The true cost of GME

Residency Program Insider, May 16, 2014

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Residents’ low-cost labor doesn’t offset the high costs of providing GME at academic medical centers, Atul Grover, MD, PhD, and his co-authors argue in a recent New England Journal of Medicine editorial. 

Grover, who is the chief public policy officer for the Association of American Medical Colleges, and his co-authors, Peter L. Slavin, MD, and Peters Willson, MPPM, write that estimates of the cost of GME often don’t take into account the higher costs associated with running academic medical centers. According to the authors, academic medical centers comprise 5% of hospitals but have historically provided 37% of charity care and managed 26% of Medicaid hospitalizations, usually at a loss.

Academic medical centers often provide facilities and training experiences that are expensive, but crucial to residents’ education and unavailable at other hospitals, they write. Clinical service lines such as obstetrics, geriatrics, and inpatient psychiatry, facilities such as trauma and burn centers, and opportunities for biomedical research are important for physician education but often absent or underutilized at non-teaching institutions, the authors write.

“Some economists have suggested that trainees are low-cost, skilled labor that ‘make money’ for [academic medical centers] despite their inability to bill directly for patient services,” they write. “However, we are aware of no empirical analyses that suggest that trainees increase clinical revenue sufficiently to offset the investment required to support training. In addition, the cost of training has increased substantially in recent years owing to a series of unfunded mandates, including more stringent educational requirements, decreased duty hours, and strict supervision requirements.”


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