The demand for residents

The incentive effects of the Medicare indirect medical education policy

Medicare provided teaching hospitals with US$ 5.9 billion in supplemental graduate medical education (GME) payments in 1998. These payments distort input and output prices and provide teaching hospitals with incentives to hire residents, close beds, and admit more Medicare patients. The structure of the GME payment policy creates substantial variation in input and output prices between teaching hospitals. We examine the extent to which hospitals responded to these financial incentives using a panel data set of 3,900 hospitals, including over 900 teaching hospitals. We find that teaching hospitals did hire residents and close beds in response to the Medicare policy, but did not increase Medicare admissions or alter their use of registered nurses (RNs).

Comparing teaching and non-teaching hospitals: a frontier approach (teaching vs. non-teaching hospitals)

This paper compares teaching and non-teaching hospitals in terms of their provision of patient services. We proceed by comparing the frontiers of the teaching and non-teaching hospitals using a data envelopment (DEA) type approach, which we apply to a sample of 236 teaching hospitals and 556 non-teaching hospitals operating in the US in 1994. Our results suggest that only about 10% of the teaching hospitals can effectively "compete" with non-teaching hospitals based on the provision of patient services.

Medical staff specialty mix and hospital production

This paper analyzes the role of medical staff characteristics in determining different dimensions of hospital output. Using a set of flexible functional form production functions, and adjusting for hospital case mix, we examine the output contribution of physicians and other inputs, and the influence that physicians in different specialties have on the productivity of other physicians, as well as on other labor and capital. We also examine the input substitution possibilities available to hospitals, and where possible, we compare our estimates to those obtained by other researchers. We find that physicians have numerous significant effects of production and conclude that physicians are an important input that should not be ignored in empirical cost and production function studies for hospitals.