According to Norton, health care is a special product that should be guaranteed for everyone, and therefore cannot simply be tossed into a free market system.

"It's easy to say that in a competitive society, economic competition can drive health care, but health care is not a product like any other product that we buy like automobiles," Norton says. "The strive towards managed competition doesn't account for the fact that health care is a different type of product."

Pieper says he would attempt to solve the Medicare crisis by increasing the incentives of enrollees to go into managed care.

"If I could identify what I would see as the single largest financial issue around the Medicare program, it's the open-minded fee-for-service characteristic," says Pieper. "Enrollment in a managed care environment has been somewhat minimal, so encouraging them to go into an environment where there is a more long-term view of their health care and a more consistent level of health care to the individual would seem like a good idea and potentially a cost-reducer."

Pieper says that the Republican legislation is positive to the extent that it encourages increased managed care enrollment and broad-based solutions to the deficit problem.

"It's the part that is disproportionately focused on a small segment that is of great concern to us," he says.

Depth of Cuts Uncertain

Though most hospital officials are fairly sure that some form of Medicare reform will be passed this year, they are not sure how deep those cuts will be. President Clinton has promised to who the Republican legislation, and according to Robert Blendon, professor of health policy at the School of Public Health and the Kennedy School of Government, no one can be certain of what the ultimate compromise will be.

"I think the uncertainty of exactly the size of the cuts has [the hospitals] worried," says Blendon. "I'm sure they're worried financially. The problem is that you just don't know. We know there will be less, but whether or not it's dramatically less, we just don't know. I think they learned, from the Clinton's health care plan the problems of assuming."

However deep the cuts turn out to be, teaching hospitals will continue to worry about the long-term effects of Medicare reform on medical education in this country.

"The implications of teaching and research have a very long-run nature to them," Pieper says.