The Council has begun a series of informal briefing memos on issues related to health-care cost containment.

Elliott Shaw, outlined The Councils views on financing graduate medical education (GME) in the first memo in the series.

"We want to negotiate GME, not eliminate GME," Shaw wrote.

Virtually all states support GME by building GME financing into negotiated rates for teaching hospitals, he said. New York, in contrast, funds GME by taxing the health-care coverage paid by the privately insured.

That temporary tax was created by the Health Care Reform Act of 1996 and is due to expire this year.

But letting that tax expire does not mean a dollar-for-dollar reduction in GME support, he noted. "Many teaching hospitals made up some of the difference by successfully negotiating better revenues in the marketplace," he said.

"The marketplace is the best arbitrator to balance the value of [GME] with the ability of the privately insured to pay it."