Surely a better means of addressing the situation can be found. However, all it would change is a last-minute addition that was requested by the House during the conference on the Balanced Budget Act. In our opinion, it was an objectionable provision when it was limited to New York, and conferees made it much worse. By no means, though, was it an integral part of the Budget Agreement. We have no objection to removing subsidies, but we very strongly object to new subsidies, especially when the taxpayers get nothing in return.
Teaching hospitals find it very lucrative to accept Federal funds for teaching residents.
They get the services of those residents for free, plus they get a great deal of additional funds that can be used to help with hospital operations. In most cases, these hospitals are in inner cities and serve a high proportion of indigent and elderly patients, and they are among the best hospitals in the country. The Federal Government, through Medicare and Medicaid, pays for most of the treatment costs of those patients. Now, though, the Medicare Part A trust fund is in trouble, and there is general agreement in the medical community that we have too many doctors in America. The Institute of Medicine, the Association of American Medical Colleges, and the Council on Graduate Medical Education have all said that we have too many doctors and too many residency programs.