- Email: [email protected]
Crisis at America's teaching hospitals
SPECIAL CONTRIBUTION
Crisis at America’s Teaching Hospitals From the Department of Emergency Medicine, Hospital of University of Pennsylvania, Philadelphia, PA.
William G. Baxt, MD
Received for publication May 23, 2000. Accepted for publication June 13, 2000. Address for correspondence: William G. Baxt, MD, Department of Emergency Medicine, Hospital of University of Pennsylvania, 3400 Spruce Street—Ground Silverstein, Philadelphia, PA 19104; 215-662-6976, fax 215-662-3953; E-mail [email protected]. Copyright © 2000 by the American College of Emergency Physicians. 0196-0644/2000/$12.00 + 0 47/1/109342 doi:10.1067/mem.2000.109342
AUGUST 2000
36:2
ANNALS OF EMERGENCY MEDICINE
[Baxt WG. Crisis at America’s teaching hospitals. Ann Emerg Med. August 2000;36:145-148.] For more than 100 years, American medicine has been at the forefront in the delivery of clinical care, education, and research. The citizens of the United States have been afforded the most advanced medical care in the world. Through breakthroughs in clinical care and research, and by training future physicians and scientists, our nation’s teaching hospitals have been at the heart of the remarkable biomedical advances that have occurred during the past century. Changes in the economics of medicine, however, are seriously threatening the survival of these institutions and the very integrity of our medical system. Unless we take immediate and direct action, the impact of these changes will jeopardize the quality of education for future physicians and biomedical scientists and impede advances in clinical care and scientific research. Health care in our country has become very expensive. Although the gross domestic product (GDP) may not be the best metric, 16% of the US GDP is allocated to health care, whereas most other developed countries allocate approximately 8% of their GDP.1 By 2030, at the current level of expenditure, the Medicare, Medicaid, Social Security, and federal employee retirement programs alone would consume every penny of federal tax collected in the entire country.2 Ironically, those who have initiated the current changes seem unaware of the incredible advances this “costly system” has engendered, leading not only to the prolongation of life, but to the prolongation of quality life. Morbidity and mortality from heart disease has been reduced, infections that once killed are now treatable, many cancers that were once uniformly fatal are now cured or dramatically slowed, and operative procedures from transplantation to complex neurosurgical and cardiac are common place. Even AIDS, once a rapidly and uniformly fatal illness, has in 15 years been converted to a chronic disease. Those who proclaim that health care has become exorbitantly expensive should
1 4 5
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
take pause to consider that the advances in health care that have taken place over this century have, in fact, saved society billions of dollars.3 There is little question that our system of health care is in dire need of fiscal reform in order to survive. However, what began as an appropriate effort to solve a complex problem has been turned into nothing more than an unfocused and disproportionate reduction in health care funding. Medical centers have experienced a drastic absolute reduction in both private and public sector reimbursements for care delivered to patients. In the private sector, managed care has led to a decrease in the number of patients who are admitted to hospitals, in the number of inpatient days, and has reduced the overall level of reimbursement for all care given. Although some of this has clearly been justified, some of it has not. Managed care has also increased the amount of health care dollars spent on administration. Many managed care systems have systematically developed complex procedures that have led to the denial of claims or simply dramatically delayed the payment of claims. Both physicians and hospitals have been forced to expend extraordinary effort to obtain reimbursement from managed care corporations. Moreover, as soon as the hospitals and physicians deal with one claimed deficiency, another is used to deny payment. Health care has become the only legal industry where providers can be routinely denied payment after delivering a service. In the public sector, as a result of the Welfare Act of 1996 and other state-driven legislation, states have reduced eligibility for welfare. The reform act actually directed states to guarantee that they would not reduce Medicaid eligibility for those who were denied welfare. Unfortunately, this was never well publicized, and many of those removed from the welfare roles never sought Medicaid support. New York State recently announced that it had $500 million of unspent Medicaid funds. The net result has been the increase in the indigent uninsured. 4 It has been estimated that 44 million Americans are now uninsured and 30 million are underinsured.5 This is an unacceptable national tragedy that is compounded by shifting the burden of financial responsibility to teaching hospitals, where a disproportionate number of the uninsured seek medical care. At the federal level, the government has drastically reduced medical reimbursement by enacting the Balanced Budget Act (BBA) of 1997 designed to reduce federal outlays to the Medicare program by $115 billion by 2002. Although the theory behind the BBA of shifting reimbursement from a cost-based to a prospective system is
1 4 6
