Study reveals impact of Medicare cuts on teaching hospitals

NEWS IN BRIEF — Posted March 15, 2004

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A new analysis of the Balanced Budget Act of 1997 shows that more than a third of teaching hospitals operated in the red after the implementation of lower Medicare reimbursements for graduate medical education.

According to the research done by the Robert Graham Center: Policy Studies in Family Practice and Primary Care and published in the January/February issue of Annals of Family Medicine, Medicare support for education fell $350 million from 1997 to 1999 while costs rose $675 million for Medicare patients.

The study also found that teaching hospitals' total operating margins fell from 5.2% to 2.5% between 1996 and 1999.

Hospitals with only one residency program, which was in family medicine, saw the sharpest decline in profitability during this period. Of these hospitals, the number that were losing money jumped from 12% in 1996 to 30% in 1999.

Note: This item originally appeared at

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