WASHINGTON AND THE DOCTOR GLUT GOOD THING THEY DIDN'T TAKE OVER HEALTH CARE
(FORTUNE Magazine) – Next time you're killing time in the doctor's waiting room, ponder this paradox: Congress has concluded that there are too many, not too few, physicians in this country. Washington's remedy for this perceived glut: Pay hospitals for not training doctors, much the way Uncle Sam pays farmers for not growing wheat.
Congress is trying to fix a problem it helped create in the first place. Last year, Medicare paid hospitals $9 billion to train doctors--as much as $200,000 per resident in some states. With subsidies that generous, it's no wonder the ranks of newly minted doctors have been expanding three times faster than the population as a whole. There were 98,076 physicians enrolled in residency programs last year, 13% more than there were in 1991. Says Dr. Marvin Dunn, director of the division of graduate medical education at the American Medical Association: "We had unlimited federal funding. Hospitals just kept adding and adding programs."
Not anymore. As part of the balanced budget legislation recently passed by Congress, Medicare will reimburse hospitals only for the number of residency slots they had this year; there won't be any subsidies for new positions. Washington also will offer hospitals a nice incentive to downsize: Those that cut the number of resident positions by 25% over five years will receive "transition payments" equal to 100% of their 1997 subsidies for the first two years, tapering off to 25% by the fifth year.
But does the U.S. really have a glut of physicians? "If that were really true, then there would be a lot of unemployed doctors out there, but that's not the case," says Dr. Benjamin Chu, associate dean of New York University Medical Center. What is clear is that the country is training too many specialists and not enough primary-care doctors. The new legislation requires that hospitals cut only residency slots for specialists, not primary-care positions.
Which brings us back to the waiting room, where you've probably read the same magazine three times by now. Why the wait, if there's a such surplus of docs? Admits Dr. Don Detmer, senior vice president of the University of Virginia and co-editor of a study on graduate medical education: "We haven't taught doctors that other people's time is as valuable as their own"--a problem no amount of legislation will resolve.