sound, the BBA has seriously overshot its mark. The Congressional Budget Office (CBO) initially estimated that the BBA would reduce Medicare spending by $103 billion; however, as of January 2000, the CBO now admits that it is projected to save $226 billion. Reductions are 4 times what Congress had requested during the debate over the Balanced Budget Relief Act (BBRA). A recent study revealed that the BBA has caused the overall Medicare margin to decrease from 2.5% in 1998 to –0.5% in 2000. This is at a time when hospital Medicare expenses and beneficiary expansion have increased 10 times that of Medicare reimbursement.6 Concurrently, hospitals’ total margins, which measure payments on all hospital services, have decreased from 5.5% in 1998 to 2.6% in 2000. Furthermore, according to the Lewin Group, total hospital Medicare margins are projected to be –2.5% by 2002, and two thirds of the nation’s hospitals will have negative Medicare margins by 2000. In addition, the sweeping changes in the requirements for documentation implemented by the Health Care Financing Administration have had the net effect of reducing real reimbursement by increasing the amount of time devoted to documentation without compensation for the added time. The decrease in hospital margins coupled with the dramatic increase in operating expenses is not manageable. The result of these changes has been devastating to academic health systems and teaching hospitals across the country. The BBA will cost many large academic centers more than $100 million each. The Wayne State Detroit Medical Center Health System, the Massachusetts General/Brigham and Women’s System, and the George Washington Medical System have lost hundreds of millions of dollars. For the first time in history, an academic health system went bankrupt when the Allegheny University of the Health Sciences and its hospital system declared bankruptcy in 1998. Although there was purported mismanagement of the system, it more than likely would have survived if it had not been for the erosion of their clinical reimbursement. The University of Pennsylvania Health System lost $198 million in fiscal 1999 and more than $300 million combined in fiscal 1998 and 1999. Community teaching and nonteaching hospitals are suffering a similar fate with many closing across the country. In both Pennsylvania and New Jersey, recent reports have revealed that more than half of all the hospitals in these states are currently operating with financial losses. According to the Federation of American Health Systems, privately owned hospital stocks have decreased an average of 33% since the beginning of 1999 while the overall market has increased by 20%.7 Nonprofit hospitals have
ANNALS OF EMERGENCY MEDICINE
36:2 AUGUST 2000
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
seen credit downgrades exceed upgrades by a ratio of 5:1 over the past year according to Standard and Poor’s, and Moody’s Investors Services have recently forecasted a “negative outlook” for the nonprofit community for the next 2 years. A viable solution to the complex issue of health care reform is not simply indiscriminate reduction in health care funding. Teaching hospitals are inherently expensive to operate for a number of reasons. The major driving force behind increasing health care costs is technology. Teaching hospitals have traditionally been both the developers and the applicants of new medical technology. At the same time, teaching hospitals have traditionally been committed to caring for the poor and uninsured. They are thus using the most expensive technology for a patient base that cannot pay for it. In addition, teaching hospitals must support a large multidisciplined house staff for whom they now cannot be fully reimbursed. The BBA has reduced reimbursement for house staff through reduction in the indirect medical expenses (IME), for disproportionate share and for inpatient care. Further, federally mediated reductions are manifested in the changes in reimbursement for house staff by payment only for the minimal years of training required for board certification in a given specialty. This has reduced the funding for all 4year training programs such as emergency medicine. Additionally, to fully meet their teaching missions, academic medical centers must offer all services, many of which are costly and sometimes inefficient. Finally, because the staff of teaching hospitals is composed of faculty members of medical schools who must advance, they cannot devote all of their time to patient care but must instead spend a significant amount of time on research, teaching, and other scholarly pursuits for which there is insufficient or no reimbursement. Many physicians are leaving academic careers because the balance between clinical care and teaching and research responsibilities has moved too far toward clinical care to meet departmental budget requirements. Financial losses are forcing health systems and teaching hospitals to severely reduce expenses. Obvious solutions include effective management and efficient utilization of resources and personnel. However, the losses are now so great that these types of cost-saving measures will not be sufficient to offset the drastic reductions in clinical revenues. The net result of these changes will be devastating to academic health systems. Because income sources to medical schools gleaned through tuition and grants have never been sufficient to fund expensive clinical and research programs, funding for these has always been
AUGUST 2000
36:2
ANNALS OF EMERGENCY MEDICINE
