Estimating the cost to departments of medicine of training residents and fellows: A collaborative analysis

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With almost 30% of the 106 000 U.S. resident and fellowship slots allocated to internal medicine and its subspecialties, 1 graduate medical education (GME) represents a major mission of departments of internal medicine. However, unlike patient care or, in university based departments, research, departments of internal medicine have no reliable external source of funding for their GME efforts. Moreover, regulatory bodies continue to emphasize the teaching of residents over the clinical service they provide, a trend that serves only to increase the educational costs to departments. Although teaching hospitals receive substantial payments that total over $6 billion annually from Medicare, 2 for residency and fellowship training in all specialties the departments and faculty members that provide the education receive little or no direct compensation through this mechanism. Medicare payments cover the salaries and fringe benefits that the physicians-in-training receive (direct medical education [DME]); these costs of compensating physicians-in-training are not part of the present analysis. Hospitals also receive Medicare payments for indirect medical education (IME). These payments are designed to cover additional costs that the hospital incurs in caring for Medicare patients because participation of physicians-in-training in patient care is thought to reduce the efficiency of the hospital when compared with care provided by attending physicians alone. To help defray the costs of training, departments of internal medicine must negotiate with their individual teaching hospitals for the fair market value of teaching provided by faculty members. In these negotiations, departments of internal medicine are at a severe disadvantage because there is little information available as to what it should cost them to educate their students. To help define these costs, the Association of Professors of Medicine gathered all available information from its member departments which had performed independent cost estimates. These approaches were presented on two occasions to groups of department chairs who provided advice on how to make these approaches more transparent.




Zeidel, M. L., Kroboth, F., McDermot, S., Mehalic, M., Clayton, C. P., Rich, E. C., & Kinsey, M. D. (2005). Estimating the cost to departments of medicine of training residents and fellows: A collaborative analysis. American Journal of Medicine. Elsevier Inc.

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