DATE: Tuesday, February 25, 1997            TAG: 9702250011

SECTION: FRONT                   PAGE: A14  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   46 lines

DOCTOR GLUT MONEY FOR NOTHING

Paying farmers not to farm always seemed like a dubious proposition. Phasing out such programs is a triumph of market forces over bureaucratic regulation. But nothing has been learned. Now the Department of Health and Human Services proposes paying 41 New York hospitals $400 million not to train doctors.

It's generally agreed that the country trains too many doctors and too many of those as specialists. By some estimates, the system produces 25,000 residents a year when there's a need for only 17,000. But why not let the market sort that out?

A glut of doctors ought to drive down pay and discourage some from entering the profession. That hasn't always happened under fee-for-service medicine, but as managed care spreads it is more likely. Even if a quicker fix is needed, a reasonable start would be cutbacks in existing subsidies. At present, Medicare pays hospitals up to $100,000 a year for each resident trained, a total of $7 billion.

If hospitals are training too many doctors, stop rewarding them for it. But instead, HHS proposes to go from the sublime to the ridiculous - from incentives to train doctors to incentives not to train them.

Predictably, before the echoes of the announcement had died down, other states began trying to get in on the action. Hospital officials in Massachusetts, for instance, say they are already engaged in a five-year project to reduce the number of doctors trained. Why, they wonder, should New York get rewarded for it when they don't?

The subsidy's goal is to soften the effects of change, to wean teaching hospitals from reliance on medical students. But it's a questionable and indirect way to go about it. Expensive too, at a time when Medicare money isn't exactly in oversupply.

Switching to managed care, right-sizing the medical profession, shrinking the number of hospitals (which is as big a problems as the glut of doctors) won't be without pain. Some amelioration may be needed, but this program is ill-considered.

It plays favorites by being directed at one state. Claims of a political fix didn't take long to surface. It goes to the other extreme when simply reducing existing subsidies might have worked. And it fails to let the market operate, a major reason for health-industry bloat in the first place. In this case, the cure looks a lot worse than the disease.

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