supplemented from clinical revenues, termed “the commingling of funds.” Because of the reductions in clinical revenues, institutions will be forced to curtail clinical care, reduce teaching programs, as well as clinical and basic science research. As a result, contributions to biomedical science will be greatly diminished. A well-known consulting firm that has been retained by many of the nation’s health systems to solve their financial problems categorically states that patient income cannot be used to support research. Entire clinical and research programs will have to be discontinued, programs that will never be able to be rebuilt. The physicians of the future will be exposed to educational programs with reduced resources and reduced cutting-edge clinical and research programs. Consequently, these physicians will be more poorly trained than the physicians of past decades. This will happen at a time when our population is undergoing the greatest aging in its history, leading to greater health care needs. It is ironic that at a time of one of the most remarkable economic booms in the United States, hospitals are in the throes of an enormous recession. If relief does not come soon, the poorly conceived and disproportionate reforms will be irrevocable. State and federal government should take heed of the dire positions into which all medical centers have been forced and enact legislation to counter the economic disaster that has befallen them. With the remarkable expansion of the economy, which has led to higher wages and lower unemployment, governments are appreciating marked increase in tax dollar income. A significant portion of this must be directed to guaranteeing the integrity of our medical teaching institutions. There are a number of steps for which health care professionals should immediately begin to lobby: 1. There should be an immediate resurgence in the drive to establish a national universal health care system. There is no excuse for any US citizen not to have the right to health care. This will not only help the poor but help the countless number of hospitals across the United States that have been providing free care to those who have been denied insured care. 2. An all-payer fund should be established to help underwrite general medical education. The federal government should establish a system to finance the education of our future physicians. The 8% decrease nationally in medical school applications that began in 19978 should be reversed before the damaging effects of this are felt. 3. The federal government should immediately recalibrate the BBA and return reimbursement rates to a level that will guarantee the original goal projected with the
1 4 7
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
BBRA and not the $226 billion now predicted. A grassroots BBA relief campaign has already started. The entire Pennsylvania congressional delegation has signed on as co-sponsor of the legislation to restore excessive Medicare inpatient payment reductions (HR 3580). The American Hospital Association, Association of American Medical Colleges, Catholic Health Association, and others have launched a petition drive to encourage patients, trustees, volunteers, and members of the local community to voice support for BBA relief. 4. The 0.5% freeze to IME enacted by the BBRA should be made permanent. 5. Federally funded safety net insurance should be established to underwrite the care of a sudden increase in uninsured patients. As outlined by the Institute of Medicine, a cost-based reimbursement system that is directly tied to the number of uninsured individuals in the country should be enacted. The system should be cost-based because the care of the poor whose needs are greater is episodic, and the scope of their needs are difficult to predict because of the inability to define their population and prospectively develop programs to enhance their care.9 6. States should enact legislation to distribute funds to those hospitals that care for a disproportionate number of indigent patients. Some states, such as Minnesota, have already begun to do this. 7. All state legislatures should ensure that a significant percentage of the millions of dollars in the “Tobacco Settlement” monies coming to them be used to offset the free or undercompensated care given to the indigent. 8. Governments should immediately enact legislation to deal with the problems with managed care and its manipulation of reimbursement. Some recent rulings are good examples of a start. In Texas, the state sued managed care and was able to stop the rewarding of physicians for depriving patients of care. In New Jersey, legislation was enacted to protect physicians and hospitals from managed care organizations that declare bankruptcy to avoid paying outstanding charges. 9. Another clearly positive turn has been the repeated 2-year dramatic increase in the budget of the National Institutes of Health, which will hopefully lead to an expansion of biomedical research funding. This support must continue. The United States has developed the greatest health care system in the world. The vast majority of the greatest discoveries in medicine have come from this country. The greatest number of Nobel prizes awarded in the biomedical sciences has been awarded to scientists from our sys-
1 4 8
tem. The collective quality of our hospitals is unequaled anywhere in the world. If the erosion of our academic health centers and teaching hospitals continues, we will see an ongoing unchallenged decline in the excellence of our health system. One wonders if the US public is truly ready to give up the quality of care that they have long benefited from and long taken for granted. I thank Joseph F. Waeckerle, MD, Robert K. Knopp, MD, and Brent R. Asplin, MD, MPH, for their invaluable help and support in preparing this article.
