[Congressional Record (Bound Edition), Volume 147 (2001), Part 8]
[Extensions of Remarks]
[Pages 10897-10898]
[From the U.S. Government Publishing Office, www.gpo.gov]



  INTRODUCTION OF THE ALL-PAYER GRADUATE MEDICAL EDUCATION ACT OF 2001

                                 ______
                                 

                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                        Thursday, June 14, 2001

  Mr. CARDIN. Mr. Speaker, I rise today to introduce legislation that 
is vital to the future of our nation's health care system. America's 
academic medical centers and their affiliated hospitals are essential 
to the nation's health. These centers do much more than train each new 
generation of health professionals. Every American benefits from 
advances in medical research and well-trained providers. Medical 
advances have dramatically improved the quality of life for millions of 
Americans, and our academic medical centers are at the heart of the new 
era of biotechnology, which holds the promise of effective treatments 
for so many diseases.
  Although academic medical centers constitute only two percent of our 
nation's nonfederal community hospital beds, they conduct 42% of all 
health research and development in the United States, they contain 33% 
of all trauma units and 31% of all AIDS units, and they treat a 
disproportionate share of the country's indigent patients. However, 
funding for these critical tasks is at risk in the new competitive 
health care marketplace. Commercial insurers are displaying increasing 
reluctance to pay academic medical centers adequately to support their 
educational and research missions, and managed care companies steer 
patients away from these centers as well. Generally, managed care 
companies cut costs by seeking the lowest cost hospitals and 
physicians. An academic medical center cannot compete if forced to 
cover part of its teaching costs through the rates that it charges for 
medical services. Without a separate funding source for academic costs, 
these centers run the risk of being non-competitive for managed care 
contracts through no fault of their own.
  Two years ago, The National Bipartisan Commission on the Future of 
Medicare studied graduate medical education funding and proposed 
eliminating Medicare's funding role and moving GME into the general 
appropriations process. It was an approach that would have seriously 
undermined not only academic medical centers, but also the future of 
the medical profession. Fortunately, this recommendation was not 
enacted.
  There is a better way, a much fairer way, to provide for graduate 
medical education, while ensuring the health of the Medicare Trust 
Fund. To ensure stability of funding for GME in the increasingly 
turbulent health economic climate, continued predictable support from 
Medicare is essential. But even Medicare's contribution does not fully 
cover the costs of residents' salaries, and more importantly, our 
current funding system fails to recognize that a well-trained physician 
workforce benefits all segments of society, not just Medicare 
beneficiaries.
  Today, I am introducing the All-Payer Graduate Medical Education Act 
of 2001 to create a fair and rational system for the support of 
graduate medical education--fair in the distribution of costs to all 
payers of medical care, and fair in the allocation of payments to 
hospitals. This bill establishes a Trust funded by a 1% fee on all 
private health insurance premiums. Teaching hospitals will see their 
direct and indirect GME payments increase by $2.2 billion each year. In 
addition, because the current formula for direct GME is based on cost 
reports generated nearly twenty years ago, it unfairly rewards some 
hospitals and penalizes others. This bill replaces that outdated 
formula with an equitable, national system for direct GME payments 
based on actual resident wages.
  Many critics of federal GME support fail to recognize its vast 
societal benefits. They have attacked indirect GME payments, 
complaining that hospitals are not required to account for their use of 
these funds. The All-Payer Graduate Medical Education Act provides a 
structured mechanism for hospitals to inform Congress and the public 
about their contributions to improved patient care, education, clinical 
research, and community services.
  My bill also addresses the supply of physicians in the United States. 
Nearly every commission studying the physician workforce has 
recommended reducing the number of first-year residencies to 110% of 
American medical school graduates, down from the current level of 138%. 
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.
  This legislation will also ensure that hospitals are compensated 
fairly for the indigent patients they treat. Medicare disproportionate 
share (DSH) payments are particularly important to our safety-net 
hospitals. Many of these are in dire financial straits. This bill 
reallocates DSH 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 in applying for disproportionate share payments. 
This provision builds

[[Page 10898]]

on changes made in last year's Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) to provide DSH payments 
equitably, regardless of the facility's location.
  Finally, because graduate medical education encompasses the training 
of other health professionals, my bill directs $300 million of the 
Medicare savings toward graduate training programs for nurses and other 
allied health professionals each year. These funds are in addition to 
the current support Medicare provides for the nation's diploma nursing 
schools.
  Numerous provider and patient groups have registered their support 
for the all-payer concept, including the Association of American 
Medical Colleges, the National Association of Children's Hospitals, the 
American Medical Student Association, the American Osteopathic 
Association, the American Association of Colleges of Osteopathic 
Medicine, the American Speech Language Hearing Association, the 
American Association of Colleges of Nursing, and the American Hospital 
Association.
  I urge my colleagues to join me in protecting America's academic 
medical centers and the future of our physician workforce by supporting 
this legislation. Together, we can establish an equitable funding 
system for GME that ensures the continuation of the highest caliber 
medical workforce and patient care.

                          ____________________