[Congressional Record (Bound Edition), Volume 145 (1999), Part 4]
[Extensions of Remarks]
[Pages 5381-5382]
[From the U.S. 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

                        Tuesday, March 23, 1999

  Mr. CARDIN. Mr. Speaker, I rise today to introduce the All-Payer 
Graduate Medical Education Act, legislation that improves the funding 
of America's teaching hospitals and eases the burden on the Medicare 
Trust Fund.
  We have recently learned that medical care costs will double in the 
next ten 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 (GME).
  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 two percent of 
the 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 revising the Medicare program 
to ensure that the Hospital Insurance Trust Fund can remain solvent for 
future generations, GME costs are threatening to break the bank.
  The All-Payer Graduate Medical Education Act distributes the expense 
of graduate medical education more fairly by establishing a Trust 
funded by a 1% fee on all private health care premiums. Teaching 
hospitals receive approximately $3 billion annually in additional GME 
payments from the Trust, while Medicare's annual contribution to GME 
decreases by $1 billion. The current formula for direct graduate 
medical education payments is based upon 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 upon actual 
resident wages. Children's hospitals, which have unfairly received only 
very limited support for their pediatric training programs, will 
receive funding for their GME programs.
  Critics of indirect GME payments have sought greater accountability 
for the billions of dollars academic medical centers receive each year. 
The All-Payer Graduate Medical Education Act requires hospitals to 
report annually on their contributions to improved patient care, 
education, clinical research, and community services. The formula for 
indirect GME 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 that has studied the physician workforce has 
recommended reducing the number of first-year residency positions to 
110% of the number of American medical school graduating seniors. 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. In doing so, we ensure that rural and urban hospitals that need 
residents to deliver care to underserved populations receive an 
exception from the cap.
  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 
annually 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 that 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 Medicare, fair

[[Page 5382]]

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. And it is largely because of our 
academic medical centers that we are in the midst of a 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.
  The Association of American Medical Colleges, the National 
Association of Public Hospitals, the National Association of Children's 
Hospitals, the American Medical Student Association, the American 
Physical Therapy Association, the American Occupational Therapy 
Association, the American Speech-Language, Hearing Association, and the 
American Association of Colleges of Nursing have all expressed support 
for the bill.
  I urge my colleagues to join me in protecting America's academic 
medical centers and the future of our physician workforce by 
cosponsoring the All-Payer Graduate Medical Education Act.

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