REFERENCES 1. Carey RM. 2020 Vision: Institute of Medicine 25th Anniversary Symposium. Washington, DC: National Academy Press; 1996:74-80. 2. Porter JE. 2020 Vision: Institute of Medicine 25th Anniversary Symposium. Washington, DC: National Academy Press; 1996:4-11. 3. Kirschner MW, Marincola E, Teisberg EO. The role of biomedical research in health care reform. Science. 1994;266:49-51. 4. Kuttner R. The American health care system. Health insurance coverage [see comments]. N Engl J Med. 1999;340:163-168. 5. Ginzberg E. The uncertain future of managed care [see comments]. N Engl J Med. 1999;340:144-146. 6. Hospitals in Crisis. Post BBA and Post BBRA. Ernst & Young and HCIA-Sachs 5/2000 prepared on behalf of the Federation of American Health Systems. Available at: http://www.fahs.com. 7. Talking Points. Federation of American Health System, Bulletin May 8, 2000. Available at: http://www.fahs.com. 8. Masters D. Contemporary issues in medical education. Report from the American Association of Medical Colleges; November 1997, vol 2. 9. America’s Health Care Safety Net: Intact but Endangered. Report from the Committee on the Changing Market, Managed Care, and the Future Viability of Safety Net Providers. Washington DC: Institute of Medicine, National Academy Press; 2000. Available at: http://www.nap.edu.
ANNALS OF EMERGENCY MEDICINE
36:2 AUGUST 2000
Crisis at America’s Teaching Hospitals From the Department of Emergency Medicine, Hospital of University of Pennsylvania, Philadelphia, PA.
William G. Baxt, MD
Received for publication May 23, 2000. Accepted for publication June 13, 2000. Address for correspondence: William G. Baxt, MD, Department of Emergency Medicine, Hospital of University of Pennsylvania, 3400 Spruce Street—Ground Silverstein, Philadelphia, PA 19104; 215-662-6976, fax 215-662-3953; E-mail [email protected]. Copyright © 2000 by the American College of Emergency Physicians. 0196-0644/2000/$12.00 + 0 47/1/109342 doi:10.1067/mem.2000.109342
AUGUST 2000
36:2
ANNALS OF EMERGENCY MEDICINE
[Baxt WG. Crisis at America’s teaching hospitals. Ann Emerg Med. August 2000;36:145-148.] For more than 100 years, American medicine has been at the forefront in the delivery of clinical care, education, and research. The citizens of the United States have been afforded the most advanced medical care in the world. Through breakthroughs in clinical care and research, and by training future physicians and scientists, our nation’s teaching hospitals have been at the heart of the remarkable biomedical advances that have occurred during the past century. Changes in the economics of medicine, however, are seriously threatening the survival of these institutions and the very integrity of our medical system. Unless we take immediate and direct action, the impact of these changes will jeopardize the quality of education for future physicians and biomedical scientists and impede advances in clinical care and scientific research. Health care in our country has become very expensive. Although the gross domestic product (GDP) may not be the best metric, 16% of the US GDP is allocated to health care, whereas most other developed countries allocate approximately 8% of their GDP.1 By 2030, at the current level of expenditure, the Medicare, Medicaid, Social Security, and federal employee retirement programs alone would consume every penny of federal tax collected in the entire country.2 Ironically, those who have initiated the current changes seem unaware of the incredible advances this “costly system” has engendered, leading not only to the prolongation of life, but to the prolongation of quality life. Morbidity and mortality from heart disease has been reduced, infections that once killed are now treatable, many cancers that were once uniformly fatal are now cured or dramatically slowed, and operative procedures from transplantation to complex neurosurgical and cardiac are common place. Even AIDS, once a rapidly and uniformly fatal illness, has in 15 years been converted to a chronic disease. Those who proclaim that health care has become exorbitantly expensive should
1 4 5
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
take pause to consider that the advances in health care that have taken place over this century have, in fact, saved society billions of dollars.3 There is little question that our system of health care is in dire need of fiscal reform in order to survive. However, what began as an appropriate effort to solve a complex problem has been turned into nothing more than an unfocused and disproportionate reduction in health care funding. Medical centers have experienced a drastic absolute reduction in both private and public sector reimbursements for care delivered to patients. In the private sector, managed care has led to a decrease in the number of patients who are admitted to hospitals, in the number of inpatient days, and has reduced the