Managed Care and Medical Education

Abstract

After a quarter century of relative plenty, academic medical centers find themselves in a serious financial squeeze that is beginning to compromise their triple mission of teaching, research, and clinical care. This squeeze reflects competitive pressures to reduce costs in a managed-care environment, intensified by Medicare cuts mandated in the 1997 Balanced Budget Act.¹ Teaching hospitals are no longer able to bill at rates that reflect the extra costs of their academic role — traditionally representing a premium of about 30 percent.² Most have sought to make up in patient volume what they have lost in income margins. This survival . . .