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It is a billing problem. Simple as that. Residents provide a vast amount of care, both under the supervision of an attending physician, that currently goes unch

It is a billing problem. Simple as that. Residents provide a vast amount of care, both under the supervision of an attending physician, that currently goes uncharged. Federal residency payments to hospitals forbids charging for it, and insurance refuses to pay for it. It is enough to cover the salary and cost of the residents. You are right that the current state is a free-rider problem. Free rider problems have tons of solutions, in both through markets and public policy. A free rider problem doesn't mean we must throw up our hands and give up. Instead, it suggests the type of solutions which are applicable.

nradov 2y ago
That's not accurate and the problem is hardly simple. Medicare already reimburses teaching hospitals at higher rates. https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/indirect-medical-education-ime 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?
- s1artibartfast 2y ago
  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.
  - nradov 2y ago
    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?
    - s1artibartfast 2y ago
      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. https://pubmed.ncbi.nlm.nih.gov/21217491/ https://pubmed.ncbi.nlm.nih.gov/21217491/
      - nradov 2y ago
        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.
        mindslight 2y ago

nradov 2y ago

That's not accurate and the problem is hardly simple. Medicare already reimburses teaching hospitals at higher rates. https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/indirect-medical-education-ime 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?

s1artibartfast 2y ago
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.
- nradov 2y ago
  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?
  - s1artibartfast 2y ago
    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. https://pubmed.ncbi.nlm.nih.gov/21217491/ https://pubmed.ncbi.nlm.nih.gov/21217491/
    - nradov 2y ago
      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.
      - mindslight 2y ago