Feds Will Pay N.Y. Not To Train Doctors Surplus Of Physicians Drives Up Health Costs, Economists Say

In an unconventional effort to control a surplus of doctors, the federal government will pay New York’s hospitals $400 million to train fewer doctors for the next six years, The New York Times reported.

The government’s offer to the state’s 41 teaching hospitals aims to stem the growing number of doctors in parts of the country, which health economists say drive up medical costs, and save money.

“It’s an amazing treatment of health care as a commodity - like grain or milk or meat,” said Dr. Alan Hillman, a professor of health policy at the University of Pennsylvania.

“I’ve never heard anything like this before. But I really can’t find any fault with it. Maybe this is one of the first rational collaborations between hospitals and the government.”

The plan was proposed by state hospitals and politicians and approved by the U.S. Department of Health and Human Services, the Times reported today.

New York trains 15 percent of the nation’s doctors, which makes it by far the top producer of physicians.

The government pays for the training through its Medicare program, paying up to $100,000 a year for each resident hospitals train.

The 41 hospitals who agreed to the voluntary plan have promised to reduce the number of residents-in-training by 20 percent to 25 percent over the next six years, cutting the number of state residents by 2,000.

In exchange, the government will pay participating hospitals as if those young doctors were still there, phasing out the payments over six years.