Medical School in The United States - Academic Health Centers

Academic Health Centers

Medical schools reside inside complex multi-purpose institutions known as academic health centers. Academic health centers aim to educate medical students and residents, provide top quality patient care, and perform cutting-edge research. Since medical students are educated inside academic health centers, it is impossible to separate the finances from other operations inside the center. Funding for medical students—and higher graduate medical education—comes from several sources above and beyond personal debt financing.

• DGME (Direct Graduate Medical Education- 2.2 billion in 2002) financing payments under the auspices of Medicare/Medicaid. This funding was altered by the Consolidated Omnibus Budget Reconciliation Act of 1986. Each hospital receives payment based on how many Full Time Equivalent Residents are being trained.
• IME (Indirect Medical Education - 6.2 billion in 2002) adjustment. This payment compensates teaching hospitals for their higher Medicare inpatient hospital operating costs due to a number of factors.
• Managed care and insurance organizations reimburse at a higher rate for teaching hospitals, explicitly acknowledging the higher costs of the academic health center.
• The vast majority of revenues come from third-party payers reimbursing for patient care, usually through the Faculty Service Plan.
• Incentive programs such as the MSTP (Medical Scientist Training Program), NHSC (National Health Service Corps), Armed Services Health Profession Scholarship and now the Income Based Repayment Plan.
• Many academic health centers in the U.S. are tied to undergraduate university systems while others solely focus on graduate medicine, training, research, and education.