[Congressional Record Volume 144, Number 141 (Friday, October 9, 1998)]
[Extensions of Remarks]
[Page E2005]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      INTRODUCTION OF THE ALL-PAYER GRADUATE MEDICAL EDUCATION ACT

                                 ______
                                 

                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                       Thursday, October 8, 1998

  Mr. CARDIN. Mr. Speaker, I rise today to introduce the All-Payer 
Graduate Medical Education Act, legislation that I have authored to 
improve the funding of America's teaching hospitals and to ease the 
burden on the Medicare Trust Fund. In introducing this legislation, I 
do not seek to preempt the important work of the National Bipartisan 
Commission on the Future of Medicare, but rather, to present a concrete 
proposal for consideration by Congress.
  We have recently learned that medical care costs will double in the 
next 10 years. Health care budgets, including Medicare, will be caught 
in the vise of increasing costs and limited resources. We must try to 
restrain the growth of Medicare spending, while protecting our teaching 
hospitals that rely on Medicare and Medicaid as major sources of 
funding for graduate medical education.
  America's 125 academic medical centers and their affiliated hospitals 
are vital to the Nation's health. These centers train each new 
generation of physicians, nurses and allied health professionals, 
conduct the research and clinical trials that lead to advances in 
medicine, including new treatments and cures for disease, and care for 
the most medically complex patients. To place their contributions in 
perspective, academic medical centers constitute only 2 percent of our 
Nation's non-Federal hospital beds, yet they conduct 42% of all of the 
health research and development in the United States, provide 33% of 
all trauma units and 31% of all AIDS units. Academic medical centers 
also treat a disproportionate share of the Nation's indigent patients.
  To pay for training the Nation's health professionals, our academic 
medical centers must rely on the Medicare program. But Medicare's 
contribution does not fully cover the costs of residents' salaries, and 
more importantly, this funding system fails to recognize that graduate 
medical education benefits all segments of society, not just Medicare 
beneficiaries. At a time when Congress is constantly reviewing and 
revising the Medicare program to ensure that the Trust Fund can remain 
solvent for future generations, GME costs are threatening to break the 
bank.
  The All-Payer Graduate Medical Education Act will distribute the 
expense of graduate medical education more fairly by establishing a 
Trust funded by a 1% fee on the health care premiums. Teaching 
hospitals will receive approximately two-thirds of the revenue from the 
Trust, while the remaining third, approximately $1 billion yearly, will 
be used to reduce Medicare's contribution. The current formula for 
direct graduate medical education payments is based on cost reports 
generated more than 15 years ago, and it unfairly rewards some 
hospitals and penalizes others. This bill replaces the current formula 
with a fair, national system for direct graduate medical education 
payments based on actual resident wages.

  Critics of indirect graduate medical education payments have 
complained that hospitals are not required to account for their use of 
these funds. The All-Payer Graduate Medical Education Act requires 
hospitals to report annually on their contributions to improve patient 
care, education, clinical research, and community services. The formula 
for indirect graduate medical education payments will be changed to 
more accurately reflect MedPAC's estimates of true indirect costs.
  My bill also addresses the supply of physicians in this country. 
Nearly every commission studying the physician workforce has 
recommended reducing the number of first-year residencies to 110% of 
American medical school graduates. This bill directs the Secretary of 
HHS, working with the medical community, to develop and implement a 
plan to accomplish this goal within five years. An adequate supply of 
medical providers is vital to maintaining America's health and 
containing our health care costs.
  Medicare disproportionate share payments are particularly important 
to our safety-net hospitals. Many of these hospitals, which treat the 
indigent, are in dire financial straits. This bill reallocates 
disproportionate share payments, at no cost to the federal budget, to 
hospitals that carry the greatest burden of poor patients. Hospitals 
that treat Medicaid-eligible and indigent patients, will be able to 
count these patients when they apply for disproportionate share 
payments. In addition, these payments will be distributed uniformly 
nationwide, without regard to hospital size or location. Rural public 
hospitals, in particular, will benefit from this provision.
  Finally, because graduate medical education encompasses the training 
of other health professionals, this bill provides for $300 million 
yearly of the Medicare savings to support graduate training programs 
for nurses and other allied health professionals. These funds are in 
addition to the current support Medicare provides for the nation's 
diploma nursing schools.
  The All-Payer Graduate Medical Education Act creates a fair system 
for the support of graduate medical education--fair in the distribution 
of costs to all payers of medical care, fair in the allocation of 
payments to hospitals. Everyone benefits from advances in medical 
research and well-trained health professionals. Life expectancy at 
birth has increased from 68 years in 1950 to 76 years today. Medical 
advances have dramatically improved the quality of life for millions of 
Americans. Because of our academic medical centers, we are in the midst 
of new era of biotechnology that will extend the advances of medicine 
beyond imagination, advances that will prevent disease and disability, 
extend life, and ultimately lower health care costs.
  Although few days remain in the 105th Congress, the valuable services 
performed by America's academic medical centers are never-ending. I am 
introducing this bill today for consideration by Congress, the 
Bipartisan Commission on the Future of Medicare, and the numerous 
provider and patient communities who will be affected by its 
provisions. When the 106th Congress convenes early next year, I will 
reintroduce the bill.
  I urge my colleagues to join me in protecting America's academic 
medical centers and the future of our physician workforce, the 
wellsprings of these advances, by cosponsoring the All-Payer Graduate 
Medical Education Act.

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