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Service Provision Transition Costs

Jeffrey J. Stoddard, MD; David A. Kindig, MD, PhD; Donald Libby, PhD

JAMA. 1994;272(1):53-58.

Abstract
Objective.
—To analyze the potential strategies and costs of house staff substitution under a reformed system of graduate medical education.

Design.
—An economic model using two scenarios for substitution of house staff (residents and fellows): (1) a lower-cost model under which nonphysician providers assume many house staff responsibilities, but additional aspects of their workload are taken over by staff physicians, nurses, and ancillary personnel; and (2) a higher-cost traditional model that relies more heavily on staff physicians to replace house officers.

Setting.
—US teaching hospitals.

Main Outcome Measures.
—Projected net substitution costs of house staff on a per full-time equivalent basis and aggregate national cost estimates of substitution.

Results.
—Net annual house staff substitution costs were estimated to be $58000 and $77000 per replaced full-time equivalent house officer, respectively, under the two scenarios. Assuming elimination of approximately 23200 house staff under a reformed system, total (net) substitution costs to teaching hospitals were estimated at approximately $1.4 billion to $1.8 billion nationally on an annual basis.

Conclusions.
—Graduate medical education reform, while likely to result in substantial long-term cost savings, will necessitate transitions in service provision that are likely to generate some new costs in the short term.

(JAMA. 1994;272:53-58)

Author Affiliations
From the Departments of Pediatrics (Dr Stoddard) and Preventive Medicine (Dr Libby) and Health Policy Program (Dr Kindig), University of Wisconsin-Madison Medical School, and Meriter Hospital, Madison (Dr Stoddard).

Footnotes
Reprint requests to Health Policy Program, University of Wisconsin-Madison Medical School, Second Floor, Bradley Memorial, 1300 University Ave, Madison, WI 53706-1532 (Dr Kindig).

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