The cost of providing graduate medical education to the approximately 100,000 medical residents in the United States is approximately $18 billion. The government, primarily through the Medicare program, funds almost two thirds of the cost. Unfortunately, the federal government lacks a coherent policy with respect to what objectives it wants to achieve for this expenditure. This article traces (a) the evolution of graduate medical education funding; (b) current proposals to reform the funding mechanism; (c) how the Medicare program currently funds graduate medical education; (d) how funds are allocated to specific institutions; and (e) specific policy objectives that academic medical centers should be held accountable for achieving in return for receiving public funds.
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