Academic Health Focus
In 1981, the average medical school received less than 7 percent of its total funding from its affiliated teaching hospitals.1 This percentage has grown year over year and, in 2017, exceeded 18 percent.2 Why have medical schools become more dependent on funding from teaching hospitals? Because all other funding sources have flattened or declined, while maintaining competitive academic programs has only become more expensive. Research loses on average 40 cents to every dollar. At best, medical education (i.e., tuition and fees) breaks even once all overhead is considered. Faculty group practices were once a reliable source of cross-subsidization for medical schools (i.e., “dean’s tax”), but freestanding faculty group practices are generally no longer self-sufficient due to a steady decline in professional fee reimbursement.
Association of American Medical Colleges, AAMC Data Book: Revenues for the General Operational Programs of U.S. Medical Schools, May 1990.
Association of American Medical Colleges, AAMC Data Book: All U.S. Accredited Medical School Revenue by Type, $ in Millions, 2017.