Review of US medical school finances, 1997-1998

Based on data from the Annual Medical School Questionnaire of the Liaison Committee on Medical Education (LCME), to which 100% of schools responded, we found that revenue supporting programs and activities of the 125 accredited medical schools in the United States totaled $36997 million in 1997-1998. A large proportion of revenue (79%) was derived from 3 sources: practice plans ($12559 million; 33.9%), grants and contracts ($10916 million; 29.5%), and hospital support ($5741 million; 15.5%). An analysis of revenue trends revealed that medical schools, in aggregate, have continued to experience growth during the last 2 years. However, the aggregate numbers mask considerable variation among schools with regard to changes in financing. Between 1995-1996 and 1996-1997, 46 schools (37%) reported constant-dollar declines in the sum of practice plan and hospital revenue, and 50 schools (40%) reported a decline from 1996-1997 to 1997-1998. The financial data reviewed in this report demonstrate the continued dependence of medical schools on faculty-generated sources of revenue and confirm the perception that a growing number of medical schools are experiencing reductions in key sources of financial support. Current and projected reductions in teaching hospital revenue due to the implementation of the Balanced Budget Amendment are expected to erode further hospital support for medical school programs and activities.