WASHINGTON--To maintain its world leadership in clinical care, the nation
should levy a 1% tax on health care premiums to pay for clinical research,
Kenneth I. Shine, MD, president of the National Academy of Sciences' Institute
of Medicine (IOM), has proposed.
Traditionally, clinical research has received considerable support from
patient care revenues, particularly at academic medical centers, Dr. Shine
said. He placed the peak amount at $2.5 billion annually. Among other things,
these funds supported young clinical investigators, underwrote research
costs not covered by grants, and funded equipment and renovations not paid
for by the National Institutes of Health.
However, cost controls instituted by managed care organizations and
reductions in Medicare and Medicaid payments have reduced funds available
to subsidize clinical research, Dr. Shine said.
"It is important to develop income streams that will substitute
for these clinical revenues in an accountable manner," he said. "That
is why I propose an assessment on health-care premiums and payments and
even on money spent by corporations that are self-insured."
Young researchers who previously had been subsidized by clinical revenue
are now forced to fully earn their salaries by delivering patient care,
Dr. Shine said. As a result, "the time available to do research for
them is diminished."
He also noted that if researchers have an NIH grant, they must fully
pay for their salary from their grant. "I believe the effect of this
development is such that it will compromise the capacity to bring innovation
to health care at the bedside," he commented.
Dr. Shine outlined his tax proposal at a press conference during a two-day,
IOM-sponsored conference. He suggested the assessment be implemented over
four years, and estimated the levy would yield between $4 billion and $8
billion annually to support clinical research.
The proposed 1% assessment could be likened to the existing 10% tax
on airline tickets and the various road-fund taxes included in the price
of gasoline. "The commitment of money from health care premiums is
basically to improve the product that you deliver," he said, "just
as the airline tax and gasoline tax go to support infrastructure in their
The IOM president urged that funds from such a tax be used for clinical
research only, not for biomedical research in general. "I believe
that payers, patients, and managed care organization can understand the
expenditure of money when it goes for improvements in health care,"
he said. "It is more difficult for them to see that investment going
into fundamental science, which, in my opinion, is the responsibility of
Dr. Shine noted, however, that about one third of the research funding
provided by NIH goes to clinical investigators. By instituting a levy on
premiums, NIH could reduce its funding of clinical research. "If the
direct congressional appropriation to NIH were maintained, this new stream
of income would, in fact, increase the amount of money available for fundamental
science," he said.
A more detailed description of Dr. Shine's proposal and its rationale
appeared in the July 16 issue of JAMA (278:245-246, 1997).