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CUTS COULD PUT HOSPITALS ON CRITICAL LIST

SHARE CUTS COULD PUT HOSPITALS ON CRITICAL LIST

The sweeping cuts in Medicare making their way through Congress would force major teaching and public hospitals around the nation to retrench drastically or face closure and to slash doctor-training programs that are the backbone of medical care in many poor neighborhoods, according to health-care experts.

The bitter debates over Medicare have focused on its role as the nation's health-care system for the elderly. But the $178 billion program is also the largest subsidizer of medical training in the country and helps hospitals serving poor and uninsured patients.Nowhere will the effects be felt more than in New York City, where 15 percent of the nation's medical students train and where more medical care is provided to the poor than anywhere else.

If the Medicare overhaul becomes law, Bronx-Lebanon Hospital in the South Bronx, for example, will lose financing for most of the salaries for about 63 percent of its medical residents, who provide the bulk of its patient care. New York City's 11 public hospitals will lose nearly $800 million over seven years if the bill becomes law.

In North Carolina, officials of Duke University, which has one of the nation's premier teaching hospitals, say they will lose 30 percent of the money they depend on for training doctors.

"What people need to understand is that these cuts reach beyond the Medicare population," said Kenneth E. Raske, president of the Greater New York Hospital Association, a trade organization. "There is no such thing in a hospital as a Medicare nurse or a Medicaid nurse or a Blue Cross/Blue Shield nurse. Hospitals combine different streams of revenue to pay for everything they do, and so cuts in Medicare payments affect everyone who comes through their doors."

Republicans say the entire Medicare program must sustain cuts in order to survive. And many experts say there is already less of a need for big hospitals as insurance companies and health maintenance organizations push for shorter hospital stays and more preventive care.

In New York, for instance, city officials contend that there are too many hospitals, many just blocks from each other. The ad- ministration of Mayor Rudolph W. Giuliani wants to close or shrink some of the hospitals in the city's vast public-health-care system.

Some experts also say that current programs overemphasize specialty training when primary care is the way of the future.

Though Medicare was created to provide care for the elderly, it also provides hospitals with about $150,000 each year for every new doctor they train. In addition, the program pays premiums to hospitals serving disproportionately large numbers of the poor and uninsured.

Under the House legislation, hospitals will lose $8.6 billion in subsidies for medical education and $7.1 billion for treating the indigent.

Republicans offer several reasons for the proposed changes in Medicare payments for the training of doctors. In a report on the Medicare bill this week, Republicans on the Senate Finance Committee said that Medicare was paying more than its share of hospital costs for such training.

House Republicans said it was necessary to cut back payments for foreign medical graduates, which in New York City hospitals make up half of the medical residents, as part of a comprehensive effort to control Medicare costs.

Hospitals across the country are scrambling to patch the holes these provisions will bore in their budgets. "The margins are vanishing," said Dr. Ralph Snyderman, dean of the medical school at Duke.

If there is less money to hire residents, he said, full-time faculty will have to spend more time treating patients and less time doing clinical research and training new doctors. The ability of the hospital to provide a wide range of charity care will be jeopardized, he said.

"The real danger is that the infrastructure of the nation's academic health system will fall apart," said Snyderman.

With more than 2 million uninsured people in New York City, the state ranks second in the nation in so-called disproportionate share payments designed to offset the expense of treating large numbers of poor patients. The House bill cuts those payments by 25 percent.

The state also ranks first in Medicare payments for doctor training, which the bill reduces in three ways.

It phases in a 27 percent cut in the indirect costs of training doctors, such as extra lab tests and the longer hours needed to make up for the slower pace of teaching.

"Personally, I am counting on a presidential veto," said Stanley Brezenoff, president of Maimonides Medical Center in Brooklyn, which faces slashed payments for about half of its 411 residents and interns.

New York City hospitals, like others across the country, are already struggling to keep up with discounts demanded by managed-care companies and are staggering from state cuts in their Medicaid reimbursements. Some local politicians and health officials warned that coming on top of those financial threats, the Medicare cuts would cause an economic and health-care crisis in the city.

They warned that with more that $12 billion in Medicare and Medicaid cuts to city institutions anticipated under the legislation over the next seven years, more than 100,000 jobs would be lost, hospitals would close in communities where there are no others, and services would be pared to such minimal levels that patient care would be imperiled.