|
|
 |
A Word From the President
Weathering Stormy Times
 Spring
has finally sprung in Washington, but I'm afraid the weather is
about the only thing that has a rosy forecast here. Certainly the
economic forecast for academic medicine is anything but rosy. It's
never easy, even in times of economic prosperity and national stability,
for medical schools and teaching hospitals to find all the resources
needed to meet the legitimate demands placed on them. How we're
going to fare now with our nation at war and our economy in the
doldrums is, to say the least, a question of overriding importance.
I hesitate to list all of the well-known factors that are currently
threatening the fiscal health of the academic medicine enterprise,
but I want to be sure that everyone is fully aware of just how much
work we all have to do to ensure the continued vitality of our institutions
and their multiple missions at this moment in our history. Here
are some of the biggest storm clouds that are not only visible on
the fiscal horizon, but are already raining trouble on many of our
constituents:
-
State budgets in crisis. As reported in the February
AAMC Reporter, 49 states and the District of Columbia are facing
their worst financial crises since World War II. The response
has been massive state budget reductions that have, among other
things, already led to the slashing of appropriations for several
state-supported medical schools and hospitals. A less direct
but potentially even more problematic fallout for academic medicine
are major cutbacks in state Medicaid programs. To make matters
worse, Congress is (at press time) considering a budget proposal
that calls for cuts in federal Medicaid support amounting to
more than $90 billion over 10 years. Translation: The rolls
of the uninsured are sure to swell, and the consequent impacts
on teaching hospitals and faculty practice plans are sure to
be grim. A less publicized but no less worrisome impact is the
downward pressure on Medicaid's support for GME, which, though
less than Medicare's, makes a sizable contribution to the overall
mission.
-
Federal budget under extreme pressure. The combination
of our country's current economic slump and the uncertain price
tag of the Iraq war and its aftermath has created a very difficult
environment for convincing federal lawmakers that our financial
needs deserve a high priority. Indeed, we were already facing
an uphill battle even before recent events supervened. Recall
that the 107th Congress failed to reverse Balanced Budget Act
(BBA) scheduled Medicare payment reductions for teaching hospitals;
as a result, Medicare Indirect Medical Education (IME) payments
fell by 15 percent in FY 2003, a loss of almost $800 million
in that one year alone. Besides having to absorb these enormous
cuts, our community was treated to an even more alarming prospect
at the hands of the Medicare Payment Advisory Commission at
its meeting this past March. Up for consideration was a staff
ecommendation that the IME adjustment be further reduced almost
by half (!) from its current level of 5.5 percent to 2.7 per-
cent. Fortunately, the commission voted 9 to 6 not to pass that
recommendation on to Congress, but the marker was put on the
table for all to see.
-
Healthcare costs on the rise. Our community is, of course,
subject to all the forces that are escalating costs in the health
sector. Notable examples include expensive new drugs and technologies;
compliance with the Health Insurance Portability and Accountability
Act of 1996 (HIPAA); and rising wages for nurses and other healthcare
workers who are in short supply. Compounding the failure of
revenues to keep pace with rising patient care costs, our community
must find ways to support all the societal goods that the public
looks to us to provide.
Times are indeed tough. But, as they say, if it were easy, anybody
could do it. Fortunately, we're not just "anybody." Not
only do we have a compelling case to make for sustained public support,
we have a long track record of success when we focus our energies
on achievable goals. Remember what happened in the immediate aftermath
of the passage of the BBA in 1997. Unwilling to accept the act's
predictably dire consequences, our community fought back. The AAMC
formed a Medicare Special Action Committee and enlisted the help
of dozens of constituents in a coordinated advocacy effort aimed
at key members of Congress to alert them to the need for BBA relief.
In addition, the association played a major role in the Coalition
to Protect America's Health Care, which launched a highly effective
media campaign (the first of its kind) to educate the public about
the financial duress many hospitals were facing. As a result of
these and other efforts, Congress enacted two refinement bills in
1999 and 2000, respectively, which restored $11.5 billion of the
slated five-year cuts to our teaching hospitals. Recalling such
victories should give us heart, but also are sobering reminders
of the effort required to prevail. Given the current nasty climate,
we can't just hunker down hoping the sun will shine. The public
and their elected representatives must hear our voices above the
storm's chilling din.
Jordan J. Cohen, M.D.
AAMC President
|
