The Funding of Graduate Medical Education in the American Healthcare System

Abstract

Hospitals that provide post-graduate medical education have a unique role in the American healthcare system. These hospitals provide a large portion of healthcare for populations that are poor and chronically ill. With few exceptions, these institutions are responsible for training all physicians who practice in the United States. Teaching hospitals receive funding for providing graduate medical education through the Medicare program, Medicaid program, Health and Human Services, the Veterans Administration, Department of Defense, and private funding from individual hospitals. Payment for training of postgraduate physicians consists of direct costs for maintaining residency training programs and indirect medical expenses related to the increased costs associated with having residency training programs in a hospital. Funding for individual residency training programs is determined by complex formulas which are reviewed.