The three Triangle teaching medical centers, WakeMed, Duke and UNC, will lose millions of dollars in federal money to train new doctors because of cuts in the U.S. Medicare program. Established by Congress in 1965, Medicare benefits not only Americans age 65 and older. It also pays the salaries of physician residents, medical students who complete their training at teaching hospitals, and it subsidizes indirect costs that teaching hospitals incur in preparing future generations of doctors.
Indirect costs account for the sicker and more uninsured patients that teaching hospitals attract.
The year after the Balanced Budget Act of 1997 took effect, hospitals watched Medicare funding for direct and indirect medical education drop. In 1999 and 2000, Congress passed legislation to slow the deepening cuts. But the number of physician residency slots at teaching hospitals remains frozen and reimbursement for indirect medical education costs, or IME, has dropped from 11 percent to 6.5 percent. A fiscal year at UNC runs from July 1 to June 30. UNC has more than 380 residency slots at four hospitals in Chapel Hill.