[chimeracoder]

> Not if the government already pays for it. Why open up self-funded slots and show that the government doesn't need to pay for it? If you make a small profit, you are just putting the other pure profit slots at risk...

I somehow doubt Hospital A, which has zero residency slots and receives zero residency funding from Medicare, cares if Hospital B down the road somehow loses their subsidies.

There is no "pure profit slot". Residency programs do not make money for the hospital. If they did, hospitals that do not have residency programs would open self-funded residency programs, and/or hospitals that already do have residency programs would expand theirs.

[chuckkir]

It is possible that if the AMA or others is intentionally restricting the supply then any hospital that started its own residency could have trouble hiring regular doctors. I am not claiming this is the case, but it is one reason that hospitals might avoid something that the free market would indicate.

[phkahler]

Hospitals do not do their accounting in a normal way. When you or your insurance gets a bill, the doctors are often listed separately. In other words, patients pay for them directly for services, they are not paid as employees of the hospital. That means for residents, someone's got to pay for them. They are not seen as lower cost labor because doctors are not accounted for as high cost labor. I'm not sure how it's done, but it's not the same as interns in engineering.