Although there are many special problems of reimbursement for care in teaching hospitals, major policy concerns appear to derive from the widespread belief that costs of care are higher in teaching than in nonteaching hospitals. Three complementary concepts of inpatient costs that are pertinent to these concerns: (1) program costs--the costs incurred by a public program when it reimburses patients or providers for medical care received by beneficiaries; (2) charges and fees--the amounts providers bill for public programs; and (3) production costs--the costs of the resources used in producing patient care. To avoid bias in any of the analyses, it is necessary to include physician costs in inpatient care costs. Analysis of existing data sources could offer useful evidence about the sources and nature of these cost differences in teaching and nonteaching hospitals and better inform the policy debate. 71 pp. Ref.