THE BLOG
12/20/2012 11:13 pm ET Updated Feb 19, 2013

Cutting Medicine off the Fiscal Cliff

There is no question our nation's fiscal house must be brought to order. Healthcare spending, as well as reductions to domestic and defense programs, must be considered along with revenue increases.

There are no painless solutions. Every dollar cut in healthcare means something else goes away.

In discussions of the "fiscal cliff," President Obama proposes $400 billion in cuts to entitlements -- including $350 billion from Medicare and Medicaid -- but has not offered details. Republicans have offered $600 billion in cuts, but have not outlined specifics. The key is managing these cuts -- whether $300 or $600 billion -- in a manner minimizing impact to patients.

We agree entitlements need to be under control, including healthcare. The key is to cut wisely while not disproportionately reducing the very activities distinguishing American medicine.
Physician training is a $9.5 billion item in the $486 billion Medicare budget. Some budget proposals would cut at least some of this amount. According to the Association of American Medical Colleges, Medicare pays only about a third of the training costs for more than 100,000 residents trained each year at teaching hospitals. Our nation's teaching hospitals shoulder the remainder of this cost.

Students who graduate from medical school are only partially trained. Residencies, which can take three to 10 years depending on the specialty, provide doctors with the experience needed to practice medicine. This final stage of training is essential for all areas of medical practice, from primary care to advanced specialties.

The training budget in Medicare pays both direct costs, like resident salaries and indirect costs, which provide the extraordinary resources necessary to treat the very sickest patients. Indirect expenses also include technology essential to train residents, as well as standby capacity for disasters, including our burn and trauma units.

MedPAC, the organization advising Congress on Medicare, has confirmed teaching hospitals lose money on every Medicare patient. We estimate that for every 10 percent cut from Medicare's training budget, thousands of residency positions may be lost. Further cuts to Graduate Medical Education (GME) funding -- direct or indirect -- will result in fewer doctors. As our training budgets are cut, we have little choice but to consider reducing the number of residents we train.

This is at a time when our nation faces a shortage of 90,000 physicians by 2020. In 2014, as many as 30 million newly insured could seek care they have delayed because they lacked insurance.

A cut to doctor training funding will add to the physician shortage, creating delays to receive care. An appointment that can now be scheduled in a few days could soon take weeks or months. According to government statistics, this is already "reality" for more than 30 million people who live in areas designated as doctor shortage areas where extensive waits are the norm.

The difficulty for AMCs in managing cuts to residency training funds is exacerbated by cuts already scheduled through previous budget negotiations. Hospitals gave up $155 billion as part of the Affordable Care Act, the largest amount by any sector in healthcare.

AMCs make up only six percent of all hospitals, but provide 22 percent of all Medicare services, 25 percent of all Medicaid services and 41 percent of all hospital-based charity care. In most of our communities, AMCs are the major provider of outpatient services. Our training programs prepare both primary care doctors and specialists, arming our system with clinicians who can identify and treat patients at the onset of disease, and then manage them across the continuum as advanced diseases progress. We also provide the majority of the nation's transplant programs, trauma services, burn programs and other highly specialized medical programs.

We believe cuts can be made to healthcare that do not target training the next generation of doctors -- threatening access to care for all Americans, including the elderly and most needy. One approach considers cuts more broadly shared by all sectors of the healthcare industry, thereby having a smaller impact on any individual component of our healthcare system.
We understand the temptation to cut specific programs, like doctor training, that appear to impact a limited number of people. But physician training serves every single American. What may look good on the balance sheet could appear very different on the examination table.

Dr. Steven J. Corwin is CEO of NewYork-Presbyterian Hospital. Dr. Jeff Balser is Dean of the School of Medicine at Vanderbilt University. Dr. Steven Gabbe is CEO of The Ohio State University Medical Center.