Graduate medical education costs in nonacademic health center teaching hospitals: evidence from Maryland

Emergency department visits: the cost of trauma centers

Crowded emergency departments (EDs) have become a serious problem in the current U.S. healthcare system. Patient wait times and periods of ED diversion have increased, raising concerns about the timeliness, efficiency, and quality of ED treatment. This study addresses the question of whether there are economies of scale (EOS) in ED care, and the extent to which such economies vary across different types of EDs. A hospital cost function approach is taken to evaluate average and marginal costs of EDs designated as trauma centers. Data comes from acute care hospitals in Texas for the period 1998-2004. Cost functions corresponding to four different levels of ED trauma care are estimated using a translog panel data model with hospital fixed effects. The marginal costs (in 2004 dollars) of each trauma center level are: $53 (Level I), $177 (Level II), $119 (Level III), and $258 (Level IV). Average cost per ED visit for trauma centers exceeds marginal cost at all Levels, indicating the presence of EOS. The results support a possible expansion of ED size policy in order to improve the cost efficiency of ED services.

Estimating the patient care costs of teaching in a teaching hospital

PURPOSE

Because leaders at medical schools and teaching hospitals need current data to estimate the clinical costs of graduate medical education, the authors developed a new methodology to estimate the hospital costs associated with the presence of teaching physicians for the year 2002.

METHOD

A hospital accounting system was used to determine the case mix-adjusted direct variable costs for 41,522 inpatient admissions associated with or without a teaching physician.

RESULTS

Prior to adjustment, teaching cases had greater median costs than non-teaching cases. After severity adjustment, teaching cases in aggregate were associated with an additional 4.4% of the total direct variable cost of inpatient admissions, or US 3.6 million dollars. The size of the teaching effect varied by service, ranging from -5.7% for medical services to 13 percent for behavioral services. The effect of teaching on cost centers such as laboratory, pharmacy, and radiology varied by specialty service. Teaching was associated with a negligible 0.7% relative difference in length of stay.

CONCLUSION

The incremental effects of teaching on hospital patient care costs are modest. These analyses can be repeated annually to detect changes in teaching costs and to target areas of excessive cost for interventions that improve efficiency. Our results and methods for identifying hospital costs associated with teaching services may prove useful in negotiations between academic health centers and affiliated teaching hospitals.

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).