overall level of reimbursement for all care given. Although some of this has clearly been justified, some of it has not. Managed care has also increased the amount of health care dollars spent on administration. Many managed care systems have systematically developed complex procedures that have led to the denial of claims or simply dramatically delayed the payment of claims. Both physicians and hospitals have been forced to expend extraordinary effort to obtain reimbursement from managed care corporations. Moreover, as soon as the hospitals and physicians deal with one claimed deficiency, another is used to deny payment. Health care has become the only legal industry where providers can be routinely denied payment after delivering a service. In the public sector, as a result of the Welfare Act of 1996 and other state-driven legislation, states have reduced eligibility for welfare. The reform act actually directed states to guarantee that they would not reduce Medicaid eligibility for those who were denied welfare. Unfortunately, this was never well publicized, and many of those removed from the welfare roles never sought Medicaid support. New York State recently announced that it had $500 million of unspent Medicaid funds. The net result has been the increase in the indigent uninsured. 4 It has been estimated that 44 million Americans are now uninsured and 30 million are underinsured.5 This is an unacceptable national tragedy that is compounded by shifting the burden of financial responsibility to teaching hospitals, where a disproportionate number of the uninsured seek medical care. At the federal level, the government has drastically reduced medical reimbursement by enacting the Balanced Budget Act (BBA) of 1997 designed to reduce federal outlays to the Medicare program by $115 billion by 2002. Although the theory behind the BBA of shifting reimbursement from a cost-based to a prospective system is
1 4 6
sound, the BBA has seriously overshot its mark. The Congressional Budget Office (CBO) initially estimated that the BBA would reduce Medicare spending by $103 billion; however, as of January 2000, the CBO now admits that it is projected to save $226 billion. Reductions are 4 times what Congress had requested during the debate over the Balanced Budget Relief Act (BBRA). A recent study revealed that the BBA has caused the overall Medicare margin to decrease from 2.5% in 1998 to –0.5% in 2000. This is at a time when hospital Medicare expenses and beneficiary expansion have increased 10 times that of Medicare reimbursement.6 Concurrently, hospitals’ total margins, which measure payments on all hospital services, have decreased from 5.5% in 1998 to 2.6% in 2000. Furthermore, according to the Lewin Group, total hospital Medicare margins are projected to be –2.5% by 2002, and two thirds of the nation’s hospitals will have negative Medicare margins by 2000. In addition, the sweeping changes in the requirements for documentation implemented by the Health Care Financing Administration have had the net effect of reducing real reimbursement by increasing the amount of time devoted to documentation without compensation for the added time. The decrease in hospital margins coupled with the dramatic increase in operating expenses is not manageable. The result of these changes has been devastating to academic health systems and teaching hospitals across the country. The BBA will cost many large academic centers more than $100 million each. The Wayne State Detroit Medical Center Health System, the Massachusetts General/Brigham and Women’s System, and the George Washington Medical System have lost hundreds of millions of dollars. For the first time in history, an academic health system went bankrupt when the Allegheny University of the Health Sciences and its hospital system declared bankruptcy in 1998. Although there was purported mismanagement of the system, it more than likely would have survived if it had not been for the erosion of their clinical reimbursement. The University of Pennsylvania Health System lost $198 million in fiscal 1999 and more than $300 million combined in fiscal 1998 and 1999. Community teaching and nonteaching hospitals are suffering a similar fate with many closing across the country. In both Pennsylvania and New Jersey, recent reports have revealed that more than half of all the hospitals in these states are currently operating with financial losses. According to the Federation of American Health Systems, privately owned hospital stocks have decreased an average of 33% since the beginning of 1999 while the overall market has increased by 20%.7 Nonprofit hospitals have
ANNALS OF EMERGENCY MEDICINE
36:2 AUGUST 2000
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
