ABSTRACT
Beginning in the middle and late 1970s and accelerating through the 1980s, the medical care service industry in the United States has undergone a dramatic transformation. The major impetus for changes in the medical care service industry has been a consistent increase in health care expenditures. According to the Commonwealth Fund analysis, approximately $316 per discharge in teaching hospitals is attributable to the direct cost of graduate medical education—that is, the stipends of residents, teaching costs, and overhead associated with teaching. In the hospital industry, long-standing cross-subsidies that have helped pay for the care of the indigent and the un- or underinsured, the education of physicians in training, and research and development are under severe pressure. Certain hospitals have traditionally had as part of their mission the support of undergraduate and graduate medical education and research, development, and innovation in medicine. Industry-supported research, although growing, is small and highly targeted toward drug testing and evaluation of new techniques and devices.
