special Surgery |
$435,009 |
| Mount Sinai Medical Center |
$106,572 |
(Source: Greater New York Hospital Association)(pg.
B5)
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November 24, 1999 