seen credit downgrades exceed upgrades by a ratio of 5:1 over the past year according to Standard and Poor’s, and Moody’s Investors Services have recently forecasted a “negative outlook” for the nonprofit community for the next 2 years. A viable solution to the complex issue of health care reform is not simply indiscriminate reduction in health care funding. Teaching hospitals are inherently expensive to operate for a number of reasons. The major driving force behind increasing health care costs is technology. Teaching hospitals have traditionally been both the developers and the applicants of new medical technology. At the same time, teaching hospitals have traditionally been committed to caring for the poor and uninsured. They are thus using the most expensive technology for a patient base that cannot pay for it. In addition, teaching hospitals must support a large multidisciplined house staff for whom they now cannot be fully reimbursed. The BBA has reduced reimbursement for house staff through reduction in the indirect medical expenses (IME), for disproportionate share and for inpatient care. Further, federally mediated reductions are manifested in the changes in reimbursement for house staff by payment only for the minimal years of training required for board certification in a given specialty. This has reduced the funding for all 4year training programs such as emergency medicine. Additionally, to fully meet their teaching missions, academic medical centers must offer all services, many of which are costly and sometimes inefficient. Finally, because the staff of teaching hospitals is composed of faculty members of medical schools who must advance, they cannot devote all of their time to patient care but must instead spend a significant amount of time on research, teaching, and other scholarly pursuits for which there is insufficient or no reimbursement. Many physicians are leaving academic careers because the balance between clinical care and teaching and research responsibilities has moved too far toward clinical care to meet departmental budget requirements. Financial losses are forcing health systems and teaching hospitals to severely reduce expenses. Obvious solutions include effective management and efficient utilization of resources and personnel. However, the losses are now so great that these types of cost-saving measures will not be sufficient to offset the drastic reductions in clinical revenues. The net result of these changes will be devastating to academic health systems. Because income sources to medical schools gleaned through tuition and grants have never been sufficient to fund expensive clinical and research programs, funding for these has always been
AUGUST 2000
36:2
ANNALS OF EMERGENCY MEDICINE
supplemented from clinical revenues, termed “the commingling of funds.” Because of the reductions in clinical revenues, institutions will be forced to curtail clinical care, reduce teaching programs, as well as clinical and basic science research. As a result, contributions to biomedical science will be greatly diminished. A well-known consulting firm that has been retained by many of the nation’s health systems to solve their financial problems categorically states that patient income cannot be used to support research. Entire clinical and research programs will have to be discontinued, programs that will never be able to be rebuilt. The physicians of the future will be exposed to educational programs with reduced resources and reduced cutting-edge clinical and research programs. Consequently, these physicians will be more poorly trained than the physicians of past decades. This will happen at a time when our population is undergoing the greatest aging in its history, leading to greater health care needs. It is ironic that at a time of one of the most remarkable economic booms in the United States, hospitals are in the throes of an enormous recession. If relief does not come soon, the poorly conceived and disproportionate reforms will be irrevocable. State and federal government should take heed of the dire positions into which all medical centers have been forced and enact legislation to counter the economic disaster that has befallen them. With the remarkable expansion of the economy, which has led to higher wages and lower unemployment, governments are appreciating marked increase in tax dollar income. A significant portion of this must be directed to guaranteeing the integrity of our medical teaching institutions. There are a number of steps for which health care professionals should immediately begin to lobby: 1. There should be an immediate resurgence in the drive to establish a national universal health care system. There is no excuse for any US citizen not to have the right to health care. This will not only help the poor but help the countless number of hospitals across the United States that have been providing free care to those who have been denied insured care. 2. An all-payer fund should be established to help underwrite general medical education. The federal government should establish a system to finance the education of our future physicians. The 8% decrease nationally in medical school applications that began in 19978 should be reversed before the damaging effects of this are felt. 3. The federal government should immediately recalibrate the BBA and return reimbursement rates to a level that will guarantee the original goal projected with the
