Jim Choate ravage at
Sun Aug 24 08:10:09 PDT 1997

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      Doctor graphic August 24, 1997
     Web posted at: 10:22 a.m. EDT (1422 GMT)
     WASHINGTON (CNN) -- In an effort to reduce a glut of physicians in
     the United States, the federal government will pay training
     hospitals hundreds of millions of dollars not to train doctors, The
     Washington Post reported Sunday.
     The initiative, part of the new federal budget agreement, also for
     the first time essentially forbids hospitals from increasing the
     size of their residency programs, the paper reported.
     Medicare underwrites residency training programs heavily. Taxpayers
     spend $7 billion a year on the training, with each resident
     translating into an average subsidy of $100,000 a year.IN CONTEXT
     Medicare spends up to $7 billion a year on physician training
     programs. But with one physician for every 380 people in the United
     States, critics say the government is paying for more doctors than
     it needs.
     Under the new plan, Medicare will instead pay hospitals to shrink
     their residency programs. Hospitals that voluntarily reduce
     residency training programs by 20 to 25 percent over five years will
     get the full amount of the lost subsidies for the first two years,
     with payments tapering off over the next three years, the newspaper
     After five years, the payments will cease, leaving the program with
     fewer residents to underwrite. Administration health officials and
     leading Republicans say the program will save Medicare money in the
     long run, the Post reported.
     The payments are the government's first effort to constrict the
     pipeline of people entering the medical profession, and one of the
     few times the federal government has used subsidies as leverage to
     shrink a particular work force.
  New York tried program first
     The program mirrors an experimental program in New York endorsed by
     the Clinton administration earlier this year.
     Under the agreement between the Greater New York Hospital
     Association and the federal Health Care Financing Administration,
     which runs Medicare, New York is to receive $400 million over
     several years to train fewer doctors, especially in those in certain
     Of the state's 75 teaching hospitals, the Post reported, 42 signed
     up for the program -- nearly four times as many as expected.
     But the agreement drew fire from teaching hospitals in other areas
     of the country who were cutting their residency rolls voluntarily
     and absorbing the cost of the lost subsidies without federal
  Some say agreement may have been unnecessary
     Some government officials quoted by the Post said the glut of
     doctors, particularly specialists, in the United States was a
     growing problem, and argued that the budget agreement was a valuable
     cost-cutting tool. "It remains a voluntary matter of choice for
     these teaching hospitals. It isn't a mandate," said Ari Fleischer, a
     spokesman for committee chairman Rep. Bill Archer, R-Texas.
     Others wondered whether it was necessary. The number of doctors
     training to become specialists in some fields has declined
     dramatically despite the subsidy program, the Post article said, due
     to well-publicized warnings that jobs for specialists were only
     available in less populated areas.
     The United States boasts over 700,000 physicians, more per capita
     than any other country.
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