An agency within the Department of Health and Human Services intends to pay New York hospitals not to train any more new doctors. Officials claim they want to do away with a surplus of doctors throughout the nation and save money.

• After years of federal subsidies to increase the number of doctors, the new Medicare Graduate Medical Education Demonstration Project will pay $400 million to 41 New York hospitals to discourage them from training physicians.

• The program is to run for six years.

• Health care experts across the country were reportedly stunned by the plan.

• Some observers are likening it to federal agricultural programs which pay farmers for not planting crops, and one called it "treating health care like a commodity."

The plan was devised by officials of the Greater New York Hospital Association, a powerful lobbying group, and approved by the Health Care Financing Administration -- the agency that disperses Medicare funds.

• The federal government picks up a considerable portion of the bill for doctor training through Medicare -- which has been paying hospitals up to about $100,000 a year for each resident trained.

• The New York hospitals would reduce the number of doctors they train by 20 percent to 25 percent over the next six years -- resulting in 2,000 fewer residents.

Hospital executives around the nation expressed concern that the government was playing favorites with New York hospitals because of their political connections. The president of the Tampa (Fla.) General Hospital was quoted as saying, "How can we get in on it?"

Source: Elisabeth Rosenthal, "U. S. to Pay New York Hospitals Not to Train Doctors, Easing Glut," New York Times, February 18, 1997.

While President Clinton's massive health care reform plan never formally got out of the Congress, critics charge it still has life. Their latest evidence is a plan that will now pay dozens of teaching hospitals not to teach new doctors.

• The federal government pays about $100,000 from Medicare to hospitals to aid in doctor training.

• Hospitals pay the doctors about $40,000 and pocket the rest.

Washington, critics say, believes we have a glut of doctors. Typically, an over-supply leads to competition, lower prices and better service. But since most Americans don't pay outright for health care, more supply just means more consumption, thus more spending.

Of course, insurers, employers and the federal government do feel the price increases -- and look for ways to cut costs. The private sector has largely switched to managed care and HMOs. Medicare is moving in the same direction, but also wants to use its massive clout over the medical marketplace.

So:

• Medicare will pay 41 teaching hospitals in New York state $400 million over six years to teach fewer doctors.

• The "doctor supply" will therefore drop by a quarter to a fifth.

• Over the next six years, we will have about 2,000 fewer doctors because of the plan.

Critics call this move rationing by another name -- cutting consumption of a good by limiting its supply. And rationing was a major part of the original Clinton health care reform plan.

Source: Editorial, "Paying To Have Fewer Doctors," Investor's Business Daily, February 20, 1997.

A coalition of members of the American Medical Association and the Association of American Medical Colleges will soon urge that steps be taken to cut the number of doctors being trained in the U. S. They contend that doctors are in "oversupply" here, that steps should be taken to limit the number of foreign medical students being trained in the U. S. and that all but a few who graduate should be banned from staying here.

Critics charge that the complainers either fear competition and want a controlled market -- or cut their economics classes in school. They also blame the government for subsidizing doctor training over many decades -- which led to whatever "oversupply" the doctors now deplore.

• The coalition claims that 75 percent of foreign-born doctors trained in the U.S. stay here after graduation.

• They estimate that 20 percent of the nation's 720,300 doctors are foreign-born.

• According to their report, about 22 percent of the 110,000 doctors in U.S. residency programs are foreign-born -- up from 10 percent in 1988.

The group wants to expand a recently-announced federal government pilot program to pay New York hospitals $400 million in the next six years not to train so many doctors.

Critics of the AMA proposal contend that there isn't an oversupply of doctors, simply a maldistribution which won't be solved by cutting the number of foreign MDs. In fact, foreign-born doctors often go where native-born physicians won't: into poor urban and rural areas which otherwise would go without local medical care.

Source: Steven Findlay, "AMA Group: Trim Foreign Med Students," USA Today, February 25, 1997.