   
CHILDREN'S HOSPITALS' GME PROGRAMS AND HEALTH PROFESSIONS TRAINING, INCLUDING GENERAL PEDIATRICS, IN THE FY2000 BUDGET Overview Providing a More Equitable Competitive Playing Field — Support for children's hospitals' GME costs is essential to address the serious inequity in GME funding which places these hospitals at serious competitive disadvantage. The independent children's hospitals have few if any Medicare patients. Thus, they do not benefit from the one major source of explicit GME support available today - federal payments for GME through Medicare. There is strong congressional support for the provision of new federal GME funds for these children's hospitals, both as part of broadening the base of GME support, such as an all-payer system of financing for all teaching hospitals including children's hospitals, and as interim support until broad-based GME financing can be achieved. Promotion of Primary Care — Federal health professionals' training grants are needed to promote the training of primary care providers, with strong preference given to programs that will enhance service in medically underserved areas. For example, eligible medical schools and training programs may seek support for efforts to help providers add needed competencies and skills, to broaden their ambulatory and community-based experiences, or to increase the number of faculty and trainees serving underserved, low-income or high-risk populations. These long-standing HRSA grants enjoy strong support in Congress, which repeatedly has funded them, most recently with an increase in FY 1999. The Administration's FY 2000 Budget — The Administration proposes, for the first time, to include $40 million in its budget to take a first step toward providing GME funds for freestanding children's teaching hospitals, which currently receive virtually no Medicare GME funding, since they serve children instead of the elderly. The Administration also proposes elimination of $80 million for grants for health professionals' training in primary care, including more than $18 million for grants for residency training in general internal medicine and pediatrics. N.A.C.H. urges Congress to provide new GME funding for children's hospitals and to retain strong federal support for health professions training grants, because they address two different but important needs in our health care work force. GME Grants for Children's Hospitals - Providing a More Equitable Competitive Playing Field — In the increasingly cost-competitive health care marketplace, the federal Medicare program currently is the only reliable source of significant support for teaching hospitals' GME programs. However, 53 children's teaching hospitals, which do not share a Medicare provider number with a larger institution, receive virtually no Medicare GME support, only because they serve children instead of the elderly. The absence of significant support for either the direct costs of GME or the indirect costs puts this small group of teaching hospitals at a serious competitive disadvantage. This poses a risk not only to the future of the hospitals' own training programs but also to the nation's future pediatric workforce, because they train nearly 30 percent of all pediatricians and the majority of many pediatric subspecialists, including more than two-thirds of pediatric emergency physicians. The sustainability of such subspecialty training centers is especially important, given the concern within the pediatric community that some pediatric subspecialists already are in inadequate supply. Eligible entitles would include only children's teaching hospitals with their own Medicare numbers.
Health Professions Training Grants - Promoting Primary Care Providers Serving Underserved Areas — Authorized by Title VII of the Public Health Service Act, the health professions training grants are designed to promote training of primary health care providers in diverse ambulatory settings, such as child nutrition programs, community health centers, and others. Title VII authorizes federal grants to assist the promotion of graduate education of physicians who are trained for and will enter the practice primary care medicine, such as general internal medicine, family practice, or general pediatrics. They include programs to emphasize the continuity, ambulatory, preventive, and psychosocial aspects of the practice of medicine. In 1994, the General Accounting Office said that Title VII has provided "crucial support for primary care training." Title VII gives explicit preference to the award of training grants to programs with a high rate of success in placing residents in practice settings serving medically underserved areas. Eligible entities include schools of medicine and osteopathy, public or private nonprofit hospitals, and other public or nonprofit entities. Funding History on GME Funding for Children's Hospitals — Under the current system, Medicare pays it share of GME related costs in teaching hospitals. Since children's hospitals care for very few Medicare patients, they receive very little GME support from Medicare — less than one-half of one percent (0.4%) of the support provided to other teaching hospitals through Medicare. Congress established the current system of Medicare GME payments — both direct and indirect medical education payments — in 1983, when it created a Medicare DRG-based payment system for all hospitals, including teaching hospitals. In the 1980s, most payers of health care paid for clinical care sufficiently to cover the added costs of teaching institutions. The fact that the Medicare GME policy did not provide significant support for children's teaching hospitals was not considered a problem, because other payers of children's hospitals' care covered, to at least a certain degree, their added costs of teaching. However, in recent years, as the health care marketplace has become much more price competitive, fewer and fewer payers are willing to cover the added direct or indirect costs of the education mission of a teaching hospital. Increasingly, Medicare is the only significant payer of specifically-designated teaching-related costs. As a result, children's hospitals are unintentionally placed at a competitive disadvantage by their lack of qualification for major Medicare GME support. These children's hospitals make a major contribution to the public good of training physicians and other health professionals but do not receive the Medicare support provided to others for the same mission. The Administration identifies its proposal for $40 million in grants for children's hospitals' GME programs as a first step in addressing the need for significant financial support for these hospitals, until broader-based GME support for all teaching hospitals is achieved. Funding History on Health Professions Training Grants — In recent years, Congress repeatedly has appropriated funds for health professions training grants, both in years in which the Administration has sought major reductions in funding for them and in years in which the Administration has sought small reductions. For example, for FY 1997, the Administration proposed to reduce the HRSA health professions budget by more than half. Congress appropriated a slight increase in funding. For FY 1999, the Administration requested about a $2 million reduction in the health professions budget. Congress both appropriated more than an $11 million increase and reauthorized Title VII. Congress' consistent support for these grants reflects its deep commitment to increase the supply of primary health care providers, especially in areas that lack adequate primary care services. For more information: Peters D. Willson, N.A.C.H., 703/684-1355 x7006
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