The Balanced Budget Act of 1997 and the Financial Health of Teaching Hospitals

Robert L. Phillips; George E. Fryer; Frederick M. Chen; Sarah E. Morgan; Larry A. Green; Ernest Valente; Thomas J. Miyoshi

doi:10.1370/afm.17

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Full-Text Supplemental Appendix Link Not Live
Claire Zimmerman

Published on: 29 January 2004
The Balanced Budget Act and program closings?
Anthony J. Costa

Published on: 28 January 2004

Published on: (29 January 2004)
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Full-Text Supplemental Appendix Link Not Live
Claire Zimmerman, Seattle, Wash
The link to the supplemental appendix is not live in the full-text version of this article because the URL is not correct. The correct URL is http://www.annfammed.org/cgi/content/full/2/1/71/DC1
The appendix can be accessed, however, either by clicking on the [Supplemental data: Appendix] link in the electronic Table of Contents or by clicking on the "Supplemental data: Appendix" link in the navigation box acro...
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The link to the supplemental appendix is not live in the full-text version of this article because the URL is not correct. The correct URL is http://www.annfammed.org/cgi/content/full/2/1/71/DC1
The appendix can be accessed, however, either by clicking on the [Supplemental data: Appendix] link in the electronic Table of Contents or by clicking on the "Supplemental data: Appendix" link in the navigation box across from the title at the top of the page in the full-text version of the article.
We very much regret this error and apologize for the inconvenience.
Competing interests: None declared
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Competing Interests: None declared.
Published on: (28 January 2004)
Page navigation anchor for The Balanced Budget Act and program closings?
The Balanced Budget Act and program closings?
Anthony J. Costa, Orlando, FL USA
The paper by Phillips, et al., in this month’s Annals of Family Medicine, describes the effect of the Balanced Budget Act of 1997 on the financial status of teaching hospitals. They specifically compare this effect on family practice single-residency hospitals to the effect on larger hospitals with multiple residencies. At first glance the smaller hospitals seem to have fared better, with a 21% drop in their profit ma...
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The paper by Phillips, et al., in this month’s Annals of Family Medicine, describes the effect of the Balanced Budget Act of 1997 on the financial status of teaching hospitals. They specifically compare this effect on family practice single-residency hospitals to the effect on larger hospitals with multiple residencies. At first glance the smaller hospitals seem to have fared better, with a 21% drop in their profit margins compared to a 50% drop in the profit margins of their larger counterparts. This difference in the profit margins of the smaller hospitals, however, was enough to triple the number of such hospitals operating in the red.
More disturbing, perhaps, is the number of closings of family practice residency programs. Early last year Schneeweiss, et al., reported that the Balanced Budget Act had resulted in only a slight increase in closures, with 3 closures per year between 1988-1997 and 4.8 closures per year between 1998-1999. Subsequently Gonzalez, et al., have reported that 27 residency programs have closed (or announced closure) between July 1, 2000, and July 1, 2002. (2) The stated reasons for closure were largely financial, and the closures were not related to program quality.
With decreased revenues from Medicare and managed care and an increasing burden of care to the uninsured, many teaching hospitals can no longer afford to teach. Reinstating the former levels of Medicare funding to graduate medical education is only a temporary solution. An equitable and reliable all-payer system of funding graduate medical education must be found and implemented.
1. Schneeweis R, Rosenblatt RA, Dovey S, et al. The effects of the 1997 Balanced Budget Act on family practice residency training programs. Fam Med 2003; 35(2): 93-99. 2. Gonzalez EH, Phillips RL, Pugno PA. A study of closure of family practice residency programs. Fam Med 2003; 35(10): 706-710.
Anthony J. Costa, M.D. Florida State University College of Medicine
Competing interests: None declared
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Competing Interests: None declared.