> Are you sure it's not just a case of Hollywood style accounting?
Yes, for the reason I said:
> An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.
Even if you don't trust the accounting numbers, you have to trust the overall (lack of) incentive for hospitals to create self-funded programs.
I agree with this logic about "if residency programs predictably broke even" but I don't see any concrete support for that in the article. They don't have an accounting of revenue per doctor or at least the article has not shown one.
Saying the benefit is social benefit doesn't help here, obviously it is it's a hospital, there needs to be revenue numbers in the mix to talk about breaking even.
re-reading your comment "This is talking about the cost-benefit from a societal perspective, not from the accounting perspective of the hospital." I think perhaps you do not understand what residents do. Residents handle a portion of the patient workload. They provide direct economic benefit to the hospital by handling patient workload at a lower salary than more senior doctors. There is a hierarchical system by which work is reviewed by more senior doctors but this is used in all hospitals regardless of whether there are residents. The economic benefit to the hospital is that residents do the work for lower salary than doctors. Putting that into dollar terms is what this article has failed to do, likely because the data to do so is not there.
> I think perhaps you do not understand what residents do.
Given my background, I understand exactly what residents do.
My point still stands. Even if you don't trust the accounting numbers, you have to look at the end result.
Let's assume that residency programs are, at the margin, profitable for hospitals. Let's also assume that hospitals like profit.
- The statement "residency programs are profitable (at the margin) for the hospital" is logically equivalent to "increasing the number of residency slots (or programs) would be profitable for the hospital".
- If increasing the number of residency slots (or programs) would be profitable for the hospital, there would be more of them.
- However, there aren't - the number of self-funded residency programs has been (essentially) zero for decades.
Therefore, one of our two assumptions must be wrong. Either residency programs are not, at the margin, profitable hospitals, or hospitals just like turning down profit.
"residency programs are profitable (at the margin) for the hospital"
No, there are many options between 'profit' and 150k costs.
The question is can Medicare increase the number of residency's without increasing Medicare's costs. And because of the excessive number of specialists with higher associated costs the answer to that is clearly 'Yes'.
Thus, the cost of a residency slot is not inherently negative 150,000$/year. It's very possible for residency's to break even without hospitals to have any incentive to implement them, further that 150k/year provides profit even with the current mix.
> No, there are many options between 'profit' and 150k costs.
Why are you bringing $150,000 into this? That's the median debt load of a resident - it has nothing to do with what a hospital makes.
> The question is can Medicare increase the number of residency's without increasing Medicare's costs. And because of the excessive number of specialists with higher associated costs the answer to that is clearly 'Yes'.
I... don't even understand what point you're trying to make here. The point is that hospitals cannot generally provide self-funded residency programs, because they lose money on those programs.
Yeas, it's true that not all residency programs cost the same amount - some fields are more expensive than others. But it's not like we're trying to optimize for the total number of residents in the system at any time; the reason we have more expensive programs like neurology is because we need neurologists. Yeah, we could "save money" by training them in EM instead, but then that'd just mean an even greater shortage of neurologists (and even higher market wages for neurologists).
Because 150k/year is the current subsidy per resident. People may reasonably not want to spend more money on this, but it's hard to argue with spending money more efficiently.
You're demonstrating that hospitals do not consider residency programs to be worth funding, but you aren't helping us understand why, which is the far more interesting question.
There are multiple factors at work, only one of which is funding.
Residents are required to handle a minimum number of a large variety of cases by the time they graduate, in order to guarantee that they've seen a representative sample of cases in their field and have knowledge of all of them. E.g. a neurosurgery resident might need to do (completely fabricated numbers) 30 open vascular cases, 50 spine fusions, 40 tumors, etc. This is probably the primary limiting factor for specialist surgery residencies; these residents are profitable (they can handle the bulk of most simple cases fairly autonomously once they're a couple years into their training, and they stick around for 5-7 years), so many hospitals would like to hire more of them, but there are simply not enough patients with the necessary conditions for them to add more trainees.
For non-surgical residencies, the residencies are much shorter (so you have less time from highly-skilled residents), and the residents are less profitable, so funding is a significant limitation.
It's also important to note that residents are competing with mid-levels in the "less expensive practitioners" category, and mid-levels are a far better deal for the hospital in most specialties. They're somewhat more expensive in terms of raw salary, but they remain mid-levels, which means they have the time to develop near-perfect competence at the things they do handle, and they don't leave just when you've trained them up. A few good mid-levels make all the difference in keeping a department running smoothly.
> You're demonstrating that hospitals do not consider residency programs to be worth funding, but you aren't helping us understand why, which is the far more interesting question.
Because they... don't make money if they do?
I don't know how to make it any clearer. The costs of providing additional residency slots (paying resident salaries, paying additional attending salaries, paying taxes, paying insurance, etc.) don't bring in enough additional revenue or offset enough other costs to be worthwhile.
It's not particularly complicated math - it's the same arithmetic a McDonald's franchise owner has to do to decide whether to hire another person to flip patties, just with bigger numbers attached to it.
The way to make it clearer would be to discuss specifically why the services rendered by residents are not valuable enough to cover their costs.
A concrete example: I've had a resident do a checkup while I was in the hospital. If they hadn't done it, a fully trained doctor making a lot more per hour would have needed to. Did the hospital lose money on that checkup? If so, wouldn't they have lost more money if the fully trained doctor would have done it? If they make money on that sort of thing, what kinds of things are the opposite?
I don't know how it works, I've only ever been a patient. It seems like you might know, so I'm asking you how it works. Do you see how "they don't make money" is really not an answer?
Are residents that much less effective? Do they require so much supervision?
If residents are just cheaper doctors, then hospitals would optimize for a high resident:attending ratio.
So what is it? As far as I know, in hospitals residents are really cost effective doctors. Yes, sure, they don't do the big fancy operations, but they are very capable.
It might be that hospitals have other parameters to factor in. Maybe if there would be too many residents compared to regular doctors, people would flock to other hospitals. And so on.
Some hospitals especially teaching hospitals are non-profits. So I don't think the profit motive is sufficient justification. I think it is more likely a capacity problem.
Yes, for the reason I said:
> An easy way to reason about this is to remember that nothing's stopping hospitals from opening up residency slots that they self-fund. If residency programs predictably broke even, you'd expect them to do that. Except, almost no hospital does this, because the programs don't predictably break even - in fact, they pretty predictably lose money.
Even if you don't trust the accounting numbers, you have to trust the overall (lack of) incentive for hospitals to create self-funded programs.