I wasn't suggesting a solution. I was highlighting one of the current problems with residency funding. Hospitals need to be able to make money of residents, not lose money on residents.
If I were to suggest a solution, the first step would be allow all hospitals to bill for work done by residents. IF they can make money on residents the entire problem goes away.
If a resident fixes your broken arm with the same quality as regular doctor, I think the hospital should be charging the payer the same.
From the papers I have seen, unbilled procedures by residents is more than enough to cover their salary.
IF it doesnt get there, we could talk about contractual solutions, but the first step should always be figuring out the true value of their work.
PS, I don't pretend to understand the intricacies of the law you linked, but it does not seem to address the issue on first read. It seems that Medicare will pay an arbitrary premium set by Congress on healthcare services not performed by residents to compensate for the fact that neither Medicare nor private insurance pays for the healthcare services that are provided by residents.
You have misunderstood the problem and misinterpreted the papers you read. Hospitals bill for everything they do (although some bills are written off as bad debt or charity care). They don't fix broken arms for free. The bill might have an attending physician's name on it rather than the resident who actually performed the procedure but it still gets billed.
The problem is that employing a resident incurs a lot of overhead. Some of this is paying attendings for training and supervision. There's also a lot of other general overhead expense associated with having another clinician on staff. None of that overhead is directly billable to customers as a separate line item. So, who should pay?
What I said especially holds true if you are billing in the name of the attending. If you have residents doing real work and the attending checks it out, that shows up as $0 on the books for the resident, and potentially millions of billable services for the attending. When the hospital says, "we lose money on residents", of course they do! They way they bill ensures exactly that.
That's why I say that step 1 is determine and bill the actual value of resident work. Lots of papers claim teaching hospitals actually make money on residents before medical education payments (and that doesnt even include the unbilled work I mentioned earlier [1])
If after a true accounting of the value, it still comes up negative due to overhead, then bill the customer! they are the ones that should be paying overhead anyways. There are 101 ways to recoup overhead, especially capital investment.
You're just hand waving and haven't proposed any sort of viable specific solution. Customers aren't willing to pay higher bills for the sake of training residents. Those who have a choice will go to a cheaper, non-teaching hospital. Hence the free rider problem.
When the holiday rush comes around, does UPS pay to train new employees or do they just throw up their hands and say that it will now take a month to deliver a package? And how does UPS avoid its customers being not "willing to pay higher bills" for the sake of training new employees? And what stops Fedex from being a free rider that poaches the new UPS employees right after they're trained?
Your whole argument is just beating down criticism by taking the current broken incentives as if they're set in stone. Yes, we know the incentives of the current system are terrible. In fact that's exactly why the whole system needs to be overhauled with sweeping reforms, rather than waiting for it to get better on its own.
Why do you keep asking me for a solution, without agreeing with me on the problem at hand?
We dont even agree that residents drive up costs. I dont agree that is a given.
If we assume residents are a cost, the solution is still simple. you just attach the cost of training to the physicians salary. Then, whatever hospital they work at will have pay for the training.
Last, the residency program costs are tinny in comparison to overall physician costs. Back of the envelope math shows the 20 billion program is a few percent physician costs, which are themselves only a part of healthcare costs.
https://www.cms.gov/medicare/payment/prospective-payment-sys...
What solution are you suggesting here exactly? Who should pay for graduate medical education, and how will we incentivize or force them to do it?