A wave of anxiety is sweeping the nation's 125 medical schools. These schools and their affiliated teaching hospitals--the academic health centers where new doctors are minted and where cutting edge biomedical research and medicine is practiced--are being squeezed financially by cost-conscious health maintenance organizations. Managed care providers steer their members who need medical care to nonteaching hospitals where costs are lower or, when their members do see doctors at academic health centers, pay less than private insurers pay.
The ascendancy of managed care is upsetting a relationship that some call a key to the strength of American health care: the cross-subsidization of the teaching and research enterprises from patient care income. Most medical schools have depended on clinical income to support their teaching and research missions because, several administrators told The Scientist for this article, tuition, government research grants, and state funds do not cover the true costs of teaching...
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