This Article  • Full text  • PDF  • Send to a friend  • Save in My Folder  • Save to citation manager  • Permissions  Citing Articles  • Citation map  • Citing articles on HighWire  • Citing articles on Web of Science (42)  • Contact me when this article is cited  Related Content  • Similar articles in JAMA  Topic Collections  • Medical Practice  • Academic Medical Centers  • Medical Education  • Alert me on articles by topic  Social Bookmarking   What's this?

Implications for Academic Missions in a Competitive Market

Robert Mechanic, MBA; Kevin Coleman; Allen Dobson, PhD

JAMA. 1998;280:1015-1019.

Context.— As the managed care environment demands lower prices and a greater focus on primary care, the high cost of teaching hospitals may adversely affect their ability to carry out academic missions.

Objective.— To develop a national estimate of total inpatient hospital costs related to graduate medical education (GME).

Design.— Using Medicare cost report data for fiscal year 1993, we developed a series of regression models to analyze the relationship between inpatient hospital costs per case and explanatory variables, such as case mix, wage levels, local market characteristics, and teaching intensity (the ratio of interns and residents to beds).

Setting and Participants.— A total of 4764 nonfederal, general acute care hospitals, including 1014 teaching hospitals.

Major Outcome Measures.— Actual direct GME hospital costs and estimated indirect GME-related hospital costs based on the statistical relationship between teaching intensity and inpatient costs per case.

Results.— In 1993, academic medical center (AMC) costs per case were 82.9% higher than those for urban nonteaching hospitals (actual cost per case, $9901 vs $5412, respectively). Non-AMC teaching hospital costs per case were 22.5% higher than those for nonteaching hospitals (actual cost per differences in case, $6630 vs $5412, respectively). After adjustment for case mix, wage levels, and direct GME costs, AMCs were 44% more expensive and other teaching hospitals were 14% more costly than nonteaching hospitals. The majority of this difference is explained by teaching intensity. Total estimated US direct and indirect GME-related costs were between $18.1 billion and $22.8 billion in 1997. These estimates include some indirect costs, not directly educational in nature, related to clinical research activities and specialized service capacity.

Conclusions.— The cost of teaching hospitals relative to their nonteaching counterparts justifies concern about the potential financial impact of competitive markets on academic missions. The 1997 GME-related cost estimates provide a starting point as public funding mechanisms for academic missions are debated. The efficiency of residency programs, their consistency with national health workforce needs, financial benefits provided to teaching hospitals, and ability of AMCs to maintain higher payment rates are also important considerations in determining future levels of public financial support.

From The Lewin Group, Fairfax, Va. Mr Mechanic is now with the Massachusetts Hospital Association, Burlington.

CiteULike    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter     What's this?

THIS ARTICLE HAS BEEN CITED BY OTHER ARTICLES

Measuring Efficiency: The Association Of Hospital Costs And Quality Of Care
Jha et al.
Health Aff (Millwood) 2009;28:897-906.
ABSTRACT | FULL TEXT  

Hospital Characteristics Associated with Success in a Pay-for-Performance Program in Orthopaedic Surgery
Bhattacharyya et al.
JBJS 2008;90:1240-1243.
ABSTRACT | FULL TEXT  

Easing the Strain on a Pediatric Tertiary Care Center: Use of a Redistribution System
Freedman and Thakkar
Arch Pediatr Adolesc Med 2007;161:870-876.
ABSTRACT | FULL TEXT  

Resident Teaching Versus the Operating Room Schedule: An Independent Observer-Based Study of 1558 Cases
Davis et al.
Anesth. Analg. 2006;103:932-937.
ABSTRACT | FULL TEXT  

The Flexner Report and the Standardization of American Medical Education
Beck
JAMA 2004;291:2139-2140.
FULL TEXT  

The Economic Burden of Hospitalizations Associated With Child Abuse and Neglect
Rovi et al.
AJPH 2004;94:586-590.
ABSTRACT | FULL TEXT  

Estimating The Mission-Related Costs Of Teaching Hospitals
Koenig et al.
Health Aff (Millwood) 2003;22:112-122.
ABSTRACT | FULL TEXT  

What Will Become Of The Medical Mecca? Health Care Spending In Massachusetts
Mechanic
Health Aff (Millwood) 2003;22:130-141.
ABSTRACT | FULL TEXT  

Financing Graduate Medical Education: Sorting Out the Confusion
Covey and Friedlaender
JBJS 2003;85:1594-1604.
FULL TEXT  

Use of a Time-Flow Study to Improve Patient Waiting Times at an Inner-city Academic Pediatric Practice
Racine and Davidson
Arch Pediatr Adolesc Med 2002;156:1203-1209.
ABSTRACT | FULL TEXT  

Inpatient costs, length of stay, and mortality for cerebrovascular events in community hospitals
Reed et al.
Neurology 2001;57:305-314.
ABSTRACT | FULL TEXT  

The Impact of Practice Setting on Physician Perceptions of the Quality of Practice and Patient Care in the Managed Care Era
Chehab et al.
Arch Intern Med 2001;161:202-211.
ABSTRACT | FULL TEXT  

Relationship of Hospital Teaching Status With Quality of Care and Mortality for Medicare Patients With Acute MI
Allison et al.
JAMA 2000;284:1256-1262.
ABSTRACT | FULL TEXT  

Graduate Medical Education Costs in Nonacademic Health Center Teaching Hospitals: Evidence from Maryland
Duffy et al.
Med Care Res Rev 2000;57:3-23.
ABSTRACT  

Whatever Happened to the Faculty on the Way to the Agora?
Eisenberg
Arch Intern Med 1999;159:2251-2256.
FULL TEXT  

Academic Health Centers and the Changing Health Care Market
Freburger and Hurley
Med Care Res Rev 1999;56:277-306.
ABSTRACT  

Teaching Hospitals Incur Higher Costs of Patient Care
JWatch Emergency Med. 1998;1998:24-24.
FULL TEXT