PRODUCT-LINE EVALUATION OF GRADUATE MEDICAL-EDUCATION PROGRAM COSTS

This article reports the results of an innovative application of tradi tional multivariate approaches to estimating hospital costs in order t o support product-line evaluation of graduate medical education (GME) program costs among the clinical departments and teaching facilities o f a nationwide, federal multi-institutional system. Department-level d ata for 1988, 1989, and 1990 were used to estimate a multiple regressi on model of total costs per disposition for the specialties of medicin e, surgery, obstetrics/gynecology, orthopedics, psychiatry, and pediat rics. Systemwide and facility-specific GME program costs per dispositi on were estimated for each specialty on the basis of dependent variabl e scores predicted by the regression model. Measures of case-mix inten sity, facility bed size, department staff size, clinical specialty, GM E status, teaching intensity, operating efficiency, and regional varia tion each made statistically significant contributions to the explaine d variance in total costs per disposition, and yielded an adjusted R2 of .701. Estimates of total costs and GME costs per disposition reveal ed substantial variation among clinical specialties, both systemwide a nd within specific facilities. The results of these techniques, their usefulness for enhancing executive ability to evaluate costs of GME pr ograms as product lines, and their implications for public policy rega rding hospital payments are discussed.