NCPA - National Center for Policy Analysis

UT Medical School Presidents Warn of Fewer New Doctors Under U.S. Planned Cuts

August 12, 2010

The federal health overhaul could dry up funds that the state's academic medical centers use to produce doctors in Texas, leaders of the University of Texas' six health science centers warned Wednesday.

The medical school presidents said they're not necessarily opposed to the sweeping legislation signed by President Barack Obama last spring, but they worry that their centers may absorb deep financial hits if they don't adapt to a changed marketplace and cut costs.

"We've got incredibly robust institutions, but they're inherently fragile," Daniel Podolsky, president of University of Texas Southwestern Medical Center, told reporters after the presidents briefed UT regents about the new federal law.

According to Kenneth Shine, the UT system's executive vice chancellor for health affairs:

  • The Legislature currently provides state funds to cover only $200,000 of the average $800,000 cost of educating a physician in Texas.
  • Much of the rest comes from "practice plans," in which medical professors are paid from hospital patients' insurance payments, and from additional federal funds for treating a lot of low-income patients.
  • Under the federal legislation, "Disproportionate Share Hospital" payments under Medicaid and Medicare will be cut drastically, starting in 2014.

Shine says revenue to the schools' practice plans also may be at risk.  That's because to varying degrees, the six schools rely heavily on Medicare and Medicaid patients.

He expects concern over federal deficits and rising health care costs to bring cuts in providers' fees under both of the big government health insurance programs.

"Regardless of what people tell you about savings (from the law), there is going to be enormous pressure on reimbursement and it'll come in a variety of forms," he predicts.

The vice chancellor says the six schools have tried to save money by purchasing supplies and equipment as a group.  Each campus also is experimenting with electronic medical records and "medical home" programs in which the chronically ill are given more supervision after being discharged, Shine said.

Source: Robert T. Garrett, "UT medical school presidents warn of fewer new doctors under U.S. planned cuts," Dallas Morning News, August 12, 2010.

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