Closing the gap. Funding clinical medical education in Minnesota

In recent years, decreasing funding for graduate medical education (GME) from private payers, combined with increasing competition between teaching and nonteaching hospitals for managed care contracts and cuts in federal aid to teaching hospitals, have led to a worsening financial crisis for the nation's teaching facilities. For more than a decade, Minnesota's teaching hospitals have been dealing with the same issues, and recent articles have discussed the impact that declining funding and a market increasingly dominated by managed care have had on graduate medical education. Although there is agreement that teaching hospitals have higher costs for patient care than nonteaching hospitals, relatively little research has been done to determine the magnitude of the costs of GME or to isolate their components. Using data from the Minnesota Department of Health's Medical Education and Research Costs (MERC) Fund, the author analyzes the costs to teaching facilities of providing clinical training to resident physicians and students and examines the sources of funding that are available to offset these costs.