Copyright 1999 The New York Times Company
The New
York Times
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November 27, 1999, Saturday, Late Edition -
Final
SECTION: Section A; Page 15; Column
5; Editorial Desk
LENGTH: 780 words
HEADLINE: How Medicine Became Just Another Product
BYLINE: By Daniel Patrick
Moynihan; Daniel Patrick Moynihan is the senior Senator from New
York.
BODY:
Once again, we are reminded that
teaching hospitals are in trouble. In the bill that President Clinton is likely
to sign, the formula for financing graduate medical education
has been challenged.
We have a crisis. Early in 1994, as the Senate
Finance Committee prepared to take up the Clinton administration health-care
legislation, it occurred to me that I knew nothing of the issue. As chairman of
the committee, I asked Paul A. Marks, president of Memorial Sloan-Kettering, to
arrange a seminar for me and my staff. On a January morning, we assembled in the
Laurance S. Rockefeller Boardroom at 10 a.m. At about a quarter past the hour I
was told that the University of Minnesota might have to close its medical
school.
Whereupon my education began. Minnesota is where the
Scandinavians settled. They don't close medical schools; they open medical
schools. What was going on? It was simple enough: managed care had reached the
high plains. The good folk of Lake Wobegon had dutifully signed on, only to
learn that market-based health plans do not send patients to teaching hospitals,
because they cost too much. No teaching hospital, no medical school. The Clinton
administration's plan assumed that health-care costs would continue to rise.
Medicaid expenditures had doubled in the eight years of the Reagan
administration, doubled again in four years of the Bush administration. (If this
geometric progression had continued, it would have doubled in one day, on the
last day of 1996.) The administration's solution was rationing. Cut the number
of doctors by a quarter, specialists by half and so on.
Our committee
went in a different direction. We held a hearing in April 1994. Early on,
Charles J. Fahey, speaking on behalf of the Catholic Health Association, told us
we were witnessing the "commodification of medicine."
Further down the
witness table, we were told that Southern California now had a spot market for
bone-marrow transplants. In other words, we needn't worry about rising health
care costs, as competition would press prices downward. (And indeed, last year
the cost of Medicare actually declined!)
But there would be side
effects. To wit: because markets do not provide for public goods, teaching
hospitals would be at risk. Everyone benefits from public goods, whether or not
they pay for them. Therefore, no one has any incentive to pay. It follows that
for the most part public goods like teaching hospitals have to be paid for by
the public, indirectly through tax exemption or directly through expenditure.
So the Finance Committee bill, passed with bipartisan support in 1994,
included a 1.75 percent assessment (that is, a tax) on all health-insurance
policies, to provide financing for the medical schools and the teaching
hospitals. As I recall, no notice was taken of this. In any event, the Clinton
administration rejected the committee bill, and in the end no legislation of any
kind passed.
Since then, things have not gotten better for teaching
hospitals. A slow, inexorable crisis has emerged, especially in New York, a
medical center unsurpassed on earth. The federal government entered health care
big time in 1965 with the enactment of Medicare and Medicaid. Almost as an
afterthought, Congress also provided funding for medical schools and teaching
hospitals.
It took a generation, but members of Congress have now
discovered that New York does well under this arrangement. And so, Congress has
passed legislation that would reallocate money from New York teaching hospitals
to those in other parts of the country.
Even so, we dodged a bullet.
Just. Earlier versions of the legislation would have taken much more medical
education money from New York hospitals. And the reallocation doesn't take
effect until after Oct. 1, 2000.
That gives us some time to fix things.
The present arcane arrangements have seen their day. Managed care has changed
everything. Medicare can no longer be the primary source of financing for
graduate medical education.
In the last three
Congresses, I have introduced the Medical Education Trust Fund
Act, which would require that the public sector, through Medicare and Medicaid,
and the private sector, through an assessment on health-insurance premiums,
provide financing for graduate medical education. But so far,
only the deans of medical schools and, thank heaven, the
hospital workers' unions, seem to have noticed.
Now then. Which
candidate for president is going to say direct federal support for teaching
hospitals is in order?
These institutions save far more lives than, for
example, the Coast Guard, and indeed, in many ways, they are transforming life
itself. http://www.nytimes.com
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November 27, 1999 
