[nradov]

It's tough to get an accurate sense of the economics of teaching hospitals. Much of the analysis comes down to highly subjective management accounting decisions about how to allocate fixed costs to various cost centers. Residents (especially the junior ones) require a lot of supervision by attending physicians, and much of that work isn't directly billable. The fact that those hospitals aren't rushing to voluntarily take on more residents indicates that the programs are net losers without government subsidies.