1 4 7
CRISIS AT AMERICA’S TEACHING HOSPITALS Baxt
BBRA and not the $226 billion now predicted. A grassroots BBA relief campaign has already started. The entire Pennsylvania congressional delegation has signed on as co-sponsor of the legislation to restore excessive Medicare inpatient payment reductions (HR 3580). The American Hospital Association, Association of American Medical Colleges, Catholic Health Association, and others have launched a petition drive to encourage patients, trustees, volunteers, and members of the local community to voice support for BBA relief. 4. The 0.5% freeze to IME enacted by the BBRA should be made permanent. 5. Federally funded safety net insurance should be established to underwrite the care of a sudden increase in uninsured patients. As outlined by the Institute of Medicine, a cost-based reimbursement system that is directly tied to the number of uninsured individuals in the country should be enacted. The system should be cost-based because the care of the poor whose needs are greater is episodic, and the scope of their needs are difficult to predict because of the inability to define their population and prospectively develop programs to enhance their care.9 6. States should enact legislation to distribute funds to those hospitals that care for a disproportionate number of indigent patients. Some states, such as Minnesota, have already begun to do this. 7. All state legislatures should ensure that a significant percentage of the millions of dollars in the “Tobacco Settlement” monies coming to them be used to offset the free or undercompensated care given to the indigent. 8. Governments should immediately enact legislation to deal with the problems with managed care and its manipulation of reimbursement. Some recent rulings are good examples of a start. In Texas, the state sued managed care and was able to stop the rewarding of physicians for depriving patients of care. In New Jersey, legislation was enacted to protect physicians and hospitals from managed care organizations that declare bankruptcy to avoid paying outstanding charges. 9. Another clearly positive turn has been the repeated 2-year dramatic increase in the budget of the National Institutes of Health, which will hopefully lead to an expansion of biomedical research funding. This support must continue. The United States has developed the greatest health care system in the world. The vast majority of the greatest discoveries in medicine have come from this country. The greatest number of Nobel prizes awarded in the biomedical sciences has been awarded to scientists from our sys-
1 4 8
tem. The collective quality of our hospitals is unequaled anywhere in the world. If the erosion of our academic health centers and teaching hospitals continues, we will see an ongoing unchallenged decline in the excellence of our health system. One wonders if the US public is truly ready to give up the quality of care that they have long benefited from and long taken for granted. I thank Joseph F. Waeckerle, MD, Robert K. Knopp, MD, and Brent R. Asplin, MD, MPH, for their invaluable help and support in preparing this article.
REFERENCES 1. Carey RM. 2020 Vision: Institute of Medicine 25th Anniversary Symposium. Washington, DC: National Academy Press; 1996:74-80. 2. Porter JE. 2020 Vision: Institute of Medicine 25th Anniversary Symposium. Washington, DC: National Academy Press; 1996:4-11. 3. Kirschner MW, Marincola E, Teisberg EO. The role of biomedical research in health care reform. Science. 1994;266:49-51. 4. Kuttner R. The American health care system. Health insurance coverage [see comments]. N Engl J Med. 1999;340:163-168. 5. Ginzberg E. The uncertain future of managed care [see comments]. N Engl J Med. 1999;340:144-146. 6. Hospitals in Crisis. Post BBA and Post BBRA. Ernst & Young and HCIA-Sachs 5/2000 prepared on behalf of the Federation of American Health Systems. Available at: http://www.fahs.com. 7. Talking Points. Federation of American Health System, Bulletin May 8, 2000. Available at: http://www.fahs.com. 8. Masters D. Contemporary issues in medical education. Report from the American Association of Medical Colleges; November 1997, vol 2. 9. America’s Health Care Safety Net: Intact but Endangered. Report from the Committee on the Changing Market, Managed Care, and the Future Viability of Safety Net Providers. Washington DC: Institute of Medicine, National Academy Press; 2000. Available at: http://www.nap.edu.
ANNALS OF EMERGENCY MEDICINE
36:2 AUGUST 2000